Travel Agency Business Plan Template
If you want to start a Travel Agency business or expand your current Travel Agency, you need a business plan.
The following Travel Agency business plan template gives you the key elements to include in a winning Travel Agency business plan.
Travel Agency Business Plan Example
I. Executive Summary
Business Overview
[Company Name] is a travel agency that offers U.S. and international travel packages for travel enthusiasts living and working in [Location]. It offers a wide selection of travel services for top national and international cities, island getaways and small, hidden gem vacation spots.
Founded by best friends, [Founder 1] and [Founder 2], who love to travel, [Company name] was established by true travel enthusiasts with a deep passion for travel. It aims to satisfy the travel needs of any traveler and aspires to have travel packages for trips to North America, Latin America, Asia, Europe and the Pacific Islands.
Products Served
Below is [Company Name]’s initial offerings:
- U.S. Travel Packages
- International Travel Packages
- Sightseeing and Food exploration packages
- Luxury Travel
- Group and Solo Packages
Customer Focus
[Company Name] will primarily serve residents who live in [Location]. The demographics of these customers are as follows:
- 92,500 residents
- 32,863 children
- Average income of $86,500
- 69% married
- 54% in Management/Professional occupations
- Median age: 33 years
Management Team
[Founder 1] will serve as the overall head of the business. He has a degree in Business Management from [University] with years of previous experiences in managing businesses. [Founder 2] is a graduate of [University] with a degree in Accounting. He has been working for big accounting firms and banks in the city and will serve as the company’s accountant.
Success Factors
[Company Name] is uniquely qualified to succeed for the following reasons:
- There is currently no other travel agency in the community we are entering that offers such a wide variety of travel packages
- Our vacation packages are highly customized and customer-centric to ensure satisfaction
- Travel Itineraries are crafted based on personal experiences to ensure authenticity
- The management team has a track record of success in the business
- Travel agencies are a proven, successful business concept in the U.S.
Financial Highlights
[Company Name] is seeking total funding of $350,000 to launch. The capital will be used for funding capital expenditures, salary, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Travel related expenses: $115,000
- Design/build: approximately $85,000
- Working capital: approximately $150,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | |
|---|---|---|---|---|---|
| Revenue | $1,080,000 | $2,472,768 | $2,830,825 | $3,240,728 | $3,709,986 |
| Total Expenses | $962,000 | $1,539,107 | $1,719,742 | $1,901,321 | $2,112,641 |
| EBITDA | $118,000 | $933,661 | $1,111,082 | $1,339,407 | $1,597,344 |
| Depreciation | $25,600 | $25,600 | $25,600 | $25,600 | $25,600 |
| EBIT | $92,400 | $908,061 | $1,085,482 | $1,313,807 | $1,571,744 |
| Interest | $29,946 | $26,202 | $22,459 | $18,716 | $14,973 |
| Pre Tax Income | $62,455 | $881,858 | $1,063,023 | $1,295,091 | $1,556,772 |
| Income Tax Expense | $21,859 | $308,650 | $372,058 | $453,282 | $544,870 |
| Net Income | $40,595 | $573,208 | $690,965 | $841,809 | $1,011,902 |
II. Company Overview
Who is [Company Name]?
[Company Name] offers international travel packages for travel enthusiasts living and working in [Location]. The company offers a wide selection of vacation packages, from adventures to sightseeing to food-themed trips. [Company Name] aims to satisfy the travel needs of any traveler.
It offers a wide selection of destination services from top national and international cities, island getaways and small, hidden gem vacation spots. Its services will span North America, Latin America, Asia, Europe and the Pacific Islands.
[Company Name] is a travel agency that prioritizes the needs of its clients and focuses on providing the best, most authentic travel experiences. The company’s service offering will hinge around quality service and product offerings.
[Company Name]’s History
[Company Name] was founded by best friends, [Founder 1] and [Founder 2] who love to travel. [Founder 1’s first name] and [Founder 2’s first name] have been travelling together for years and found a common denominator to all the travel agencies they have tried. They were either overpriced and not really worth it, or didn’t offer exciting deals. This is when they realized that a lot of people have been travelling without truly fully experiencing the place and the culture.
In [Month, Year], [Founder 1] and [Founder 2] launched [Company Name], creating travel experiences based on their personal experiences and were carefully curated to meet the most lofty expectations.
Since incorporation, the Company has achieved the following milestones:
- Found office space and signed Letter of Intent to lease it
- Developed the company’s name, logo and website located at [website]
- Established an online presence on major social media networking sites
- Developed service menu and pricing model
- Recruited full-time assistant
[Company Name]’s Products/Services
[Company Name] will be able to provide the following services:
- U.S. Travel Packages
- International Travel Packages
- Sightseeing and Food exploration packages
- Luxury Travel
- Group and Solo Packages
III. Industry Analysis
In recent years, many travel agency franchises have grown primarily due to their specialization in selling cruises and other complex travel packages that often cannot be booked directly online. Also, over 60% of travel agents are now home-based, a trend that has increased industry profit, as home-based operators have fewer expenses than traditional brick-and-mortar businesses. The industry’s key drivers include:
– International trips by US residents: The departure of US residents to international destinations is a key driver of this industry. US residents use travel agencies to book airfare, cruise ships, accommodations and tour packages, driving industry growth.
– Consumer spending: Changes in consumer spending affect how much individuals spend on travel-related expenses. As consumer spending increases, travel spending is likely to increase as well, which bolsters demand for the travel agencies that book those trips.
– Domestic trips by US residents: Trends in residents traveling within the United States on overnight trips for vacations, business or other purposes are key factors influencing revenue for this industry. An increase in domestic trips by US residents typically benefits travel agencies, since they may use travel agencies to book those trips.
IV. Customer Analysis
Demographic Profile of Target Market
Company Name] will serve the residents, workers, and travel enthusiasts in [company location] and the immediate surrounding area.
The area we serve is a city with a very diverse population group. The city has mostly moderate to high income families and individuals who can afford to avail the services of a travel agency. Most of the population are working individuals with disposable income, but little free time, so they need someone to help plan their vacations.
The precise demographics of the town in which our location resides is as follows:
| Wilmette | Winnetka | |
|---|---|---|
| Total Population | 26,097 | 10,725 |
| Square Miles | 6.89 | 3.96 |
| Population Density | 3,789.20 | 2,710.80 |
| Population Male | 48.04% | 48.84% |
| Population Female | 51.96% | 51.16% |
| Target Population by Age Group | ||
| Age 18-24 | 3.68% | 3.52% |
| Age 25-34 | 5.22% | 4.50% |
| Age 35-44 | 13.80% | 13.91% |
| Age 45-54 | 18.09% | 18.22% |
| Target Population by Income | ||
| Income $50,000 to $74,999 | 11.16% | 6.00% |
| Income $75,000 to $99,999 | 10.91% | 4.41% |
| Income $100,000 to $124,999 | 9.07% | 6.40% |
| Income $125,000 to $149,999 | 9.95% | 8.02% |
| Income $150,000 to $199,999 | 12.20% | 11.11% |
| Income $200,000 and Over | 32.48% | 54.99% |
Customer Segmentation
The company will primarily target the following customer segments:
- Families: This segment makes up the bulk of leisure travel in the U.S. We aim to provide these families with travel services that will give them unique and affordable vacation experiences
- Individual and couple travelers: Our unique, highly customized travel itineraries will be targeted specifically towards this market. Individuals and couples without children tend to have more disposable income and appreciate curated experiences.
- Businesses: Some companies travel with their employees for team building activities and the like. We plan to contact these companies and provide them travel packages for groups.
V. Competitive Analysis
Direct & Indirect Competitors
Travel Planner Inc.
Travel Planner Inc. was founded in 1994 and offers home-based franchises, with franchisees selling leisure cruises and other packaged vacations full- or part-time. The company offers land excursions and cruise ship vacations in Alaska, Asia, Australia, New Zealand, Bermuda, the Caribbean, Europe, Hawaii and the South Pacific, the Mediterranean, Mexico and the Panama Canal. Cruise Planners also offers wedding planning services for shore-side ceremonies in the United States. Travel Planner Inc. now has an estimated 3,266 franchisees in the United States.
The company’s growth strategy relies on competitive pricing, quality, reputation and service. Travel Planner Inc. also specializes in group travel, such as destination weddings and associations, which could attract consumers willing to spend more.
Travel with Thomas
Established in 2012, Travel with Thomas is a cruise travel planner specializing in Europe, Mexico, and The Caribbean. In addition, this full-service travel agency offers a variety of other travel arrangements, such as Destination Weddings and Missionary / Faith Tourism.
The agency works to stay current in the world of travel, and cultivate relationships with Preferred Suppliers. They also offer exclusive American Express Card member benefits.
Travel Network
Established in 1998, Travel Network is a travel agency that bills itself as a “personal travel concierge.” To do this, it helps customers find the destination and resort that meets their expectations. In addition, someone from the agency is always on call when for traveling clients.
The agency specializes in Destination Weddings and Honeymoons; Sandals & Beaches Resorts; Karisma Hotels GIVC; Princess and RCCL Cruises; Disney Family Adventures & Disney Vacations; European Tours, Independent Travel and River Cruising.
