Travel Business Startups

There are plenty of good reasons to launch a travel business startup including profit opportunity, new directions, and just being in a business you’ll really love and meeting people engaged in life.

A travel agency, tour operator marketplace, or travel software provider might be one of the most investible business opportunities of the next 5 years.

In this post, let’s explore the possibility of your startup and what to consider. It’s a brief guide to the big picture, so you can then speak with a travel business consultant about the challenge and potential and then hire a great travel marketing specialist to bring in leads.

Travel entrepreneurs are attracting venture capital and venturing into new global and domestic market niches. It’s a global customer base, which makes it seem like there’s an accessible customer somewhere.

Faith, Confidence and Success Come From Preparation

However, you’ll face challenges, such as a competitive business model, competition/saturation, software, complexity of the market, financing, and finding skilled people who care to help. Because, success takes more than just filling job descriptions. It means caring, dedication, enthusiasm, and willingness to learn and grow. It takes faith in the opportunity — confidence we’ve made the right decision.

Finding the right software and digital marketing dream team is critical.  And while digital marketing is too often treated as an afterthought, filled with unskilled talent, you should beef up this element with skilled talent.  After all, marketing reaches, impacts and persuades prospects, whereas tour product catalogs don’t. Finding talent who care and want to be your marketing heroes should be job #1.

Exploring the Possibilities

Even with the above challenges, you might want to take the leap into the travel and tour sector. It’s an exciting, digital, diverse, and complex landscape. It might even give you some sort of personal transformation you’ve hoped for.  Coincidentally, personal transformation and feeling the real joy of travel are the two most powerful benefits travelers are seeking.

Yet, aside from creative human marketing skills, this travel market might be giving you all you need:

• powerful SaaS travel management software — subscriber-based, online, ready to enable your tour feed, with impressive customer self-help features, trip visualization and tracking, and secure, trusted payment gateways.
• growing demand for travel experiences — post-pandemic travelers are desperate for meaningful human experiences far from their homes.
• growing volume of destinations — countries opening up to international travelers with new resorts, hotels, venues, and services for tourists
• lots of complexity, changing tastes, and ages/types of travelers — room for creativity to fulfill these unique experience preferences to establish a strong brand affinity.
• efficiency of operations — allowing you to scale up, expand offerings, and spend more money on marketing & promotion and business partnerships.
• digital marketing channels — providing 24×7 reach at all touchpoints in the travel shopping journey.

Travel Forecast: According to the 2023 USTOA Annual Conference and Marketplace survey 9 out of 10 (92%) members anticipate growth in sales in 2024. Two thirds (63%) of those respondents are “optimistic,” forecasting a “boom year” with growth anywhere from 7% to 10% and higher.  94% of tour operators reported growth in revenues. 

The Top Tour Companies and Marketplaces Were Once Startups

Other startups have launched in the travel and tours sector and are now dominating the space, earning massive, growing revenues, with amazing cash flows and a solid customer base.   These companies have their competitive strengths, yet they have significant weaknesses too such as competing on price alone (a dead end model), corporate depersonalization, and a dedication to volume and mass advertising domination, rather than mastering deep niches with unique, personally relatable marketing and travel experiences.

“It’s not so much careerist travel and tour managers who are succeeding, but rather digital marketing enabled entrepreneurs who can see how to take software and strategy to scale up a tour business for million dollar results.”

 

High Demand, Low Risk, Easy Entry

Risk and barriers to entry are relatively low compared with other tech-enabled sectors.  Subscribable SaaS travel software removes a lot of cost.

Demand for travel is strong, and with the economy expected to turn around given the deglobalization and lower interest rate trends, and political swing to Pro-US domestic policies. Which means Americans will be earning a lot more in the coming years and ready to buy the rich, rewarding travel experiences we create and cleverly market to them.

