Lisa Eidman, CTC
How many times have you heard someone say: “I love to travel and look up things online; I should be a travel agent”? If you have heard it once, you have heard it dozens of times if you work in the travel industry. But the good agents know that there is so much more to this business. You may not even realize that you are a hobbyist, or you may be just starting in the industry. This white paper will focus on three key areas, and for illustrative purposes, I have related my own business’s value proposition to the relevant areas:
- The difference between booking travel as a hobby and booking travel as a business
- An overview to building a full-time travel business, with attention to the essential skills that you need to be successful
- How to establish and maintain credibility as a travel agent with your clients and within the industry
Hobby or Business?
When is your travel business a hobby, and when is it a real business? There are subjective and objective measures of that. Subjectively, your travel business is usually considered a hobby if you book mainly for yourself and a very few of your family or friends. You probably don’t want to invest in your business, you like to research and find the best deals, and you enjoy that bit of commission that comes with booking your own travel.
The IRS has a more objective definition of hobby versus business, and anyone that looks to write off their vacation expenses would be well advised to understand those rules. Many people are surprised at how specific and narrow the IRS rules are for writing off expenses. You are required to take into account all facts and circumstances with respect to the activity. The IRS lays out nine different considerations, and no one factor alone is decisive. These factors are not all objective either, which may surprise you since they are from the IRS. Some of the determining factors are being professional in your approach, keeping accurate books and records, and identifying your personal motive? [Note 1]
Many people enter the travel business precisely because they love to travel, have planned their own vacations, and maybe even friends and family ask them to plan trips for them. Those are certainly good reasons to take an interest in becoming a travel agent and probably why many of us have gotten into this business. Beyond that, many people enter the industry because they think they will get free or deeply discounted vacations. Ha, a seasoned travel agent will say. Those perks are earned and not handed out just because you start to sell travel to yourself or your family.
Keys to a Successful Travel Business
One important note is that the barriers to entry to becoming a travel agent are very low. It does not take a lot of money to start a travel business. In many places, certifications and licenses are not required or are very inexpensive and easy to obtain. Travel & Leisure wrote an article that, in so many words, said that it is very easy to become a travel agent, even without any specific employment background [Note 2]. While this is technically true, this is a reason why there are so many travel agents, and in my opinion, so many mediocre travel agents. So, what do you need to think about to build a successful travel business? As I was starting in this business, I thought about my value proposition. What do I offer that will attract and maintain clients? How can I stand out from the competition, both online and with other agents?
As you determine your value proposition, it is crucial to consider specific skill sets when starting a new venture, especially in the travel business. The one thing that surprises me most when people tell me that they want to be a travel agent is that I rarely hear them talk about loving to sell, develop relationships, and offer excellent customer service. In fact, I listen closely for it and have never heard anyone say that they want to be in the travel business because they love to sell and develop business. Sometimes, they will talk about customer service because they had a bad experience with a travel agent. Having this sales and customer service skill set and mentality is critical. So many travel agents do not understand this until they flounder and wonder why their business is not growing. Travel Agents sell travel, and it is a sales business throughout every step of the process. You will be an inefficient businessperson if you do not enjoy the “qualifying” aspect of sales, and it will be even more difficult if you do not have passion around “closing the deal.”
And good service is certainly no less important than sales. You can be the best salesperson, but you cannot sell and then have mediocre service. I live in a “small” town – a lot of people, but news travels fast. I have been on the receiving end of quite a bit of unsolicited business coming from a lovely person working as a travel agent. This agent was good at sales, entertaining, and personable but very scattered beyond that point. Unfortunately for her, she had many one-time clients referred to me by people who knew my service standard. I feel bad for this person, but people will not return to that agent because of the lackluster service. For this reason, one pillar of my value proposition is “Customer Service on Steroids.”
Once you have decided that you have the sales and customer service skills to operate a travel business, many other things are important, of course:
- How will you organize your business from a legal standpoint? Will you operate independently or affiliate with a host and or consortia. I appreciate and am grateful for the affiliations that I have selected for my travel business, and they add a great deal of value and extra benefits for my clients. Those affiliations and what they bring to my business are a pillar of my value proposition: “Value & Benefits of Affiliations.”
- How will you market your business? Marketing will determine how people find you and how you grow your client base. Will your business be all word of mouth? Will you use social media, email marketing, other media advertising? There are so many ways to market a travel business. You will need to figure out what works best for you. My suggestion is to try one or two things at a time. Marketing can be overwhelming!
- How will you keep track of your business? There are so many steps between guiding the client to the right trip to the time they come home from that trip. You will want to know what stage every trip is in at any point in time. An excellent operational process is essential. I still struggle with standardizing my operations and procedures. It costs me a lot of time and added stress, and I know that it will cost me opportunities over time. This procedural documentation is on the top of my list so that I don’t have to start over with each client! And, if the stress of missed opportunity doesn’t motivate you to get organized, remember that the IRS also wants to see accurate records and books.
- What skills and experience do you have, and what will you need to learn? For example, I came into the travel business with over 35 years of accounting and finance experience. I was very familiar with setting up a business, keeping accurate records, and many of the operational aspects of the business – even if I don’t like writing or being consistent with the procedures. I needed to learn the various supplier systems, understand what travel products I wanted to sell to clients, develop relationships with suppliers, learn about unfamiliar destinations, and many other things specific to the travel industry. I had to figure out what certifications and licenses did I want or need?