Furthermore, it is certified for these destinations: Jamaica, Las Vegas, Mexico, Aruba, Alaska, Hawaiian Islands, New Zealand and many more.
Competitive Pricing
| Airline Commission | Hotel Commission | Packages Commission | |
|---|---|---|---|
| Travel Planner Inc | 10% | 20% | 30% |
| Travel with Thomas | 11% | 25% | 35% |
| Travel Network | 10% | 22% | 33% |
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Location: [Company Name]’s location is near the center of town, in the shopping district of the city. It is visible from the street where many small business owners and managers walk to and from work on a daily basis.
- Client-oriented service: [Company Name] will have a full-time assistant to keep in contact with clients and answer their everyday questions. The founders realize the importance of accessibility to their clients, and will further keep in touch with their clients through monthly webinars on topics of interest.
- Management: The founders have been extremely successful working in this industry and will be able to use his previous experience to craft customized travel packages that suit their every need.
- Relationships: Having lived in the community for 25 years, The founders know many of the local leaders, newspapers and other influences.
VI. Marketing Plan
The [Company Name] Brand
The [Company name] brand will focus on the Company’s unique value proposition:
- Client-focused service and product offering
- Travel packages that suit any travel styles
- Affordable and high quality travel packages
- Hassle-free transactions
Promotions Strategy
Social Media and Online Marketing
With the majority of the people now online, the company will invest resources in online ads for different social media platforms to reach potential clients. We will create ads that will successfully create positive conversions. A company website will also be developed. This website should be able to direct traffic from search engines as much as possible. In order to do this, the company will use highly-focused, specific keywords to draw traffic to its website, where potential clients will find a content-rich site that presents [Company Name] as the trustworthy, well-qualified travel agency that it is.
Publications
[Company name] will place print advertisements in key local publications, including newspapers, area magazines, and local sport programs. Additionally, the Company will print brochures and place them in specific locations frequented by target individuals, such as supermarkets and real estate offices.
Major Publications
We will make careful use of advertising in selected larger publications. [Publication or newspaper name] has a circulation of xyz, and we can expect to reach a wider geographic region of customers on a limited basis. Advertisements with major publications will be used selectively, based on cost-effectiveness. These ads will include discount coupons so that response to the ads can be tracked.
Commute Advertising
We will drive attention toward [Company name] by hiring workers to hold signs alongside [route or highway]. Advertising on heavily traveled commute routes are an opportunity to alert large numbers of working individuals with disposable income of our opening.
Direct Mail
[Company Name] will blanket neighborhoods surrounding its locations with direct mail pieces. These pieces will provide general information on [Company Name], offer discounts and/or provide other enticements for people to purchase our services.
Ongoing Customer Communications
[Company Name] will maintain a website, social media accounts, and publish a monthly email newsletter to tell customers about new offers and more.
VII. Operations Plan
Functional Roles
The Company intends to employ [X] travel leaders, [Y] administrative assistants, and [Z] Accounting and management staff. The company may have to add more people during peak seasons. [Company name] anticipates having [X] customers on a weekly basis.
In order to execute on [Company Name]’s business model, the Company needs to perform several functions. [Company name] anticipates using the services of X employees, divided into the following roles:
Service Functions
- Travel Agents
- Customer Service
Administrative Functions
- Administrative Assistant
- Accounting
Milestones
[Company name]’s long term goal is to become the go-to travel agency in the [city] area, its surrounding cities and even nationally. We seek to the standard by which other providers are judged.
The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Founder 1] will serve as the overall head of the business. His degree in Business Management from [University] and his previous working experience with managing businesses gives him the knowledge and the know-hows on running [Company Name]
[Founder 2] is a graduate of [University] with a degree in Accounting. He has been working for big accounting firms and banks for over 10 years. At [Company Name], he will serve as the head Accounting Manager who will handle all the finances of the company.
Hiring Plan
In order to launch, we need to hire the following personnel:
- Travel Agents
- Accounting associate
- Customer Service
- Marketing Associate
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come from the sale of travel packages and individuals travel components i.e.- flights, hotels, rental cars.
The major costs for the company will be the salaries of the staff, and rent for an office location and travel. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.
Capital Requirements and Use of Funds
[Company Name] is seeking a total funding of $350,000 to launch. The capital will be used for funding capital expenditures, salary, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Travel related expenses: $115,000
- Design/build: approximately $85,000
- Working capital: approximately $150,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Number of customers per day | Per location |
|---|---|
| Year 1 | 10 |
| Year 2 | 15 |
| Year 3 | 20 |
| Year 4 | 25 |
| Year 5 | 30 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
