A surprising fact is that starting a travel agency business in the Philippines does not necessarily require a huge amount of capital. Therefore, aside from being profitable, it could be exciting and fun for an entrepreneur who loves the travel industry.
With people showing a lot of great travel destinations on social media, it is no wonder many Filipinos have become more interested in traveling. Therefore, owning a travel agency in the Philippines may be a profitable business as we look into the near distant future.
Let us take a look at the steps on how to set up a travel agency in the Philippines. We will also be exploring the option of a travel franchise in the Philippines for those interesting in the franchising option!
Steps On How To Set Up A Travel Agency In The Philippines
1. The Travel Agency Business Plan
Because your business plan is the draft for your travel agency business, you could consider including the following information:
Executive Summary: This briefly introduces the business and summarizes your plan. For instance, you could decide whether to have a travel franchise in the Philippines or your travel agency (and what benefits and restrictions both possess). Its also wise to include a description of the business, the target market, financial estimates, and the solutions to possible difficulties in setting up a travel agency in the Philippines.
For those who have significant capital to start a travel agency in the Philippines, you could apply for accreditation from the International Air Transport Association, which will prove valuable in brand trust.
*The International Air Transport Association manages airlines, passenger agents, and cargo agents internationally. Therefore, getting accredited would allow travel agency owners to sell domestic and international plane tickets acting as agents for airline companies. The business would also be allowed to re-book, re-issue, or re-validate issued tickets and endorse them to other airlines if needed.
On the other hand, those who do not have accreditation do not have the authorization to release tickets. Therefore, either they purchase from an accredited agent or the airline.
Travel Business Summary: This summary details the distribution of the ownership and the requirements for starting up, such as the capital and location.If you plan to have a fairly small travel agency, a capital of 50,000 PHP to 100,000 PHP could be enough to cover required documents, office equipment, utilities, and lease.
More space and more people would be needed for more travel agencies with critical operations such as partnerships or corporations since there could be more clients. An estimate of 450,000 PHP + is often wise with this scale of business.
Services And Products: You would determine what services or products you could provide to the visitors in this section. Always remember the upsell and cross-selling to maximize your business profit 😉
Market Analysis: This provides more detailed information about the target market and the business’ competitors.
Business Strategy: This section describes the plan on how to operate and build a travel agency business in the Philippines further through marketing and product or services pricing.
Financial Summary: This states the business’ income and costs projections. Even those this is the last section on our list. However, some would suggest that this is one of the essential areas of business. Therefore, it is recommended to spend time studying the costs, prices, and any potential opportunities/threats.
2. Philippines Travel Agency Permits And Licenses
When setting up a travel agency business in the Philippines, you will need to register at the Department of Trade and Industry. This is also required if you plan to start your travel agency business in the Philippines alone or at home. For a corporation or partnership travel agency, the business would need to be registered at the Security and Exchange Commission.
You can refer here for the detailed list of requirements of how to set up a travel agency in the Philippines. In addition, you may wish to familiarize yourself with other legal requirements for setting up a travel agency business in the Philippines. Republic Act 1478
3. The Office Location And Space
Owners need to consider many factors when looking for an ideal location. The most important could be the accessibility to the intended market. Second, the location should be convenient for them. Lastly, the business owner needs to make sure that the space is affordable.
Although office space can be expensive, starting a travel agency in the Philippines does not need a large office space as long as the staff could effectively attend to the clients.
A space of 10 to 15 sq meters could be enough for a home-based travel agency. If you are considering a commercial space with high foot traffic, a space of 60 to 200 sq meters could be also enough to entertain walk-in clients.
4. The Travel Agency’s Equipment
One of the essential steps on how to set up a travel agency in the Philippines is choosing the equipment. These could include computers with good specs, printers, fax machines, landline phones, mobile phones for office use, photocopying machines, CCTV cameras, and vaults.
Sofas and tables to accommodate walk-in clients, desks, chairs, cabinets, and tables are some of the office interior essentials.
