Alternate Titles:
- Aiming to Launch a Travel Holiday Planner Business in India? Read This!
- Everything You Need to Know About Launching a Travel Holiday Planner Business in India
Starting a travel agency in India is a lucrative business choice today. The industry is ranked 12th in the world in terms of GDP contribution and is pegged to boom to an evaluation of USD 418.9 Billion by the year 2022. This provides tremendous opportunities for entrepreneurs to play the market and make hefty profits.
If you are planning on the same, you need to do your homework and know everything about how to start a travel holiday planner business in India. So let’s look at the rules and regulations, taxation issues, business plan, advertising idea, and growth prospects in the future.
Business Registration
A travel agency business can be registered in many types. The simplest way to start out is by registering it as a proprietorship firm. For operating the business at a larger scale, forming a Private Limited Company can be a better choice since it is the most widely recognized form of business in the country. This is the case especially if you plan to scale your business through online mediums. Though it is important to note that a minimum of 2 Directors are required to run a Pvt. Ltd.
On the other hand, if you plan to run a company as a single individual, a One Person Company (OPC) is a better choice since the involved compliances are much lower.
In case you are planning to run this business on a part-time basis, a Limited Liability Partnership or an LLP would be a better choice since it requires no audit till the turnover exceeds the threshold of 40 lakhs in the financial year.
Travel Holiday Planner Startup Cost
The cost of setting up a travel holiday planner business in India will vary according to the scale in which you want to launch and operate.
If you are aiming to work simply as a travel agent, the setup cost just involves office expenditure along with the rent. This will range around INR 50,000-1,00,000 depending on your geographical location.
On the other hand, if you aim to launch a full-fledged company with a core team and a dedicated online platform in place, this places the initial investment in the range of INR 5-10 Lakhs. This will also include the cost of registering the company.
Travel Holiday Planner Business Plan
A Business Plan is what proves the practical viability of any business idea and is a key component that lays down the functioning and the profit-making potential of the business. It also lays down both short-term and long-term goals as well as the financial forecasts for the future.
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Since your business plan will be customized on the basis of many factors like your location, scaling plans, the target market, and more, here are some broad aspects that you should take care of while preparing it:
- Objective and Strategy: What are the core objectives that your business aims to build the foundation on? And what are the strategies through which you plan to meet these objectives? Is your focus on providing exceptional customer service or building a strong core team? You need to answer these and more such questions while you lay out the blueprint for your business plan.
- Registration Details: Information regarding the type of business registration and details about the founding members/directors have to be mentioned in a B-plan.
- Investment: How much money has been invested in the business till now? What expenses are already underway and what are the projections for the future?
- Services: Every service that the business aims to provide to its customer base should be mentioned in the plan. Common services in the Travel Holiday Planner Business include planning the logistics of the vacation, booking tickets, consulting about the best vacation destination, etc.
- Market Analysis: What is the current condition of the market? What is the rate at which it is growing? What are the threats that are expected in the future? You get the gist.
- Competitor Analysis: No Business Plan is complete without taking an extensive look at the competitor, or even better – a successful competitor. Take a look at similar companies and research about the services they are offering, their USP, their business model, demography of their clientele, investment details, and the ROI they are generating.
- Market Segmentation: If you have any existing data about the market, utilize it to segment your customers into relevant profiles. This may include their age, basic background, past buying patterns, location, etc.
- Technology: If you want to go down the modern path and aim to scale by leveraging technological solutions, mention about them along with the investment that they will draw.
- Future Forecasts: Include an in-depth analysis about the future of the industry and the effect on your profit-making potential. Mention plans about how you aim to capture the market and deal with both existing and future industrial threats.
- SWOT Analysis: This is another crucial part of a business plan since it gives a complete overview of the capabilities of the business in terms of its Strengths, Weaknesses, Opportunities, and Threats.
Advertising and Marketing Strategies 
Advertising and marketing becomes a driving force for a new business and are chief factors that are primarily responsible for the initial traction and growth. Here are some crucial aspects to take care of in this domain while establishing a travel holiday planner business in India:
- Trade and industry publications: These can be utilized to drive the initial advertising. Some common channels are local newspapers, popular industry-specific magazines, brochures, and sales literature. This can also be coupled with billboards strategically placed at locations with high traffic volumes.
- One-on-One Sales: Personal selling will always be relevant since face-to-face interactions carry a strong message. A certain level of convincing is required to drive the business in a nascent company and personal selling can fare well in such cases.
- Direct Marketing: Channels such as telemarketing and email marketing can be leveraged here to spread awareness about your travel packages and how they are superior to your competitors.
- Events: Trade shows and expositions remain powerful avenues to obtain more business by increasing awareness about your services through direct client interaction.
- Digital Marketing: Being the latest rave in the marketing world, online promotional channels can be used both to spread awareness about your business and land fresh leads. The low cost of access and availability of information is driving more and more consumers to conduct online searches in lieu of offline research. Hence, channels like a business website, social media, mobile marketing, SEO, content marketing, etc. ought to be explored extensively.
Details About Taxation
The taxation norms involved to start a travel holiday planner business include the recently introduced heads of taxes under the Goods and Service Tax (GST).
Transport services that fall under the category of the following types will attract a GST of 5% :
- Transport of passengers by rail (other than sleeper class)
- Transport of passengers by air in economy class
- Transport of passengers by
- Air-conditioned contract/stage carriage other than motor cabs
- Radio Taxi.
- Transport of passengers, with or without accompanied belongings, by air, embarking from or terminating in a Regional Connectivity Scheme Airport
Transport services that fall under the category of the following types will attract a GST of 12% :
- Transport of passengers by air in other than economy class.
Service Tax Applicable for Tour Operators and Air Travel Agents
All related details under this head are summarised in the following table:
| S. No. | Taxable Service | Abatement
% Age |
Taxable Value | Conditions | Statutory Reference |
| I. Tour Operators | |||||
| a. | Services by a Tour Operator | 40% | 60% | 1. The business has not claimed any CENVAT credit for the input services and capital goods.
2. The issued bill should indicate that it’s inclusive of all required accommodation and transportation charges. |
S. No. 1 of Notification No. 4/2017-Service Tax dated 12th January 2017. |
| II. Air Travel Agents | |||||
| a. | Compounding Scheme | Option to pay service tax at flat rate on ‘basic fare’ @ 0.7 % in case of domestic booking and 1.4% in case of international booking – plus SBC |
NA |
1. No restriction on the availability of CENVAT Credit.
Once this option is exercised, it will apply uniformly in respect of all the bookings of passage for travel by air made during the financial year. |
Notification No. 5/2015 dated 1st March 2015 (applicable)
Union Budget 2016. (applicable from 1st April 2016)
Rule 6(7) of Service Tax Rules amended by Notification No. 5/2015-ST dated 1st March, 2015 |
| b. | Normal Abatement Method | (i) Economy Class: 60%
(ii)Other Than Economy Class: 40% |
40%
60% |
1. No CENVAT Credit has been claimed. | S. No. 11(iii) Notification No. 8/2015 dated 1st March 2015 |
| c. | Transportation of passenger with or without accompanied belongings by air embarking or terminating in a regional connectivity scheme airport | (iii)Transportation of passengers by Air embarking or terminating in a regional connectivity scheme airport. | 10% | 1. No CENVAT Credit has been availed claimed.
|
S. No.1 (a) Notification No. 38/2016-ST dated 30th Aug. 2016 |