Start a Travel Agency Business in Orange County

There used to be a lot of travel agents back in the 80s.  But this business went away as more and more people got on to the internet.  The travel websites started to offer so many search options that most travelers figured that they could get what they wanted by searching on-line.  You can search by lowest fair or shortest trip …  Airlines stopped paying big commissions for selling airline tickets.

But there are still some companies that pay in the range of 10-20%.  You just have to find a travel product that’s not a commodity–like an airline seat.  You can sell these commodity type travel products–airline tickets, car rental, and hotel rooms—for a little extra money as a convenience to your clients.  The tree most successful ways travel agents are making money are selling, resort vacations, cruise vacations, booking interest group tours, and selling travel insurance.  They can still make a bit off of airline tickets and car rentals.

It helps if you like to talk to people, and you love to travel.  You need to be able to get people excited about a travel experience.  If you have made the trip yourself, you can give people great advice.  (Just because people listen to your travel stories, that doesn’t mean you have what it takes.  Maybe people just can’t say, “enough about your stupid vacation already.”  I’d like to say you know who you are—but you really don’t.)  Another reason to become a travel agent is that they are offered big discounts on travel.  Cruise lines and resorts want you to visit so you can recommend their services clients.  So even if the business does not work out there are some benefits.  And a lot of people seem to become travel agents just for the discounts.

Licenses and Certification

From what we have read, you don’t need a state license to sell travel services.  But there are private organizations you may want to get certified by.  There are other benefits to certification in addition to the training, and seeming more credible to your potential clients.  You need this certification for the travel companies to take you seriously and get the inside track (including discounts and free trips) on deals.

  • http://www.nacta.com/index.aspx National Association of Commissioned Travel Agencies.  They provide information/access to a lot of vacation packages and they have a lot of training available.  They also have a network of agents you can use to answer your questions.

Insurance

Your home-owners insurance will probably not cover you if you make a mistake.  It’s easy to put in the wrong date.  Also, people want the trip that they imagined when you sold it to them.  Most of the liability is on the travel provider—airline cruise ship or resort.  But jut to be sure you may want to buy Travel Agent’s Errors & Omissions + general liability insurance.  We found one agency that specializes in this type of insurance for around $300/yearhttp://www.berkely.com/sites/berkely/risk_management/Pages/coverage.aspx  You definitely want to buy this type of insurance if you sign up for a cheep internet host agency.  We don’t know much about this.  This is not a recommendation for Berkely Insurance; we just wanted to give you an idea of the costs involved.  Your Host Agency should also have coverage available.

Selling Cruise Ship trips and resort visits

Cruise Ships pay commissions to fill up their ships.  There is a certification program for this which involves going on cruise ships http://www.cruising.org/travelagents and class training.  (Remember that all of this is tax deductable if you are in business.)  The cost of membership is $99/year, and includes a lot of ways to save money.  Some of you might just want to become a cruise agent just for the savings on tickets for your friends and family.  Your host agency or company you work with (see below) must have CLIA affiliation.  CLIA also gives you access to a lot of packages to sell and sales and marketing training.

Group/themed tours

Your group can be based on immigrants who want to take trips back home, student groups, singles groups, or senior groups.  Tour operators will pay commissions if you can bring them business.  Another possibility is that you plan the tour, and buy the accommodations and air fair at discounted prices.  Of course, you are also taking a risk that you will be stuck with extra space or have end up selling at a loss.  But if you can get find the customers, this might be the most profitable way to go.

Selling Travel Insurance

One service that your clients will want is travel insurance.  It’s an easy sell.  If they are spending a couple of thousand on a cruise vacation, and have an accident or get sick the day before, travel insurance will cover it.  Also, if the vacation provider goes out of business, travel insurance may also cover that.  There is also less chance they will go after their agent if you have given the chance to buy insurance.

In California you need a license from the state to sell travel insurance.  They have anew FLASH system that allows you to get your application on line.  http://www.insurance.ca.gov/0200-industry/0050-renew-license/0200-requirements/travel-agent.cfm Basically, you can qualify if you’re a non-felon over 18.  It does not appear that you have to take the insurance test, but you are restricted to only selling travel insurance.  You no longer have to have an appointment (job) to get your license.  The cost is $44, and you can not do it on-line https://interactive.web.insurance.ca.gov/eLicense/front.  You will have to visit an Department of Insurance office to have your fingerprints taken.

