A travel agency is a business that deals in selling travel-related products and services on behalf of suppliers such as airlines, hotels, resorts, cruises, tour operators land transportation, trains, etc. It is also seen as a place or establishment where people can secure information, expert counselling and make arrangements for travel by air, sea or land to any point in the world.
This type of business was said to have first started in the mid 19th century when Thomas Cook first organized a one-day excursion in open carriages of Midland Railway company carrying a group of 500 passengers for the price of 1 shilling. That excursion package lid down the foundation of a travel agency business.
In the Philippines, the industry recognizes two types of travel agencies according to IATA accreditation:
IATA agents – these are agencies accredited by the International Air Transport Association (IATA) , the international regulating body for airlines, passenger sales agents and cargo agents. Having been accredited, they are trusted by the airlines to issue tickets, directly oversee the rebooking, reissuance, or revalidation of tickets issued, or cause the endorsement to other airlines in case needed. At present there are 112 IATA agents in the Philippines.
- non-IATA agents – as the name implies, they are not accredited with IATA hence they are not authorized to issue tickets. They either buy from an IATA-agent or directly from the airline.
Todate there are several kinds of travel agencies according to market niche which one must relate to before going thru the steps of business registration. Some of it are:
- Travel Management Company (TMC)
- Wholesaler / Consolidator
- Corporate Travel Agency
- Marine Travel Agency
- Leisure Travel Agency
- Independent Travel Agency
- Online Travel Agency
For clarification, a TMC is a travel agency that holds office within the premises of a multinational company or international organization that they are exclusively serving. They serve as the Travel Department of that company or organization. The other types of travel agencies mentioned above are self-explanatory.
Once you have identified your niche , proceed with the steps in registering a travel agency business:
- Find an ideal location. Initially base it on your market niche and initial products that you want to offer. For instance, selling domestic tickets and short Asian or domestic packages might do well in a shopping center surrounded with several subdivisions . Make sure you have high foot traffic in your area of choice. Your office should at least be 15 sq mtrs.
- Find an ideal location. Initially base it on your market niche and initial products that you want to offer. For instance, selling domestic tickets and short Asian or domestic packages might do well in a shopping center surrounded with several subdivisions . Make sure you have high foot traffic in your area of choice.
- Check with the local government business licensing section if they allow travel agency in that city or municipality. Note that some cities have quota in licensing certain types of business.
- Think of a nice name for your travel agency, both for offline and online use.
- Process your licenses and permits . Decide if the business is sole proprietorship or corporation.
- If it is sole proprietorship, go to this link – DTI Business Name Registration Site, click on New Application, fill it up, just go on as directed. Pay the corresponding fee at the nearest DTI office.
- If it is a partnership or corporation, register a user login then reserve a company name at SEC i-Register . Pay the corresponding reservation fee thru SEC Teller or nearest Union Bank branch. Name reservation fee costs P40 for 30days, such an ample time for you to comply with the registration requirements.
The requirements for SEC Registration are:
- Name Verification Slip
- Articles of Incorporation and By-laws or Articles of Partnership
- Treasurer’s Affidavit/Authority to Verify Bank Account
- Bank Certificates of Deposit (notarized in place where bank is located)
- Written Undertaking to Change Corporate Name by any Incorporator or Director, Trustee, Partner **
- Registration Data Sheet
These documents formats can be generated online except for the Bank Certificate which should be secure from your bank. You need to put in the paid-up capital and secure the bank ceertificate. Paid-up capital will depend on the kind of operation you want to have and as may be required when you go thru accreditations. IATA agents normally have minimum P3M paid-up capital. DOT requires minimum P500,000. If it is a simple operations, purely “agent” activities like reselling, just follow the minimum paid-up requirement of SEC, though P100,000 is reasonable.
- Login again to your SEC i-Register account then proceed as directed to generate your SEC registration forms. Make sure you select the Tourism and tourism-related activities, it is a user-friendly system and you will be guided well by it so don’t worry. Once generated, print out four (4) copies, have it signed by the Board of Directors, have it notarized, attach the bank certificate and name reservation proof of payment, then submit all together to SEC Window. For reference on fees, click here. If the documents are all compliant to the requirements, registration is processed within 24hrs, although the Stock Books and registration certificate is claimed after several days.
- Once you have copy of SEC registration, go to the city or municipal business licensing office and secure Mayor’s Permit.
- For BIR registration, go to the BIR office nearest to your agency location, file a new application attaching copy of your Mayor’s Permit, then secure Authority to Print receipts. You will be asked to come back to claim the BIR registration certificate and attend an orientation seminar on reporting schedules.
6. Equip your office. Again this will depend on what kind of travel agency you want to operate. The conventional ones do have CRS (Computerized Reservation System) in their counter and these computers are usually provided by CRS companies. For smaller operations, provide equipment for three sales and reservations staff, one accounting staff, one cashier, the messenger, and you, the manager. Communication lines , internet connection, are of course necessary.
7. Source, search, hire the right staff. It is advisable to hire one experienced reservations agent for senior staff. Source the rest from fresh graduates or advertise.
8. Establish relationship with suppliers. In case you have decided not to be IATA-accredited yet, establish business relationship with IATA agents. For hotels, resorts, packages, secure rates.
9. Once you feel confident that you know the business, set up your own website describing what you do and how you can help clients
Should you need coaching on any of the step above, leave me a message.
Should you want to attend a seminar on this , register here.