20 Good Reasons to Launch a Tour Marketplace Business:

1. expected economic growth in 2025/2026 as interest rates drop
2. an increase in business travel given economies will be growing in 2025 and beyond
3. travel and tourism is a happy, pleasant place to work in
4. a shift in travel industry demand toward guided tours
5. low barriers to entry and low startup costs
6. consumer markets that want real life experiences instead of accumulating material possessions
7. better digital technology for tour company management and reseller business development
8. better technology for sales conversion
9. SaaS software for unlimited scaling
10. massive Gen Z and Millennial travel audience, along with Baby boomers, all interested in travel experiences
11. travelers need assistance, insights, inspiration, and tools
12. travelers, young consumers have given up on saving for a million dollar home and are instead traveling and investing in themselves
13. there is a continuing period of revenge travel, out of the pandemic
14. flexibility – you don’t have to follow some rigid model, but can create a business that fits you
15. creation of a business brand that you will build and own for ongoing revenue and value
16. high revenue potential because you can scale up fast
17. mobility — work from anywhere you like around the world
18. more opportunity to travel and experience life more deeply
19. sell your own tours, travel packages, or someone else’s
20. build a continuously growing database of subscribers online

Consider that if you’re a millionaire, you might lose more in your stock portfolio in one month, than you’ll risk losing in trying this venture.

What Could Go Wrong?

Building a successful company would have to take failure into account. So the key question to ask is why travel companies have failed? The reason could be any of these reasons:

Poor Financial Management

• Inadequate cash flow management and budgeting.
• Overdependence on debt without sufficient revenue generation.
• Misallocation of resources and funds.

Lack of Market Adaptation

• lack of confidence to adapt to changing market trends and customer preferences.
• inability to pivot during industry disruptions, such as pandemics or economic downturns.
• unwillingness to adopt consumer-friendly and cost effective digital and online travel booking platforms.

Too Much Well Funded Competition

• inability to compete with larger, well-established travel agencies and online travel agencies (OTAs).
• offering undifferentiated products and services that do not stand out in a crowded market.
• inability to access quality suppliers/marketplaces

Poor Marketing and Sales Strategies

• Ineffective or outdated marketing strategies
• weak investment in marketing, advertising an d promotion
• failure to leverage digital marketing and social media to reach potential customers.
• weak unique value proposition and brand image
• ineffective lead nurturing and sales conversion process.

Customer Service Issues

• poor customer service leading to negative reviews and loss of reputation.
• inability to set and meet customer expectations and resolve complaints promptly.

Operational Inefficiencies

• inefficient internal business processes leading to higher costs and lower productivity.
• lack of investment in technology and automation.
• weak supply chain management and coordination with travel partners.

Economic and Environmental Factors

• economic downturns reducing consumer spending on travel products/choices
• political instability, travel threats affecting key travel destinations.

Regulatory Challenges

• failure to comply with industry regulations and legal requirements.
• navigating complex international travel regulations and restrictions.

Lack of Innovation

• stagnation in product and service offerings.
• lack of innovation in branding and marketing messages.
• not adopting new technologies, such as AI-driven personalization and mobile apps.
• failing to offer unique and memorable travel experiences.

Overexpansion

• expanding too quickly without adequate market research and preparation.
• overextending resources and capital, leading to financial strain.

Poor Leadership and Management

• ineffective leadership lacking vision and strategic planning.
• poor decision-making and lack of accountability.
• weak commitment to building a winning business

Knowing what might have tripped others considering the same type of business you’re hoping to launch, is very important.  Typically, the failures stem from financing, digital delivery, and marketing strengths.

Steps to Build Your Travel Startup:

1. decide on which area of travel you’re passionate about and would enjoy
2. decide on what type of business or marketplace you’d like to launch
3. determine the startup cost and where you can get financing
4. research the travel market, competitors, and opportunities, and determine the niches you can realistically serve
5. determine sources of vacation packages, tours, hotels, and other products you might offer (suppliers or marketplaces)
6. determine who will be your business partners, support partners and advisors
7. decide on long term objectives for your business — where will you be in 5 years?
8. research your unique value proposition and what your brand image and business name should be
9. what are your specific customers needing, wanting and expecting?
10. decide on what type of ecommerce, booking system, or business website you’ll need
11. establish the core staff you’ll need to get started
12. set up efficient operations processes (booking, customer support, itinerary management)
13. research your business and legal risks and create a contingency plan
14. create your marketing and advertising plan and customer acquisition strategy
15. create your marketing collateral and content and decide on where you’ll publish it
16. ensure you have a quality sales analytics system set up to understand how you’re creating your customers
17. register your business and obtain necessary licenses
18. hire your core staff and launch your new website

For Tour Companies, Consider these Product Offerings:

1. Group Tours

• Escorted Tours: These are fully guided tours where a tour director manages the itinerary, logistics, and provides information about the destinations.
• Small Group Tours: Similar to escorted tours but with fewer participants, offering a more intimate experience and often including off-the-beaten-path destinations.
• Large Group Tours: These tours involve larger groups of travelers and can be more cost-effective but less personalized.