5. The Travel Agency Staff
When you are starting to build a travel agency in the Philippines, one of the most critical areas is hiring the right people and having the right team. If your budget is low, Fear not! This is because some travel agency tasks can be computer-generated, saving you time and money. (such as squareup that can make an appointment fast and effortless)
As the business flourishes, having at least two staff members in the office to attend to more customers would be ideal. Aside from catering to walk-in clients, you could offer a more variety of your services.
Expanding the business further, you have the option to hire two employees responsible for ticketing and making reservations, a cashier or an accountant, a receptionist to take calls and take care of the walk-in clients, and a messenger to bring and pick documents.
Although it is not difficult to train staff to make travel reservations, it would be an advantage to get graduates in tourism with a computer reservation system background. Hiring people with experience working for a travel agency is always a good option.
6. Travel Destinations, Packages, And Promos
Depending on your target market, you could decide on what destinations are most famous or profitable. For example, you could target families with children, young adults, senior citizens, backpackers with different tastes, interests, and lifestyles, or business and corporate travelers.
Since destinations are different, the travel agency needs to collect data on hotels, air flight schedules, a list of tourist spots and beaches, and insurance, among many others. But, again, you could anticipate what information your clients would need.
Moreover, you could be open to specific preferences clients could have. You could also offer travel packages to make their decision easier. Preparing packages for some destinations could help your clients. Although pamphlets could be helpful, owners could not expect all clients to decide right away due to some considerations such as travel duration and price.
Since you would prepare a database, you would choose airlines, hotels, resorts, and tour operators to partner with. Clients who are on a budget usually check out promo packages. Nevertheless, it still depends on the travel experience they want and their travel schedule.
Therefore, the ones you would choose could be based on affordability, the convenience of the target market, and profitability.
It would not be a good idea to risk cheaper options with a partner that has a questionable reputation. Even though the price would come at a premium, working with a good reputation partner could go a long way.
7. Marketing For Your Travel Agency In The Philippines
Just like other industries, there are many ways to market a travel agency business. If you were able to build a travel agency in the Philippines with great branding, you could reap many benefits.
To do this, you could give attention to your business’ brand name and logo. Then, you may promote by putting up signages outside your office, malls, and other public places.
You could also take part in travel events and expos or sponsor a booth. Aside from promoting, you could meet people from the same industry, such as vendors and potential partners.
Having a travel agency in the Philippines, it is crucial to establish an online presence. This method is cost-effective and affordable since it can be targeted and measured. You could have a website that contains destinations, packages, airfare promos, and blogs so that potential customers can access much information. (also helps with SEO/website visibility)
Moreover, it could save more time for receptionists since they can focus on other work or clients.
In this age, social media is vital in advertising businesses. Creating a Facebook page, Instagram, or Twitter account is an essential step on how to set up a travel agency in the Philippines. On Facebook, you could promote your agency’s travel packages and create engagement. On Twitter, you could answer queries and post whenever you have a new blog post. On Instagram, you could highlight photos of different interesting destinations.
Nevertheless, the most effective promotion would be word of mouth. Therefore, it is a good idea to make clients happy by offering competitive rates and top-notch service.
Starting A Travel Agency In The Philippines: Bonus!
8. Client Profiling
You could include this step after you see the initial turnout of having a travel agency business in the Philippines. You could start establishing a client profile based on the clients you had. In client profiling, you could make an outline of the client type, travel preferences, packages or services availed, travel months, and destination.
It would be a great idea to create a system for managing customer relationships. You could send a promotional email that is relevant to the previous services they had.
For instance, you could offer a previous client a cheaper package with a similar experience at a different destination. Upselling could work if you keep track of your previous clients’ preferences. Offering group travel for seasonal travelers would also be a good idea at the early start of your travel agency in the Philippines. Some are delegates for school or a religious group who would go on a pilgrimage.
