Starting a travel agency business

QUESTION:

I am interested in starting a business as a travel agency. Do you know the requirement I need to start and how I can go about it? I am in Jamaica. Thanks in advance for any valuable information.

- Sheena

BUSINESSWISE: The first thought that came to mind when I received your question was whether a travel agency would be a good business to start now, particularly given the widely held view that the industry is waning.

In fact, in 2011, United States (US) President Barack Obama drew the ire of American travel agents when he described the profession as obsolete. I'm in no position to make such a pronouncement. However, I suggest you pay close attention to the long-term industry outlook and use that data to guide you in deciding whether and how to start this business, an issue I will return to later.

Starting a travel agency is no easy undertaking and requires significant time, skill and financial outlay. They are also subject to strict local and international regulations. In fact, there is a law which specifically governs travel agencies in Jamaica, known as the Travel Agencies Regulation Act, which can be found at the website of the Ministry of Justice - www.moj.gov.jm.

According to Pamela Reese, managing director of Jetaway Travel Service and president of the Jamaica Association of Travel Agents (JATA), there are many local and international requirements that must be met.

Reese estimates that the process of registration, approval and licensing can take up to two years. The first step in satisfying the local requirements is to register your company or business name with the Companies Office of Jamaica.

You can then obtain an application form from the Registrar of Travel Agents (RTA), which must be completed and returned with the following:

a) Evidence of good character and integrity by way of two recommendations from a commercial bank, attorney-at-law, justice of the peace, or any other person satisfactory to the registrar. For companies this must be shown for each director;

b) Evidence of financial ability to operate a travel agency by way of a bank guarantee or other evidence satisfactory to the registrar, indicating the availability of sufficient funds to provide working capital for at least three months to cover overheads like

rent, telephone, advertisements, electricity, salaries, etc;

c) A bond with surety in the sum of J$100,000;

d) Fidelity guarantee insurance policy in the sum of J$25,000 for each cashier employed;

e) Copy of receipt for inspection fee of J$5,000 payable at the Collector of Taxes;

f) Copy of the Certificate of Incorporation of a company or evidence of the registration of the business name;

g) Copies of the Articles and Memorandum of Association for the company.

An application for registration must be made for each location you plan to operate. You must also satisfy certain human resource requirements,including having on staff a trained travel agent with at least five years experience, another with at least two years experience and a cashier.

After receiving your application, the RTA will inspect your premises and examine the relevant documents to determine whether to grant the application. If approved, each registered agency must pay an annual registration fee of J$2,000.

So far I've only outlined the local requirements. In order to carry out your main function of booking and selling international airline tickets and other such arrangements you must fulfill international requirements mandated by the International Air Transport Association (IATA).

IATA is the trade association for the world's airlines, representing 84 per cent of total air traffic. To become an accredited IATA agent you must apply for accreditation and pass inspection.

For the specific requirements for Jamaica, visit: http://www.iata.org/services/accreditation-travel/accreditation-travel/P...

If you need assistance in navigating these processes you can consult JATA.

In the meantime carefully consider yourskills and resources before starting. Determine upfront what you must do to differentiate your agency and gain a competitive edge — which brings us back to the industry outlook.

According to The Economist, travel agents have existed since 1855 but the industry has been in steep decline in recent years.

In 1995 the US had 30,000 registered travel agencies, yet by 2012 that number had reduced by more than 60 per cent to under 10,000. The decline has been blamed on major reductions in commission paid by airlines and increased direct sales by airlines to customers online. Airlines also offer services traditionally provided by travel agencies such as booking car rentals and tours.

To compete effectively agencies must increase value added services, find niches and fortify their value proposition. Aim to use your travel planning expertise and resources to save customers time and money while delivering the best possible travel experience.

The application of technology, and a strong online presence will play a key role in your success.

One love!

Yaneek Page is a trainer in entrepreneurship and workforce innovation.Email: yaneek.page@gmail.comTwitter: @yaneekpagewww.theinnovatorsbootcamp.com