 

Companies that can get you in the business (Host Agencies)

There are two ways of starting an agency.  The first is to actually start an agency yourself and get the certification necessary to sell airline and other tickets.  There is a lot involved in this, and you need experience in the industry to know what you are doing.

The other is to work for an agency as their agent like real estate agents work under a broker.  This agency is referred to as the Host agency and your agency is referred to as the Home agency even though you business might be operating out of office/retail space and have employees.  But they take about 20-30% of the commission.  They do provide access to the Computerized Reservation Systems (CRS) you will need to book tickets.  Before you sign up with an agency, see what travel products they offer.  Do you feel comfortable with them?  Cruise lines pay big commissions.  Some resort packages can also be lucrative.  It might be better to sell more packages and pay a bit more to the agency than to make a higher commission on packages that are hard to sell.  Note, NACTA has a warning about agencies that offer to make you an agent overnight for less than $500.

 

These are some agencies that allow you to work under them for a reasonable price.  Be careful we have not vetted these.  If you have any other Host Travel Agencies that work out better, please let us know.

 

Host Travel Agencies in Orange County

Note, we have added up all the monthly fees to come to an annual amount to make it easier to compare costs.

  • http://www.authorizedagents.com Authorized Travel Agents of San Juan Capistrano.  It costs about $200/yr to join and you pay more for different levels of service.  http://www.authorizedagents.com/options.html It goes up to about $600/year.  This actually seems like you are getting a lot more for your money than with the cheep internet deals our intern found (see below).  They provide a 3 million dollar Errors and Omissions policy with these fees.  They state that they are not interested in agents who are mainly interested in discounts and benefits.

 

  • http://www.uniglobetravelcenter.com Uniglobe Travel of Irvine.  They offer a mentorship program which allows you to work with other agents for $1,100/year (with a 50% commission split to start off), and they charge $900/year to be your host agency for new agents, and $750/yr if you are experienced.  You may want to buy your own E and O insurance as they do not indicate it’s included in the fees.

Host Companies based in Florida

  • Cruise Planners Franchise http://www.cruiseplannersfranchise.com/
    • Franchise Cost–This depends on your level of experience.  As with some of the other agencies, their structure seems to be designed to discourage discounters.  Although your franchise fee will be considered on an individual basis, this is their general fee structure:  $0 For highly experience agents coming over from a different host company.  You need to have $150,000 in sales during the past year to qualify.  $3,200 For agents with less experience.  To qualify, your experience can in a travel agency or may be in many hospitality related jobs such as hotel management or airline work…  If you do not have any travel related experience the fee is around $10,000. But many of their most successful home agencies have been started by people with no travel related experience.
    • They are a American Express Travel Services Representative which adds a lot of creditability as this name is very well know by the general public.
    • They offer a 6 day training class in Florida.
    • According to their franchise director Dan Hicks, they offer the highest commission rates in the industry.  They vary based on the type of product sold.  The average commission rate is 16% of gross sales.  And you collect commissions on the entire cruise vacation package–hotel stays, airfare, rental cars, off ship excursions.

The above have been recommended by the NACTA, and they have locations you can visit.  They both offer Errors and Emissions insurance for agents with basic coverage included in the fees.  Below are some bargain host agencies that our OCBusinessStartup.com intern found on the internet.

 

Bargain Internet Host Agencies

The Ticket Counter

http://www.theticketcounter.com/Savings.html Become a travel agent for $400.00.  They offer a free website, and training on how to book travel.

 

KLM Travel group.  They offer an entire package of training and web support for $500-600/year—depending on if you want to make payments or not.

http://www.khmtravel.com/commissions.php

 

PST Travel http://www.ptstravel.com/Home.aspx

This company offers one of the least expensive and quickest ways to get into the travel business.  The cost to start is around $400.00, (payment plan available)  and you start by splitting the commissions 60-40% with them.  They are affiliated with a lot of companies, and if you want to you can start booking travel the same day you sign up.  They offer a 7 day training program in a luxury condo resort in various vacation destinations.  (Tax deductible.)  You can also get in on big discounts as cruise ships and resorts discount their prices to get travel agents familiarized with the vacation experience the offer.  Call Camille 800-940-8801 ext. 239 to get started.

 

More Information

You may want to check out these books before you make a bigger investment.


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