The Travel Agency Franchise Industry
The main type of travel franchise is the travel agency franchise, featuring companies such as Cruise Planners, Dream Vacations (formerly CruiseOne), and Expedia Cruises.
According to recent research by IBISWorld, the cruise and travel agency franchise industry in the United States is comprised of over 8,000 businesses, creating a market size of about $3 billion.
Now while many of these franchises have cruise in the name, they all offer much more than cruise bookings. Typically run from home, these franchises help customers create their ideal “air, land and sea vacations” as Expedia Cruises puts it.
Travel agency franchises specialize in the sale of travel, tour and accommodation packages and services for both international and domestic travel. According to the U.S. Bureau of Labor Statistics’ Occupational Outlook Handbook, travel agents typically do the following:
- Arrange travel for business and vacation customers
- Determine customers’ needs and preferences, such as schedules and costs
- Plan and arrange tour packages, excursions, and day trips
- Find fare and schedule information
- Calculate total travel costs
- Book reservations for travel, hotels, rental cars, and special events, such as tours and excursions
- Describe trips to clients and give details on required documents, such as passports and visas
- Give advice about local weather conditions, customs, and attractions
- Make alternative booking arrangements if changes arise before or during the trip
Travel agency franchises in the United States thrive due to their ability to sell cruises and complex travel packages to travelers who don’t want to deal with the hassle of the logistical demands of vacation planning.
Travel agencies are a popular research target of prospective franchisees because many travel agency franchises are Internet-based businesses that can be run from home (or anywhere else the franchisee wants to set up). Because of that setup, along with the fact there is very little to no physical inventory, these franchises tend to have lower initial investments and ongoing costs than many other franchise types.
Why Buy a Travel Agency Franchise Now?
<blockquote>The travel industry is resilient, and as restrictions ease, the demand for travel will be high.
Being a travel advisor is more than just knowing the trendiest travel destinations. Advisors protect their clients’ travel investments.
When travel restrictions went into effect, travel agents advocated for their clients to get them home safely and get refunds or credits for future travel. Travelers who opted to book without a travel professional often found themselves on hold for hours and with limited options.
Even as the world opens back up, travelers will need to navigate a web of guidelines that will vary from destination to destination. Travel agents will play a critical role in providing guidance on safe destinations and activities and protecting travelers’ investments.
~ Cruise Planners</blockquote>
If the stats from this past summer are any indication, travelers are ready to prove the resilience of the industry.
According to AAA, over the 2021 July 4th holiday weekend, travel returned to 98% of its pre-pandemic highs, with 5% more road-trippers than in 2019 and 90% as many airline travelers.
And, as noted in the Cruise Planners quote, travelers are looking for options that facilitate their planning as complexities have arisen. In fact, per data from a Travel Tech survey of over 2,000 individuals, “62% of travelers plan on using an online travel agency or metasearch platform to search and book travel.”
Initial Investment and Opening Costs for Travel Agency Franchises
The opening costs for prospective travel agency franchisees can depend on many factors, including but not limited to: the business system and execution requirements, particularly if the franchisee has a physical location.
According to Franchise Grade, the average investment in the travel and tourism franchise sector is $50,525. But, it is quick to point out that the figure doesn’t tell the whole story. There's a striking difference between the average and median.
As stated in its Travel and Tourism Franchise and Business Opportunities report, “Of all Travel and Tourism franchises, five have an investment lower than $24,140. The average initial investment is skewed because the most expensive franchise in this sector is $234,798.”
Franchisors offer estimates in their Franchise Disclosure Document (FDD) based upon their experience establishing, and in some cases operating, units. However, prospective franchisees should keep in mind these estimates are just that—an estimate. Prospective franchisees should review the figures presented with a business advisor, taking into consideration their unique circumstances, before making the decision to enter into a franchise agreement.
Benefits of Being a Travel Franchisee
The benefits of owning a franchise can be numerous vs. independent operation. Here are a few of the top benefits for those who decide to own a travel agency franchise instead of going at it alone.
Name Recognition: When it comes to finding a service provider, people tend to deal with someone they have a familiarity with. Franchises tend to have established brand names that, in many instances, have been around for years. If you buy a travel agency franchise, you will be given the right to associate your business with that franchise company's name, trademarks, and logo.
Advertising: Getting your name out there can be expensive and sometimes it can be hard to know where to spend your advertising and marketing budget. With a franchise, national advertising is typically done by the franchisor. In addition, though local advertising is generally up to you, you’ll have guidelines in place to help guide you.
Training & Support: A popular feature with all franchises is the training provided. While in business, franchisees will have access to the franchisor’s operations manual, computer systems, and other items designed to help you successfully manage your travel agency franchise.
You can also check out many more related franchises here on Franchise Direct, such as: