If there is a sector in the market that has been revolutionized by the internet, this sector is the one of travel and tourism. Nowadays, anyone with a trip ahead seeks out information on the web and a good portion of consumers purchase over the internet. But is opening an online travel agency (or OTA: Online Travel Agency) really a good deal? What do I need to open? What care to take? And, especially, what is the investment to be made?
If these questions have crossed your mind, but you have not yet been able to answer them, it’s time to clear up your doubts and bet on this business. Find out the following,
What you need to open your online travel agency:
Make sure you have the right profile
The advantages of online travel agencies are the same as those of any e-commerce: you can work from home, do not need physical space or have rental expenses and, depending on the size of your business, you do not even need employees. But for those who want to start in the industry, this is one of the best options, since the growth of purchases of tourist products via the Internet is only growing, and the tendency is that this does not reverse for a long time. But don’t forget traditional methods; promoting with brochures. If you rely on the traditional method, finding cheap brochure printing locally is the first step.
However, remember that liking traveling is not enough reason to open an online travel agency. You must also be organized, enjoy dealing with the public, be well-connected, and preferably with a customer base already set up.
Choose your business model: franchise, consolidated or customized?
If you think you have the right profile to open an online travel agency, then it’s time to choose your business model: For those who do not have much experience, it is best to have a consolidated model in which you just resell products. The downside is that the commission is low, rotating around 7.5%. For those who want to have a support in financial matters and already leave with a consolidated brand, the best option is the franchises. The biggest problem here is that there are sometimes advertising and royalty fees, which can increase the cost of the operation. If you already have experience in the industry, you can open an agency on your own. In this case, a custom template is advised. The downside is the need to take all the risks of the business, in addition to having to be aware of the legislation to open a company and the registration.
Identify your available capital
As we have already said, knowing how much you can invest will also be crucial in deciding which business model is best for you: Consolidated model requires the least investment: membership fee less than $ 1,000 and monthly fees ranging from $ 200 to $ 500. The investment in franchise varies, but usually it is less than $ 4,000 to acquire the franchise and work from home through the site. No working capital is required and the estimated return on investment is four months to a year. In the custom model, the sky is the limit, since the investment depends on the complexity of the project. Regardless of the model chosen, if you are organized and competent, your OTA has everything to go right.