40 Pros & Cons Of Starting An Online Travel Agency (2024)

Flexibility

You can put as much time into the business as you'd like. If you like the work and have some initial experience, you can start small and manage all aspects of the business on your own.

Rewarding work

Starting a online travel agency can be really rewarding work. After all, you are solving an immediate issue for your customer and you're working on something you truly care about.

Scalable

With businesses and processes changing daily, there will always be demand for new features, products and services for your business. Additionally, there are several different business models and pricing tiers you can implement that will allow you to reach all types of customers.

Traffic to your website

A online travel agency gives people a reason to visit your website and to keep coming back to you!

No overhead costs

To get your online travel agency started, there are no costs associated with overhead, storage, packaging, etc. This will save you a lot of time and money!

Meaningful business connections

You never know who you will meet as a online travel agency. This could be the start of an incredible business opportunity!

High customer retention rates

Once a customer invests in your product, they've invested their time and energy to utilize your product/service which is highly valuable to them. Typically, your product or service becomes indispensable to your customer.

Gain exposure and experience

This career allows you to gain experience working for multiple different businesses - which will benefit your resume and also keep things interesting for you!

Unlimited income potential

With starting an online travel agency there is no cap as to how much income you can make. The stronger your business skills and the more energy/time you put into your career, the more you'll make.

Amazing perks and discounts

Working in the online travel agency comes with its perks! As a seller for these products/services, you typically also get to enjoy industry perks and discounts.

Predictable income stream

Your businesses income stream tends to be predictable based on the number of customers you have signed up. This makes financial planning and outlooks much more seamless!

Higher likelihood of getting referrals

This business is all about referrals, which can be a a very impactful way to attract and retain customers. It's critical that you have a great referral program in place that incentivizes your customers to tell their friends about your product.

Greater Income Potential

With this business, the sky is the limit in regards to your income potential.

You can decide who you work with

Gone are the days of working in a toxic work environment with employees that you may not vibe with. As a small business owner, you get to decide who you work and surround yourself with.

Travel Opportunitites

There are many travel opportunities that come with starting a online travel agency You will need to travel a lot to see and experience some of the destinations you are selling.

You can work from anywhere!

Not only can you start your online travel agency from home, you can also run your business from anywhere in the world. This is the entrepreneur dream.

You establish yourself as an expert

With starting an online travel agency, you establish yourself as an expert in your niche, which builds your credibility. In return, customers are more likely to trust you and refer you to other friends and family.

Can build solid foundation of clients

It's unlikely you will have one-off customers as a online travel agency. Typically, you have a solid foundation of clients that use your product and services regularly.

Make money while you sleep

The advantage of starting a online travel agency is that you have the ability to have passive income and make money while you sleep. This is the dream for many entrepreneurs.

Longer Sales Process

A online travel agency can be a big time and money investment for your customer, so it's important you plan and predict a longer conversion funnel and stay in communication with potential customers.

Security Issues

With any Saas business, data loss and security issues may arise throughout your process of building your product. It's critical that you understand exactly what you're responsible for and how to avoid potential issues down the road.

Low margins

The gross margins for your online travel agency are typically around 20%, which can make it more challenging to incur new expenses and maintain profitability.

Taxes

As a online travel agency, you typically pay self-employment taxes which can be quite high. It's important to understand what you will be paying in taxes each year so you can determine if the work you're taking on is worth it.

Niche Market

A niche business is not necessarily a bad thing, in fact, it can be the key to your success. However, it can be more challenging and time consuming to find the perfect niche market and target audience.

You may need to charge sales tax

If you are selling your products in various states, you may be required to charge sales tax. Although this may not impact your financials specifically, it can be a headache to create a process and procedure for this. To learn more about sales tax, check out this article

Time commitment

With starting an online travel agency, all responsibilities and decisions are in your hands. Although this is not necessarily a negative thing, work life can take over at times. This can place a strain on friends and family and add to the pressure of launching a new business.

Difficult to build trust with your customer

With starting an online travel agency, there can be minimal face-to-face interaction, which means it can be a lot more difficult to establish trust with your customers. You'll need to go the extra mile with your customer to grab their attention and business.

Strict regulations

With any online travel agency, there are strict rules and regulations as it relates to processing your product. You must follow these regulations specifically, or significant legal issues could occur.

Complex development process.

The development process for a online travel agency can be quite complex, which may cause delays and challenges when launching and growing your product.

Complex maintenance

Your online travel agency will require a long-term investment due to the need for updates, bug fixes, and security vulnerabilities. It's important that you (or someone on your team) stays on top of this at all times.

You might struggle financially (at first)!

If you bootstrap your business or choose not to pay yourself (or pay yourself less than you were making at your corporate job), this can be financially taxing. It's important to adjust your lifestyle and set a plan for yourself so you don't find yourself in a stressful situation.

Work is not always glamorous

With starting a online travel agency, you may need to get your hands a little dirty. Although it may seem glamorous from the outside to start this business, the work can require a lot of physical activity and repetition.

Learning Curve

When you start your own business, you no longer have upper management to provide you with a playbook for your roles and responsibilities. You should know the ins and outs of every aspect of your business, as every decision will come down to you.

Easy target for criticism

Since your online travel agency has the ability to reach a large audience, you'll need to be able to handle criticism. The internet can be a cruel place, and regardless of your intentions, many people will disagree with you and even take their criticism too far. To survive in this industry, you'll need to have tough skin (or at least learn this along the way).

The job can be demanding

This is one of the major disadvantages starting a online travel agency. It's important to understand that you may need to make yourself available on a 24/7 basis.

Answering Phones

The online travel agency is still considered a traditional business, which means answering phones is a big part of the job. If you or your team miss phone calls, you could be missing out on potential revenue opportunities. If you are unable to attend to your phone throughout the day, it would be in your best interest to hire a call center or an employee dedicated to this.

Recession-Impacted Industry

When the economy is down, online travel agency's are one of the first things to be cut.

Takes time to see results & make money

Results and revenue do not come overnight with a online travel agency. Often times, it takes weeks, months or even years for your work to monetize.

Technical issues can be frustrating

Technical issues are common in this business. If you struggle with the technical side of things, you may want to consider outsourcing this responsibility to save yourself the time and frustration.

More challenging to earn passive income

It can be more of a challenge to make passive income in this business. Often times, the amount of revenue you bring in is limited by the amount of time you have in the day.