Startup Travel Agency

jamiewduffy

Hi all,

I am looking to set up my own business and after much thought I have decided to venture into travel. I am passionate about travelling and I have a great interest in it. I enjoy booking holidays for both myself (who doesn't) but I also get enjoyment from booking for others (friends and family).

Upon my limited research I have done so far I have noticed travel agents add on average 10% of what it would cost if people were to book their holiday online themselves. I would like to offer a cheaper alternative, possibly along with other services related to travel at no extra cost. When researching at first I found out one needs a licence to operate. This is the main area I need help with.

On the Irish Aviation Regulation website it states a Travel Agent Licence for new applicants fee is €600.00 but along with the payment of the fee it also says your application should include;
i. A Bank Bond
ii. An Insurance Bond

I am not entirely sure as to what either of those are or even how i would go about getting one and the cost involved in obtaining both. Now I do have some sort of understanding as to what a bond is, so I am not completely perplexed by the bonds required. I am looking for a detailed and assured understanding of both.

Also anybody who works in the travel industry (preferably Ireland) who can give me some information would be nice, especially anyone who runs such a company from home or as a sole trader.

Your help and information is much appreciated, I would like to thank all in advance for your time and help.

Thank you.

braddun

travel agencys are online ,its a bad business to get into,you will not make it,

no commission from airlines,most people book themselves,


you will probably have to have 100,000 bond

Meathlass

Concur with braddun.

Also what segment of the market are you targeting? Who do you know who books holidays through a travel agent anymore and why would they change to book with you? Unless you have large amounts of capital you won't make it.

Unless you are specialising in a niche high-end market that people won't buy off the shelf you don't have a hope.

jimmii

I think we these very developed markets you can only hope to make any head way if you go super niche. You could focus on something like catering for poker players every month there are 200-300 players travelling internationally to play tournaments (mainly around Europe with the EPT) and they want life to be as easy as possible they want a place to book flights, transfer, hotel etc and at the moment there isn't a real market leader doing that you also get a lot of people looking to take poker holidays and normally you have to book independently so often aren't getting the benefit of being a player too. If you gave the right people a couple of freebies you could get a lot of interest. If you have a look at All American Dave he has a catering business but a large part of that is serving healthy food to players during tournaments so they don't have to just eat the burger and chips type offerings that Casinos offer. This is the only company I can see that are targeting the market at the moment from what I can tell. The other benefit of a market like that is with hotel/casinos you will be able to get massively reduced hotel rates as you are bringing them casino customers instead of just hotel customers and thats where the money is for them.

RUDOLF289

jamiewduffy wrote: »

Hi all,

I am looking to set up my own business and after much thought I have decided to venture into travel. I am passionate about travelling and I have a great interest in it. I enjoy booking holidays for both myself (who doesn't) but I also get enjoyment from booking for others (friends and family).

Upon my limited research I have done so far I have noticed travel agents add on average 10% of what it would cost if people were to book their holiday online themselves. I would like to offer a cheaper alternative, possibly along with other services related to travel at no extra cost. When researching at first I found out one needs a licence to operate. This is the main area I need help with.

On the Irish Aviation Regulation website it states a Travel Agent Licence for new applicants fee is €600.00 but along with the payment of the fee it also says your application should include;
i. A Bank Bond
ii. An Insurance Bond

I am not entirely sure as to what either of those are or even how i would go about getting one and the cost involved in obtaining both. Now I do have some sort of understanding as to what a bond is, so I am not completely perplexed by the bonds required. I am looking for a detailed and assured understanding of both.

Also anybody who works in the travel industry (preferably Ireland) who can give me some information would be nice, especially anyone who runs such a company from home or as a sole trader.

Your help and information is much appreciated, I would like to thank all in advance for your time and help.

Thank you.

Good morning Jamiewduffy,

I gather from your post that this is a new venture and that you aim to get into the travel market without any previous experience.

as you already have found out, you need a bank bond and an insurance bond. Also, the Commission for Aviation Regulation website states ; In general terms, the two requirements that must be satisfied in order to obtain a licence relate to the financial standing of the applicant, as well as fitness and suitability to carry out either of the relevant activities.

Without any previous experience and without any training / IATA qualification, I just wonder how you will meet the standard imposed by the CAR in terms of suitability.

