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India is a destination that has touched the soul of many tourists due to its vibrant and bustling markets, serene mountains, extravagant festivals and picturesque monuments. Apart from having a huge scope for domestic tourism, India is also a major attraction for tourists from all over the world. Many states in India, such as Himachal Pradesh, Goa & north-eastern states, depend on tourism for their primary revenue.
According to Statista, the Travel & Tourism market in India is expected to generate a revenue of approximately US$23.72 billion in 2024. By 2028, the projected annual growth rate (CAGR 2024-2028) of 9.62% is expected to result in a market volume of US$34.25 billion. Therefore, given the demand of this market, starting a travel agency can turn out to be very profitable. However, starting this business isn’t that easy and requires various steps and processes. If you’re wondering how to start a tour and travel agency in India, continue scrolling through this article!
Individuals have the liberty to start a tour and travel agency under various business entities available. It is upto them to select the type of business form for themselves. Generally, the preferred choice is a private limited company since it is eligible for several government benefits and subsidies. To find out more about a private limited company, get in touch with the Registrationwala team.
To have a unique name and logo for tour and travel business, trademark registration is really important. It will ensure that other businesses can’t copy your name or logo and will give your company a unique identity in the travel and tourism market.
GST registration is necessary for all the suppliers having a total annual turnover which exceeds the threshold limit of Rs. 40 lakhs (Rs. 20 lakhs for special states). Those who are making an inter-state taxable supply of goods or services are required to take registration under the Central Goods and Services Act, 2017, regardless of the threshold limit.
The table below mentions the SAC codes of travel agents for outward supply.
|
Service |
SAC Code |
|
Reservation services related to accommodations, cruises, tour packages, etc. |
998552 |
|
Reservation services for the convention centers, congress centers and exhibition halls, etc |
998553 |
|
Reservation services related to event tickets, cinemas, entertainment, and other recreational services |
998554 |
|
Reservation services related to transport services |
998551 |
|
Reservation for tour operator services |
998555 |
|
Other travel arrangements and related services |
998559 |
|
Travel insurance & freight insurance services |
997136 |
|
Tourist guide services |
998556 |
|
Visitor information and tourism promotion services |
998557 |
|
Provision of wholesale trade services on a fee/commission or contract basis |
996111 |
|
Retail trade services which are provided on a commission-based or fee-based basis |
996211
|
If you need additional information about GST registration, you can contact our team.
Registration as a travel agency or agent recognized by the Government of India isn’t compulsory but still recommended. The system for travel agency recognition encourages high quality standards and services in the tourism and travel industry. There are several parameters for becoming a government-approved travel agency such as the office space, money invested and the personnel hired along with other conditions. An application needs to be submitted to the Ministry of Tourism to become a travel agency authorized by the Government of India. A travel agency recognized by the government is more likely to get more business, since the customers will have more faith in such a business.
The International Air Transport Association (IATA) represents almost 83% of the total air traffic in the world. It is a travel association which provides various training manuals to the travel agencies who are members of it. We strongly recommend the travel agencies to become a part of this association and derive all the benefits which can be received from being a member. By being a member of IATA, tour and travel agencies can offer international travel packages to the customers with attractive discounts on airfare worldwide. In order to successfully run a tour and travel agency, you can get enrolled in various IATA courses which can range between Rs. 70,000 and Rs. 1,20,000, which is inclusive of the service tax and the IATA registration fees.
Although the IATA exam is not mandatory, it is still desirable. In order to apply for the IATA examination, the candidate must have a minimum of 10+2 education or a university degree which can be in any stream. It is advised to take this exam if you are a travel manager, personnel from the tour and travel agency’s back office, mid-level supervisor or manager, or a part of the agency’s administration.
When your business is at an initial stage, your initial capital requirement will not be much as you won’t be purchasing expensive equipment or get a huge office space since you will have limited staff and operations in the beginning. But as your business grows in the future, you will require funds to expand your business further for bigger space, more staff, services, etc. Initially, you will have to mainly focus on branding, marketing and advertising so that customers can discover your tour and travel agency. Since there won’t be a lot of business coming in right away, having just a few staff members will be enough. To finance your business, you can opt for loans provided by government or private banks, use profit earned in the share market, mutual funds, etc.
In today’s time, having a website for your tourism and travel website for your business is crucial to run a successful business. You must market your business digitally and tell the customers about various packages offered by your business at attractive rates, so that they can't say no to your deals. With time, as your business grows and becomes more popular, you can charge extra for the packages as by that time, you’ll be a trusted brand with satisfied customers.
The website for your business should be aesthetically pleasing, have beautifully-clicked images of travel destinations, provide correct and detailed information on the locations and the activities that can be done or are included within the package, transport, and recommendations.
You must have an online booking system for your website, so that if customers want to pay on the website itself, they can do so easily. You can also provide the emi option to the clients since many people cannot afford to pay for their package right away, even if they do like it.
It is an extremely important step to do marketing on social media platforms. This way, people from different states, UTs and even abroad can discover your business. You must follow the four Ps of marketing which are Pricing, Place, Product and Promotion for success. You must spend the majority of your money on marketing, since this is what will get you the most leads.
Setting up a tour and travel agency in India is a great idea, given the rise in the tourism industry. You must first decide the kind of business form you want to opt for. Generally, a private limited company is the first choice. Although registration as a government-approved travel agency isn’t compulsory, it is still recommended. Getting enrolled in an IATA course will give you more insight about the functioning of the tourism industry. You must ensure that you do enough market research and learn about your competitors. It is also important to do social media marketing, and have an aesthetically pleasing website that’ll leave a positive impression on whoever visits your website. It is necessary to do social media marketing actively on all the popular social media platforms in India.
Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.
