Beginner’s Guide on Starting a Travel Agency in the United Kingdom
Starting a travel agency has lots of perks. For one, setting up this business is very simple; you can even do it from the comforts of your home. Additionally, it’s very flexible as you yourself can decide how much working time you’ll take. More importantly, you don’t even need a formal education to start this kind of business as long as you have a strong strategy and commitment to learn and grow as an entrepreneur.
So, what is the process of starting a successful travel agency in the United Kingdom? You’ll learn that and much more with our beginner’s guide on starting a travel agency. Here, we outlined the basic details you need to know about running the business, the industry stats and practices, and the steps to plan and register the company. In this guide to company registration in United Kingdom, 3E Accounting shows how you can set up a travel agency as global travel restarts.
What is a Travel Agency?
A travel agency manages travels and tours by arranging transportation, itinerary, and accommodation. It has a wide knowledge of travel destinations, hotels, modes of travel, destination climate, cultures, food, and other tourist-related services. An agent may get in a contract with other establishments to receive a fee or commission for representing their products or services in travel packages.
Travel agencies play a key role in local tourism. They organise attractions, entertainment, amenities, and supplementary services into packages that eventually bring in people to that destination. Moreover, they make arrangements for travels more convenient, and the experience more worthwhile. Travellers often find it more cost-saving to avail of travel agency packages than doing the arrangements themselves.
Types of Travel Agencies
Travel agencies can either be a retailer or wholesaler. A retail travel agency offers tourist products from their suppliers to customers at a commission or mark-up. Once the customer buys a travel package, the retail travel agent books accommodations, travel tickets, and other amenities. They also offer consultations at a fee, advising travellers on destination and booking tips.
On the other hand, a wholesale travel agency specializes in organizing tour packages. These packages are the products that the retail agent markets. The wholesale agent contracts and buys travel products in bulk and plan them into tour packages. These tour packages usually include airline tickets, hotel accommodations, and local transportation means. Sometimes wholesale travel agents buy these travel products to resell to other travel agencies.
Industry Trends During the Pandemic
Although the pandemic caused a standstill for the travel and tourism industry, the global revenue still totalled USD400 billion in 2020. Furthermore, with the worldwide vaccination actions and continued precautions, the industry is expected to bounce back once again. And once this happens, you’ll want to be prepared to cater to the travellers fulfilling their travel bucket lists once and for all.
Steps for Starting a Travel Agency in the United Kingdom
Find a Niche
When starting a travel agency company, you must find a niche that attracts a particular market. For example, you may be interested in snow sports or beach getaways, so you can set up your travel agency under this niche. Picking out a specialization gives you an advantage, as the people looking for a particular travel interest will choose to pick an agency that accommodates their needs. A
Build a Business Plan
Next, you have to plan your business and operations. This plan will give you a guide on what you need to do to achieve your goals. Moreover, you can use a formal business when seeking investments or loans. You can include in this plan your goals and principles, the business size and capacity, policies, and the types of products. Another advantage of laying down the business details is that at this stage, you can already strategize what you’ll do upon starting operations.
Choose a Business Model
After writing a brilliant business plan, you should consider your business model. The UK has several different types of travel agency structures, according to how they operate and the industry they focus on. You can set up an agency as leisure or business and online or call centre based. Travel agencies can also be independent, multiples, or maniples.
Finding the right partner for your venture is critical. These partners include the product suppliers, the hotels, the airline, local restaurants, or resorts. Choosing the partners whose goals are aligned with yours. If they sell you their accommodations they should have the capacity to provide for it when eventually you sell tour packages.
Design Your Brand
Finally, create a brand that sets you apart from other travel agencies. The travel agency business has many competitions, so it is crucial that the market remembers you when they’re looking for travel packages. Design and market your brand strategically. Do you want to offer a historical or local experience that’s unique and authentic? Make snappy catchphrases, slogans, ads, digital campaign materials, and travel packages to embody your travel agency brand.
Start and Legalize Your Travel Agency
Start-up costs can be relatively low for a travel agency business. However, you still need sufficient funds to acquire equipment and prepare for other business affairs. If you think you need to borrow funds to start your business, business solution firms like 3E Accounting can help you figure out how much start-up capital you need. Professionals can also offer tips and assistance so you can successfully seek out investors and lenders.
To legalize your business, you need to register your company in the Company House. Upon business registration you have to choose a business structure for which you set up your business. In the UK, you can set your business as a limited company. This structure protects its owners, while not being overly complicated in its governance.
Moreover, you’ll also need to register your business name, by filing a DBA (doing business as). You have to ensure that you follow the guidelines in picking a company name to avoid issues and delays in the company registration. It must be unique, and not used by any other company. You must not use offensive language and regulated words that require prior authoritative approval before use.
You can register your company by yourself by going online and creating a new government gateway user ID. The process costs £12, which you can pay via debit, credit card, or PayPal. Or you may also acquire company incorporation services in United Kingdom if you’re having issues with your registration.
Licenses and Permits in Starting a Travel Agency in the UK
The United Kingdom Civil Aviation Authority (CAA) regulates the operations of travel organizers and agencies. The regulations in running a travel agency include providing a bond for your clients in the instance when the business fails. You can create this bond in an arrangement with a bank or insurance company.
Moreover, associating with recognized trade organizations will give your business credibility, so doing this will give you an extra boost. If you are issuing airline travel tickets, you will need to acquire a license from the Air Travel Organisers’ Licensing (ATOL). Without this, you will only be allowed to provide customers with accommodations and ground transportation. Furthermore, if your packages include non-flight travel arrangements like a coach, rail, and cruise, you need to become a member of the Association of British Travel Agents (ABTA). Membership to ABTA provides bonding and insurance protection for your business and customers.
Corporate Service Provider in the United Kingdom
If you need more information on how to set up a travel agency business in the UK, get in touch with 3E Accounting United Kingdom. We are a United Kingdom corporate service provider offering innovative business solutions for all your business needs. As company formation and compliance experts, we will ensure that your business starts on the right note.
Contact 3E Accounting today and speak to our team of professionals on customizing a business solution that works best for you!