Travel agency regulations: what licenses and law do you need to know about?
Startups takes a look at travel agent regulations and how to register as a travel agent
Important things to understand when starting a travel agency are:
Rules and regulations of running a travel business
You don’t need any qualifications to set up as a travel agent, so in effect anyone could do it – although it will greatly increase your chances of success if you join a trade association. That is, customers and industry are unlikely to take you seriously without.
The most widely recognised trade association is the Association of British Travel Agents (ABTA) although this is also the most expensive and therefore aimed less at start-ups than the Travel Trust Association (TTA) or the Global Travel Group.
“I joined ABTA from the beginning,” says Martin Jones of Freedom Direct, a call centre based travel agency. “It has a regularly updated code of conduct and keeps me up to date with changing regulations and generally gives both my customers and me protection (insurance cover if the holiday falls through).”
You are required by law to provide a bond to reimburse clients if your company should fail financially, this is arranged with a bank or insurance company. Also, you have to have Air Travel Organisers Licensing (ATOL) which allows you to sell airline tickets. Without it you would be confined to providing accommodation and ground transport only.
Global Travel Group is a franchised operation so it holds bonds and ATOL centrally, whereas ABTA requires that you have a certain amount of capital to hold them yourself. The latter is more expensive, although it allows you to be more independent.
It may be worth considering seeing if you can get a Start Up Loan (external partner site, link opens in a new tab) to help you with financing, and mentoring to start this business idea. You'll also need to think about registering your business, either as a sole trader or as a company - if a company, then Smarta Formations (external partner site, link opens in a new tab) are an organisation that can help you set up.
Membership of a trade association tells suppliers that you have a strong and supported business and customers will be reassured knowing their money is protected.