Travel Agency Worth

I agree with the experts that a shakeout is taking place due to the current economic downturn. If you have not positioned your agency at this time either to be a part of the larger travel organizations or to become a “boutique,” then you might want to start thinking about your strategies for the future. Your key starting point is determining your agency’s net worth.

There are four critical areas that comprise an adequate and accurate agency valuation plan –

– operations/resource management,
– market position/agency image,
– financial management, and
– business history

Future articles will include financial management, market position/agency image, and business history. Today let’s consider –

Operations and Resource Management

Automation – Computers and Telephones

As a general rule, the more automated you are, the higher your productivity per employee and consequently the higher your profitability. Additionally, more time for agents to have face-to-face or voice-to-voice contact with customers means better service. Bear in mind that if you’ve been computerized for at least three full years, you are over the start up pains and the equipment is part of your routine.

What computerization was to a travel agency five years ago, telephone systems will be for the next five years. Your phone system will make or break you. Chances are if you have an old-fashioned key button system, your productivity is low and your ultimate valuation will reflect that. You should at least have PBX and ACD systems.


Regardless of whether a buyer will be managing your business himself or hiring you to stay on as a contract manager, your personnel are the absolute key to success under new ownership. I have seen agencies sold and then watched half the staff leave the next day with their “following” because they were offered a better deal by another agency. The result is usually a bonanza for lawyers and the disintegration of your former business. You can generally avoid such a crisis if your turnover is low, staff experience levels are high, and you have a strong incentive program supplemented by a solid portfolio.

Other Resources

The travel agency business requires an incredible amount of detailed data and consistent, logical operating systems. The question is: Have you been able to maintain an organization that cuts smoothly through all these ancillary materials and procedures? For example:

– the latest work flow changes in your agency;
– staff telephone manners and the way you present your agency to the public;
– your quality control processes before documents go out to the public;
– updating the mailing list; and
– your system to follow up on hotel commissions

And what about your space? Naturally, a buyer will want to see his new business grow. If your space restricts that, or if your lease is about to be renewed at double the cost, any future projections will be impacted and your agency is worth less. Therefore, prior to sale you might want to check with your landlord as to a potential new arrangement with the new owner.

Good management

The common thread in the criteria above is organization. If historically and financially you have done well, but if the key to your success has been your absolute and autocratic management – i.e., all of the company’s records are in your head – obviously, a new owner will not succeed. Therefore, good management not only shows in the results but in the ability to turn the reins over to new management.

Obviously a potential buyer is far more impressed by an organized, well-planned operation in which you can show your original business objectives, the current variances or changes in plan and your rationale behind it.
In all of the criteria above let me stress the most important common element – consistency – as crucial.

Do you really present a credible picture to the buyer? Do you have a dashboard that measures your activities and allows you to make mid-course corrections in the event one of your “instruments” indicates a problem?

Various Types Of Travel Agencies

Travel agencies basically act as agents who sell travel tickets and products like hotel reservations and others. It should be understood that they would provide services free of charge to the traveler. Instead, the agencies gain profit through commissions on the total cost of the tour. The commission will be taken from the advertised cost or price of the tour.

In this day and age when the internet offers online means of booking for an airplane and travel accommodation, some people believe that they are already obsolete. However, there are still a lot of benefits that travel agencies offer to travelers which cannot be obtained when you book and arrange for a tour on your own. First of all, they free you from the hassles of arranging your own tour. They make everything simple and convenient for you. Most of all, they can get you considerable discounts on fares and accommodations.

There are also various types of travel agencies offering specific services that may be of advantage to your travel needs and preferences. First, there are the general travel agencies and agents which act like ambassadors of tourism. For example, an agency whose headquarters is located in Hawaii may establish offices in other parts of the world. These offices then will advertise and promote tourism to Hawaii where the central office is based. It tries to get and provide better deals to customers so that there will be a higher chance that the customer will book again next time. These better deals they may find from many airlines and hotels.

There are also travel agencies which have specific departments or may specialize on dealing with commercial and business travel. The needs of people who need a business travel may differ from the needs of people requiring commercial and leisure travel. Thus by specializing or appointing specific departments to handle such conditions will allow the travel agency to provide better services to clients.

They may also vary by class. Some are national chains owned by a corporation; others may be franchises from international or national agencies; others still are members of recognized associations; the rest may be independent or owned by local individuals. The national chain class of travel agencies implements consistent pricing and policies regardless of the destination and may offer the best international service to customers. Franchises can provide same perks to clients while locally owned agencies may not have the promotions and price discounts offered by other classes of agencies. The independent types are known to service niche kinds of markets like school field trips, church and sports team who are looking for affordable travel packages. Agencies who are members of associations earn through membership fees instead of commissions.

Some of them may also specialize on shipping cargos and therefore would not be a good choice if you are looking for agencies to cater you with personal or business travel. There are travel agencies offering trips to just about anywhere. These agencies are known as multi-destination. The niche agencies specialize on tours to certain parts all over the world like Greece, Italy, etc.

All About Travel Agencies

Congratulations if you have recently started a travel agency. But wait, your work has just begun. You require unleashing important tactics, to enable sustained and relentless business growth. Following are few easiest, fastest and quickest strategies to increase the sales of your newly started travel agency. Follow every enquiry with five steps of professional communication. One of the biggest mistakes that most of the new travel businesses commit is not constantly following every enquiry. The best way to begin with this is to have a sales team where every consultant without fear professionally communicates with the enquirer. Following are few simple steps of communication:

A courtesy call to find what the inquirer feels about the information supplied to him
E-mail extra information or tip rapidly about the prospect’s trip.
Further send them a letter thanking them for enquiring.
Follow up call to find out their future plans and offer them further assistance. By this time, you successfully establish rapport with them; it is a right time to ask them about the booking details and a final commitment.

All these steps are interchangeable and the key is that they happen over the different mediums like phone calls, direct mail and e-mail.

Types of Travel Agencies

One of the main functions of these agencies is to act as an agent. This includes reservations, selling travel products and tickets and so on, on behalf of one or many suppliers. Usually, travel agents charge a small commission from the overall cost. Check out some different type of agencies:

Commercial and Business Travel Agencies

Most of these agencies have a department of business and leisure travel. The need and requirements of one traveler and the other tends to vary in few ways, and therefore, dividing the duties in different departments helps either department to specialize, finding deals for the leisure travelers on one hand and better deals for business travelers on the other hand. However, there are few agencies specializing in business and commercial travel only. Incidentally, there are not a lot of agencies restricting themselves exclusively to leisure travel.

Cargo Travel Agencies

There are few travel agencies specializing in shipping cargo. Certainly, and that is not completely relevant if you are planning to fly for personal or business reasons. Still, this shows in how many different areas an agency can specialize.

Niche and Multi- Destination Agencies

If you want to divide it in just two types of agencies, you have niche and multi – destination agencies. Multi-Destination are out- bound travel agencies that are large offering flights to any place in the world. Niche agencies are independent focusing on a specific part of the world. Most of the niche agencies cater to the individuals who have families in that country or who go for business regularly. Consider individual preferences, trip objectives and needs while selecting a travel agent. Different types of agencies offer different type and level of services. If you are a regular traveler then you may want to use the services of large corporate travel agency having branches all over the world.