By Tom Ogg
Before you enter the travel industry you should have a relatively good idea of what your business will be. In today’s world just having a website hoping that someone will book something isn’t going to make it happen for you. Or, being a generalist hoping that someone will contact you and book something is not a viable idea either. Travelers today are much more sophisticated than that. They want to deal with someone experienced, knowledgeable and effective. They are probably going to spend a lot of money on their vacation and they want somebody who is going to make it better for them. They could just book it online, but they want an expert to help them.
The travel industry offers so many opportunities for new agents it is staggering. One of the most difficult things to do is to focus your efforts in a specific area of opportunity. But, this is what needs to take place. You need to become an expert in your specific niche of travel. The good news is that there is so much online training that it isn’t the difficult task that it once was.
At the very beginning of your effort to evolve a viable business concept there must be passion for the niche that you end up pursuing. Without the love and passion for whatever you pursue, you are quite likely to not succeed. As an example, if you love to surf and love to travel to surf, you might want to consider going into the surf travel business. The same is true for skiing, or SCUBA diving. If you absolutely love Brazil, maybe you should become a Brazil specialists. Let’s say that you love Brazil, but also fascinated with the Amazon River’s flora and fauna, perhaps you should package group travel exploring the Amazon. You can see how passion is the most motivating factor in developing a business concept.
The Numbers of the Travel Business: The travel business is actually a very easy business to understand. And, the underlying numbers of the travel business are also very easy to understand.
Yield: The yield of a transaction is determined by the commission embedded in the selling price, or a mark-up on a net rate (sometimes both commission and a fee). The yield in a trisection is important because this would be the gross income generated by the transaction. If you are selling 3-day cruises with an average yield of $24.00 it is going to be much more difficult to make money than if you are selling world cruises with internal yields of $18,000.00. I am sure that you see the importance of yield.
Cost per Transaction: If your operation is fully automated and you can process 3-day cruises for less than $.10 per transaction, perhaps you can make some money selling them. But, if you are offering a high level of in-home service to your client you may burn more than the $24.00 yield on a 3-day cruise in gasoline just getting to and from your client’s home. The cost per transaction is very important when evolving your business concept.
Number of Processed Transaction per (week, month, year): Again, if you are selling 3-day cruises and the yield is $24.00 with a cost of $.10, you will gross $23.90 per transaction. If your objective is to make $10,000.00 per month, you will need to complete roughly 400-transactions per month, or 20 per (working) day. On the other hand if you are selling world cruises and would like to make $10,000.00 per month, you only need to conclude one sale ever couple of months, or so. The bad news is that if your business concept is to sell 3-day cruises with a high level of in-home service, it won’t take to long to go broke.
Your Business Concept: Once you have passion for a particular niche in the travel industry, you should research potential competition and see if your concept might be a viable idea. The elements that you bring to the party that may make you successful beside the mandatory passion are;
Knowledge: How knowledgeable are you regarding your concept. Using the surf travel idea, if you are a novice surfer, I doubt that you are going to be able to sell surf travel to accomplished surfers that want to deal with someone they can trust. You need to either already have, or quickly obtain the necessary knowledge to fulfill your concept’s promise.
Experience: If you have traveled to many surf destinations and know the most popular ones better than most surfers, you are probably going to be successful because your have experienced the destination. You would know just about everything that someone who has not been there would want to know. If you haven’t, you would probably need to start doing so as part of building experience.
Ability: Operating your business once you have evolved a business concept also requires general business knowledge. Accounting, sales and marketing and management skills are all required. If you have never run a business, nor had any business training, perhaps you might want to enroll in some business classes at your local city college. Starting a business with no experience or training is kind of like trying to fly a jet without getting any instruction first.