I am sure you have found this link, but just in case, have a look at this document;

http://www.aviationreg.ie/_fileupload/image/tt_licence_application_guidelines_22_jan_2009.pdf

One item from the a.m. document ;

10.1 New Applications by Limited Companies – Travel Agent
Share Capital

For new Travel Agent applications the Commission considers that a
reasonable threshold for most start up situations would be fully paid up
Share Capital which would represent at least 5% of total projected
licensable turnover, subject to a minimum of €25,000. This approach is
based on known experience of first-time licensees who tend to incur losses in
the first year of trading and perhaps in the subsequent year. However, the Commission would emphasise that these thresholds are guideline levels of
capital investment and that the Commission could well require higher levels
of investment if not satisfied that sufficient funds would be available for
working capital purposes. In any case, the capital base approved by the
Commission as a condition for grant of a licence must be adequate to cover
possible losses relating to start up, working capital and fixed asset
requirements.
Applicants should note that, having reviewed the application and/or the
results of the first year of trading, the Commission reserves the right to
request an increase in the minimum amount of paid up share capital.

also

10.3 New application by Sole Traders/ Partnerships

Assets
In the case of a sole trader or a partnership Applicants should note that
Regulations made under the 1982 Act2
require Audited Financial Statements
to be submitted. Therefore, if Sole Traders/Partnerships require a first-time
licence or a licence renewal, the Commission will require them to request an
Auditor to audit a Statement of Affairs or Balance Sheet, for all assets and
liabilities, not just the travel business. Sole Traders and Partnerships will be
required to display the same level of investment in their undertaking as
limited companies.
In addition, a Cash Flow Statement must also be prepared in respect of all
activities of the Sole Trader/Partnership not just the travel business.

So apart from the bonds, you also need to meet a minimum fully paid up share capital. And you need to submit a business plan, complete with projections of turnover for the 1st year's trading. Note the item highlighted in BOLD concerning the experience they have that travel agents in their first year of trading incurr losses.


Evidence of Experience and Competence
Before granting a licence, the Commission will need to be satisfied that an
applicant will have persons engaged by or available to it, with the requisite
level of managerial experience and competence as well as persons who are
experienced and competent in the normal procedures of the travel trade.
Competence includes the legal entitlement to work in Ireland. Applicants
should note that non-EU nationals do not generally have the right to work in
Ireland. New applicants should furnish a full curriculum vitae in respect of each of the directors and staff, accompanied, in the case of a person with travel trade experience, by a reference or report from that person's present or most recent employer in the travel trade.


I think this requirement is likely to scuttle any chances of obtaining a license, unless you have worked in a travel agency before. Your post suggests you have not ?

Apart from the fact that travel is a highly competitive area, it also requires a significant investment in terms of systems. I don't claim to be an expert, but having worked as an IATA agent on the freight side, the systems involved are often complicated and you need significant financial resources for this aspect too.

All in all, whilst admiring your drive to start up a new venture, looking in from a long distance away, I would be very carefull and understand clearly all the requirements to operate as a travel agent.

Hope this helps you in making sure you are coming to the right decissions.

Cheers,
Rudolf289

Buttercake

I have noticed travel agents add on average 10% of what it would cost if people were to book their holiday online themselves. I would like to offer a cheaper alternative

I have noticed ANY BUSINESS IN THE WORLD add on average 10% of what it would cost if people were to USE THIS BUSINESS. I would like to offer a CHEAPER ALTERNATIVE

This brain fart has been lingering since time began and is a terrible way to get into business. Undercut everyone else, do it for cheaper, no experience. Its been done dozens of times in the travel(and other) industries with spectacular failures. XL Holidays, Thomson Holidays etc

What you should do is get a job with Trailfinders or an agency and see what really goes on, the commissions to be made, staff costs, advertising, legal and how it all works

OR go indie and start a Travel blog and build a community. Talk about your experiences, destinations etc and build it up

Start selling advertising space on your site to travel agents. Sign up to tradedoubler, adSense or an affiliate scheme.

Try one special offer with a hotel and if it takes off, start thinking create more offers and then think about turning it into a fully fledged website

barman linen

Agree with most of the comments above....travel is an expensive and highly competitive business.

Try this...Travel Counsellors is a collective of individual travel counsellors that pool overhead and resource and build up their own individual businesses

https://www.youtube.com/watch?v=9gh8GAjlQ_U

jimmii

These threads drive me crazy so frustrating someone comes along posts a question then doesn't bother coming back even just to say thanks for the comments etc.

Bandara

jimmii wrote: »

These threads drive me crazy so frustrating someone comes along posts a question then doesn't bother coming back even just to say thanks for the comments etc.

Yep, that's the reason I didn't reply to it, has time waster fantasist screaming all over it

They will now reply with some nonsense saying they were too busy canvassing Richard Branson etc etc etc

Atomico

jimmii wrote: »

These threads drive me crazy so frustrating someone comes along posts a question then doesn't bother coming back even just to say thanks for the comments etc.

Guess he did thank you all in advance

Gloomtastic!

https://www.boards.ie/discussion/comment/121009548#Comment_121009548

Are you the OP? If not, this is what we call a zombie thread and needs to be closed. If yes, please pm me.