- When you start out in travel, the tendency is to sell anything to anyone that wants to book with you. I quickly realized that I like selling certain types of travel more than others, especially places that I have experienced myself. It was always a struggle for me to research and book the trips that did not interest me. And I realized that I am not doing my clients any favors by struggling through their trips. So, if a trip comes up that I am not interested in, I will refer that business to another agent specializing in that area. I am also now at the point where I am starting to add sub-agents to my business. Those agents specialize in the regions or types of travel that hold little interest for me. It took me a while to believe that specializing is the way to go! I have had the privilege of traveling extensively to different parts of the world, and now I put that specialized experience to use when working with my clients. It is so important to me that my “First-hand Travel Experience” is another of the pillars of my value proposition.
- Finally, it is so easy to get overwhelmed with a new travel business. Coming into this business, I knew that I needed to invest my time, talent, and some dollars to be more than a hobbyist. You can’t do everything at once, so you need to figure out what you can do to get the best start. For me, it was investing with a host agency that soon became affiliated with the consortia that I felt would best suit my client base. That host offered me the type of training that I needed to kick start my business and enough back-office tools and support to get me going. As I have grown my business, I have invested in different tools (invoicing software, itinerary builder, task tracking software) and resources (marketing education, ready-made content) that I know will make my business efficient. I also realized that I could not do everything myself. There are certain things that I love to do and am good at (selling, building relationships) and will most likely always do myself. There are other things that I really don’t enjoy (writing emails, social media content/posting), and so I have found others that are good at that. As I build my business back from the pandemic, I want to get to the point where I can hire an administrative assistant to keep me on track procedurally. These people make up my “virtual team” and allow me to focus on my strengths and enjoy what I do. That makes it so much easier for me to do an excellent job for my clients!
Establishing and Maintaining Credibility
This is the final, but no less critical, area of focus to become a successful Travel Agent. It may be the most challenging thing to do on an ongoing basis, but so important that I feel it deserves its own section for discussion. Establishing and maintaining credibility is all about connection. Connection with your clients, yes, but also relationships with your key suppliers are so important. For many people, this is about pushing beyond the bounds of comfort. This is true now more than ever. We have all been working at home and are just now getting the chance to get back to in-person conferences, lunch meetings, presentations, and other in-person connection and networking opportunities that we had pre-pandemic. It will be very easy to stay home now and continue zoom meetings with our suppliers and clients. Our pants don’t fit anyway, right? But this will be the worst thing to do if you want to grow a business.
In sales-focused businesses, the “KLT” factor is so important. Bottom line, people shop and spend money with people or companies they Know, Like, and Trust. That includes seeing your face in person from time to time when possible. And zoom is still good for those clients that are out of town. No one thought about doing more than a telephone call before zoom came on the picture. That is an improvement for those long-distance clients.
There are so many things that you can do to increase connection with your clients so that you become known as the go-to trusted Travel Agent. Participation in networking groups, Chambers of Commerce, membership-based groups like clubs, philanthropic organizations, houses of worship, affinity groups where you have the same interests as other group members (book club, hiking, etc.) all help you to meet others and show them your expertise in more or less formal settings.
This type of community involvement has worked particularly well for me in growing my business. I learned many years ago that it is always good to serve first and serve genuinely. Serve because you are interested in the cause or the mission of the organization that you serve. Some of my best clients have come from my synagogue and my local Soroptimist Club, where I have served on boards. I did not serve on the board to promote sales. In fact, my board memberships pre-dated my travel agent career. I served on these boards because I genuinely believe in what they do. As a result of my service, people have come to know, like, and trust me. By doing an excellent job in my volunteer service, people trust that I will take care of their vacation with the same diligence.
The other side of connection is getting to know your preferred suppliers. When I started going to conferences and trade shows, I noted who seemed to be the most successful travel agents. What I noticed very quickly was that they were the ones that were always with the suppliers. They invited them to meals, to have drinks, to hang out. They made a point to spend time with their valued partners. I also noticed that many travel agents were more comfortable hanging out with other agents. I decided to be the agent that looks to maximize my time with the suppliers. Sometimes, it is difficult because many suppliers are at least a generation younger than me and, keeping up is not always easy! But I have also found that they appreciate my knowledge too and that I am willing to be “all in” to whatever the experience or event of the moment may be. Because of that, we get to know each other on another level. Again, I do this with sincerity, and the more I do it, the more fun I have while making great connections. I can think of more than one BDM that other agents say will not return their calls, but I have not had that experience, no matter how much or how little of their product I am selling at the time.
For me, enhancing credibility by “developing personal and deep relationships” with clients and suppliers is another pillar of my value proposition.
Hobby or Business – It is Your Choice!
I have explained how to determine if your travel agent efforts are a hobby or a business. If all of the effort involved to set up a successful travel business is intimidating, you are not alone. Especially in these pandemic days, the travel business is not for the faint of heart. Many people do stick with the hobbyist end of the business, and that is ok. Just be careful of how you account for your hobby from a tax standpoint. If you are ready to take the plunge, I have provided some essential things to consider when setting up and growing your business. I hope that these observations, personal stories, and suggestions help you with that decision.
References
Note 1: IRS FAQ’s: How do you distinguish between a business and a hobby https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses
Note 2: Travel & Leisure Magazine, online edition “How to Become a Travel Agent”
https://www.travelandleisure.com/jobs/how-to-become-a-travel-agent
