Travel Agency

How Profitable Is A Travel Agency? (Updated for 2024)

Pat Walls

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Updated: October 9th, 2024

How Profitable Is A Travel Agency? (Updated for 2024)

So you want to start a travel agency?

And the first question that came to your mind was, “well, are travel agencies actually profitable?”

With a market size of $540B - there’s plenty of business to go around.

Especially considering:

You could start a travel agency with as low as $100
Based on our data, travel agencies generate an average of $2.09M per year
You could see gross margins as high as 30% with travel agencies

There’s money to be made. Don’t worry.

But, I don't want to spoil it all. Below we’ll cover everything you need to know when it comes to the profitability of a travel agency.

Let’s dive in!

Is a travel agency profitable?

Yes, a travel agency is generally a profitable business. However, you still need to consider several factors since these things always impact the overall outcome.

For instance, since average revenue is $2.09M per year with an estimated gross margin of 90%, you could expect to recover your investment within 7 months or even less.

But of course, it all comes down to how much you earn compared to the potential revenues of your travel agency.

To determine whether your business is profitable, you should earn more than your expenses in the beginning months. However, while you're in your first month, it can be challenging to know what to expect.

Therefore, you should maintain a record of your monthly expenses and income to determine whether you're meeting your goals. By doing this step, you can see how your travel agency is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is a travel agency worth it?

If you’re wondering if a travel agency is worth it, the answer is a big YES. With travel agencies, you have the potential to earn $2.09M per year (this is based on data reported by real founders).

Further, you could have your initial investment back within months. Simply put, it’s a business worth a shot, especially if you have the resources and make the necessary efforts to achieve or surpass the target.

With a market size of $540B, it will be possible for you to build something that grows and turns into a flourishing business. As such, it’s the type of business you might want to consider starting.

Of course, you must learn and understand every aspect of running a travel agency to ensure success. Still, as long as you have the initial investment and can endure a few months before your actual gains, this business could be worth it.

You might want to consider reading more specifics about successful travel agencies case studies.

Examples Of Profitable Travel Agencies

Here are a few examples of profitable travel agencies, and a few more details about them:

1. Luxpitality ($4.92M/year)

Patrick Burkhardt and Rigel Bitterman, co-founders of Luxpitality, came up with the idea for their business while working in the hospitality industry. They saw a shift in the market with new-age clients looking for more localized and authentic experiences, and decided to focus on connecting these clients with independent boutique hotels. Since their launch in 2015, they have grown their hotel portfolio to over 650 hotels worldwide and have become one of the top 5 representation companies in the US.

Is it profitable? Yes
How much money it makes: $4.92M/year

How We Built A Million Dollar Business That Connects Companies With The Perfect Hotels

Luxpitality co-founders discuss how they grew their business to over 650 hotels around the world, generating $410,000 in monthly revenue by assisting new-age companies to set the perfect stage for their meetings.

Read this case study

Read by 7,539 founders

2. Solo Female Travelers ($1.8M/year)

Mar Pages, along with her business partner Meg, grew Solo Female Travelers from a small Facebook group in 2015 into a million-euro travel platform by 2023. Despite launching their tours amidst the pandemic, their emphasis on women-led, women-focused travel resonated deeply, propelling them to 300 guests across 14 destinations with unwavering organic growth.

Is it profitable? Yes
What's the gross margin? 30%
How much money it makes: $1.8M/year
How much did it cost to start: $100K

How We Launched a Women-Led Travel Company in the Middle of the Pandemic

"Read how Solo Female Travelers, a women-led tour company, grossed just over 1 million EUR in revenues in 2023 by offering tours in 14 destinations, empowering women through travel and contributing to more equitable tourism industries."

Read this case study

Read by 4,765 founders

Learn more about starting a travel agency:

Where to start?

-> Travel agency plan
-> How to finance a travel agency?
-> How much does it cost to start a travel agency?
-> Pros and cons of a travel agency

Need inspiration?

-> Other travel agency success stories
-> Marketing ideas for a travel agency
-> Travel agency slogans
-> Travel agency names
-> Travel agency Instagram bios

Other resources

-> Travel agency tips

How much can you make with a travel agency?

With a travel agency, you can make an average of $2.09M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $100. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 7 months.

How much does a travel agency make a week?

Based on our data, average weekly revenue for a travel agency ranges around $43.6K. As such, you could see monthly revenues of $174K.

To know if your travel agency achieves the weekly profit target, you need to keep track of the total earnings you get per day. Afterward, you'll want to consider subtracting the expenses you have daily.

Learning your weekly profit can also show whether you're hitting your target goal for your travel agency.

How much do travel agencies owners make?

The income of a travel agency owner can vary depending on various factors such as location, size, competition, and the owner's business skills.

But to give you some idea, the weekly revenue of an established travel agency is about $43.6K. But this can be lower or higher depending on so many factors - it's almost impossible to say exactly.

While the potential for earning a good income as a travel agency owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Travel Agency Profit Margins

Generally speaking, a travel agency can expect profit margin of around 90%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of a travel agency, profit margins can vary depending on various factors, such as the type and quality of products sold, the size of the store, and the level of competition in the area.

However, these figures can vary depending on the pricing strategy, inventory management, and overall efficiency of the business. To maintain healthy profit margins, travel agency owners must focus on managing costs, negotiating favorable supplier terms, and providing high-quality products and services to attract and retain customers. By doing so, travel agency owners can ensure long-term sustainability and profitability for their business.

Travel agency owner salary

The salary of a travel agency owner is an unpredictable figure. It's significantly influenced by numerous factors, including the store's location, its size, and the degree of competition. An owner of a well-established travel agency, in a prime position, might see an average weekly salary around the ballpark of $39.3K.

But it's worth noting, such numbers aren't always consistent. The earnings can vary wildly, potentially swinging by as much as 80% either way.

Achieving consistent success and maintaining a reliable income stream in this industry requires a deep commitment. It's imperative to offer high-quality products, deliver impeccable customer service, and nurture a trusted bond with the community you serve.

Conclusion

In a nutshell, based on many of our examples, a travel agency may be a promising business to start - but the success of your travel agency mostly depends on your effort and your approach.

If you focus on these, you'll have a much higher chance of a profitable travel agency.

Part of

Starting A Travel Agency: Everything You Need To Know

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