2. Private Tours

• Customized Private Tours: Tailored itineraries based on the traveler’s interests and schedule, often including a private guide and vehicle.
• Family and Friends Private Tours: Designed for families or groups of friends who want to travel together privately, allowing for a personalized experience.

3. Adventure Tours

• Hiking and Trekking Tours: For outdoor enthusiasts interested in exploring nature on foot, often in remote and scenic locations.
• Safari Tours: Wildlife-focused tours, usually in Africa, involving game drives and other wildlife viewing activities.
• Water-Based Adventures: Includes activities like rafting, kayaking, scuba diving, and sailing.

4. Cultural and Historical Tours

• Heritage Tours: Focus on historical sites, landmarks, and museums, often including in-depth historical commentary.
• Culinary Tours: Explore local cuisine through food tastings, cooking classes, and visits to local markets.
• Religious Pilgrimages: Tours centered around religious sites and experiences, such as trips to Jerusalem, Mecca, or the Vatican.

5. Luxury Tours

• Exclusive Luxury Tours: High-end experiences with premium accommodations, fine dining, and exclusive access to sites.
• Private Yacht and Cruise Tours: Luxurious travel on private yachts or small luxury cruise ships.

6. Special Interest Tours

• Photography Tours: Designed for photography enthusiasts, focusing on picturesque locations and providing tips from professional photographers.
• Wellness and Spa Tours: Centered around relaxation and wellness activities, including spa treatments, yoga, and meditation retreats.
• Festival and Event Tours: Planned around major cultural events, festivals, or sports events.

7. Self-Guided and Independent Travel Packages

• Self-Drive Tours: Pre-planned itineraries where travelers drive themselves from destination to destination, with accommodations and activities pre-booked.
• Independent Travel Packages: Includes flights, accommodation, and some activities, but allows for a more flexible schedule and independent exploration.

8. Eco and Sustainable Tours

• Eco-Tours: Focus on environmentally friendly travel, often including activities like wildlife conservation projects, sustainable lodging, and educational experiences about local ecosystems.
• Volunteer Travel: Combine travel with volunteer work, often in areas like conservation, community development, and education.

For Travel Agencies, Consider these Offerings:

 1. Vacation Packages

• All-inclusive resorts
• Multi-destination tours
• Cruise packages

 2. Flights and Airfare

• Domestic and international flights
• Group travel bookings
• Flight and accommodation bundles

 3.  Hotel and Accommodation Bookings

• Luxury Hotels
• Budget-friendly options
• Unique stays (e.g., boutique hotels, hostels, vacation rentals)

 4.  Tours & Activities

• Guided city tours
  Adventure and outdoor activities (e.g., hiking, scuba diving, safaris)
  Cultural and historical tours

 5 Cultural and Historical Tours

• Ocean cruises
• River cruises
• Themed cruises (e.g., luxury, family, adventure)

 6. Car Rentals & Transportation

• Airport transfers
• Local transportation (e.g., buses, trains, shuttles)

 7.  Travel Insurance

• Trip Cancellation Insurance
• Medical and health coverage
• Luggage and personal effects protection

 8. Specialty Travel

• Honeymoon and Romantic Getaways
• Family vacations
• Wellness and spa retreats

 9.  Custom and Personalized Travel

• Tailor-made Itineraries
• VIP and luxury travel services
• Private tours and experiences

 10.  Group Travel

• School and educational tours
• Religious and pilgrimage trips
• Corporate travel and incentive trips

 11. Adventure Travel

• Eco-tours and sustainable travel
• Extreme sports and adventure activities
• Wildlife and nature expeditions

 12. Event and Festival Travel

• Travel arrangements for major events (e.g., sports, concerts, festivals)
• Destination weddings
• Conference and convention travel

Most travel companies pick and choose what product packages to offer based on availability, cost, customization, profitability, and target market served.

Your final choices will likely take some work and time to ascertain.

Tour Businesses Source of Revenue and Customers? Google

This graphic below courtesy of Spyfu gives us a hint at the amount of SEO traffic these sites attract each month. And that’s just one traffic channel.

And the leader in the sector is Viator.com, who grab 8 million visitors each month, (7.7 million in SEO clicks) in addition to 686k clicks from PPC campaigns (average of 90 cents per paid advertising click). At 30 cents per click valuation, the traffic from free search engines is over $2 million per month, or $25 million per year to Viator.