The goal is to make these customers return. Nevertheless, the competition is stiff. To stand out, it would be best to be better and stand out from others. Here are some good selling points:
- Excellent Customer Service
- Truthful Advice About Travelling
- Great Prices
- One-Of-A-Kind Product Packages And Services
- Supporting Charities
- Complete Support Post-Sales
9. Making Profits From Your Travel Agency Business
With hard work in the right direction, there is often a reward. Many factors affect a travel agency’s income, such as the target market, packages offered, and partners. As an estimate, the profit could be around 10,000 PHP for a small travel agency per month, and on peak seasons, it could be 50,000 PHP or more. This profit could be x5, x10, or more depending on the scale o the business.
Commissions and airline bookings’ markups from tours could anyways between 3% to 10%. A more significant number of customers might be needed depending on the business design.
Once you have enough budget, you could hire more staff to add services and equipment such as visa processing at consulates and embassies, passport applications, and assistance in completing the documents, photocopying, or travel insurance application.
Travel Franchise In The Philippines, Hosting And Tips
It does not matter if it is your first time to start a travel agency in the Philippines or an experienced owner; having a travel agency franchise or host agency could be easier and less risky. Since a travel franchise in the Philippines would mean working with big travel businesses, you could establish a professional network and boost your profits.
Having a franchise, you could have your travel agency operate it and take advantage of an established name in the industry at the same time. Furthermore, as a franchisee, you would be provided with training, systems, promotions, and building a travel agency business in the Philippines.
As for having a host agency, you are a member of an organization. So, by joining one, you could get reasonable rates. However, the marketing, training, and support are limited and not as strong as what a franchise could give you.
If you are still confused about whether to get a franchise or host to start a travel agency in the Philippines, here are essential points you could consider:
Tools And Assistance: When you find a franchise, the marketing programs, training, technology tools, and business advancement coaching are reliable in terms of starting and growing your travel agency business in the Philippines. For a host agency, these are limited. Therefore, you might need to find external sources for support and training.
Cost: Getting a franchise would mean paying higher upfront costs, including tools and assistance. It would be cheaper if you opted to go with a host, but a word of warning, obtaining the tools and assistance, could add up on costs.
Commission: Royalty is paid for most of the franchises. Royalty is a small percent of your overall sales. For a host, the amount varies, and it usually uses commission splits or shared commission.
Brande Name: You could gain integrity when you find a franchise from an established and reputable name in the industry. This could be most helpful when you are just starting. As for a host agency, you would have to create a name and awareness alone since it does not offer a recognizable name.
Here is an original package from WOW Philippines Travel Agency. For a 250,000 PHP franchise package, you would get:
- Use Of The Name And Logo
- Professional Training For Staff
- Usage Of The Agency’s Website
- Hotels, Tours, Airlines, Resorts, And Transfers Proprietary Contract Rates
- 3-Year Renewable Contract
- Laptop With Information And Proprietary Program
- All-Year-Round Support
- Marketing Assistance Through Social Media
- Promotional Use Of The Agency’s Travel Photos And Videos
Addional Tips When Starting A Travel Company Philippines
Tip 1: Niche
As mentioned, the competition in the travel industry is stiff. Therefore, it is essential to decide the niche that owners would like to succeed in. The agency could focus on giving services to corporate clients or offering domestic travel. You could further expand if you had enough budget. You could offer tours abroad or take on foreign clients.
Tip 2: Suppliers
The success of your travel agency could depend much on your tie-up with airlines, resorts, hotels, tour guides, and bus operators. Therefore, you could choose your supplier based on the quality of its service, how cost-effective it is, and the convenience it would give to your clients. It would not be good to take risks here, so it would be best to deal with trustworthy suppliers.
Tip 3: Promos
Most people are busy, so they would want everything to be convenient, even traveling. Therefore, they may be willing to spend more if that means going on vacation stress-free. Owners could take advantage of this by creating pre-arranged tours. A package that provides the airfare, transfers if needed, hotel accommodation, and itinerary on the destination of choice.
Tip 4: Website Optimization
With a lot of people using the Internet, it would be crucial that potential customers could see your travel agency when they type keywords and search online. This is termed search engine optimization (SEO). Most customers would not likely access if the site did not make it to the top search results. Therefore, you could focus on making your business website rank. You could do this by obtaining a fast site and utilizing keywords in your site’s content.