Multiday tours or longer are more lucrative and can be marketed more creatively, where value can be added. Some long tours sell for as much as $15,000.

And the wealthy elite also have their tour selections:

A Burgeoning Global Travel Market

Travel demand is there in the tens of millions each month. And it’s not just Europeans and North Americans. Billions of people are able to travel now and they’ll be buying your tour packages even though you didn’t even target them.

“The rise of online marketplaces has opened up new distribution channels for tour and activity operators ” — Treksoft guide to marketing for Tour companies.

If you’re still skeptical after reading the travel market forecast, then consider that tours can be combined to capture more value for the customer. And tours can be wrapped in a full travel package, which opens your business up to a wider base of travel consumers.

Rise the Online Tour Marketplaces

After you develop a sound business and marketing strategy, you will use a digital tour management software platform that  allows you to sell tour packages, and resell other tour operators tours (they’re selling via many other marketplaces too).  You might start as a tour reseller for commissions, until you’re ready to build your own unique travel packages, tour offerings and guided tour services. Whatever you are selling, there’s a way to augment or upsell to grow revenues.

A growing sector: There are more tour guides, tour operators, destinations, better transport and accommodations, and more opportunities for unique personalized tour experiences. Borders aren’t a problem anymore since these are services provided by tour guides in the respective countries.

Tour operators are reachable online, where you can persuade them to market their tours on your tour website. They may even prefer to use your service exclusively at some point later.

Excellent SaaS Software You Can Build a Business On

To manage all of it, there are many affordable tour travel management software products to use. Some of them are truly marvelous delivering amazing digital services ranging from tour marketplaces, to marketing and sales analytics, to tour booking management. SaaS software offers incredible value to smart entrepreneurs who will become the next millionaires and enjoy a great business to work in.

Of course, having your own standalone software to keep your customer base private is important, because providers may design to lure your customers away.

After you plan and build the basics of your tour business, you’re able to look ahead to expanding creatively to market more unique tours, with associated tour guides, and having your tours placed in the big tour marketplaces. Companies discover their strengths along the road and adjust accordingly.

For entrepreneurs, affordable SaaS software lets you offer tours from online tour marketplaces and make a commission on any bookings. And in the process of doing business and using your analytics reports, you will find lucrative tour hotspots where you can create your own actual real life tour guide team with personalized itineraries and even provide your tourgoers with excellent trip management tools which make them feel empowered, up to date, connected, safe and secure.

This is what modern tour buyers want.

And you can scale your business up magnificently.

Competition Proves Entrepreneurs Want to be in this Space

There are tour companies doing extremely well. As an example, one recent digital marketing specialist job offer with one of the big tour companies paid US$90,000 per year.

A smaller Canadian-based tour company, toursbylocals, received some excellent funding to get their business rolling. $33 million is nice booster shot!

Besides, these companies are earning a lot of money. They build a big customer base and keep them loyal and continue growing revenues.

Ragtag Group of Competitors Not Optimized to Compete

Yes, others are entering the tour sector too. However, many of the businesses operating in it are outdated, hanging onto old outdated tours and a decaying customer base. The big tour companies are pushing them out of business. Many of them could fight back with modern tools and marketing strategies, but they don’t.

They lack confidence, digital business tools, digital marketing knowledge, and a deep understanding of digital business strategies. Mostly, it’s a lack of funding, confidence and strategic marketing acumen.

That’s unfortunate, but no one should take that to mean the opportunity in this sector is impossible for them.

It’s not old school travel agency managers who are succeeding, but rather digital marketing enabled entrepreneurs who can see how to take software and scale up businesses with it. They build their business model on what is real.

Right now, I’d like you to go and review all the top tour marketplaces, and visit each one. Get a feeling for their unique value proposition, brand messaging, products, prices, and the tours they market. I think you’ll recognize the profitable opportunity here.

Sure, there is lots to learn, but with good engagement and sales analytics tools, and testing smartly, we’ll put together a great tour website that is compelling and fascinating to tour buyers — for growing bookings and our own customer base.
It’s all about learning well and fast. As any tech entrepreneur in Silicon Valley will tell you, the expertise will come later, via your data and your marketing and sales management tools.

You don’t have to be an expert right now. You’ll build that expertise smartly via your tools.

You might be at the cusp of something life-changing and ultimately very profitable for you. All that’s left is assembling your dream team.

Reach Gord at 416 998 6246.