How to Develop a Tourism Business

Last Updated: November 25, 2022 References Approved

A tourism business is a great way to share your passion with others looking to experience a new location or culture, be it in a business or leisure capacity. To develop a tourism business, you need to first decide on your focus and create a business plan. Afterwards, you can move on to marketing and growing your business.

Part 1

Part 1 of 4:

Selecting Your Businesses Focus

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Choose a geographic location that you know intimately. Creating a business in a geographic location that you know and love means you can use this knowledge to provide a better experience for your customers. Always share this knowledge with your customers and teach them everything you know about the region.^{[1]
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- Don't be afraid to send your customers to other businesses—it shows that you know the area well and are dedicated to ensuring they have the best time possible.
- Use your chosen geographic region to guide your focus. For example, if your location is secluded from the populace and dense with wineries, then guided winery tours, local bed and breakfasts, and airport transportation services are all viable business options.
2
Explore hotels in the area to determine what makes each successful. Ask yourself what makes each one unique in terms of food offerings, nightly rates, and packages. Determine if they have partnerships with local restaurants and businesses. Book a night at the highest-rated and lowest-rated hotels. Take note of what they are doing differently.
- Imagine how your hotel would look and how it would stand out.
- Ask local business owners about their experience in the industry to get a feel for their day-to-day activities and how they succeed.
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3
Research local tourism agencies to find out what activities are available. If you are familiar with the offerings of your town, consider a tourism agency. Ask yourself what your town offers (e.g., ziplining, conservation areas, exotic animals) and how you can bring a unique outlook to each experience so that your company stands out from competitors.
- Book a tour with a local agency and get a feel for what they offer. Take note of their pricing and routes.
4
Taste food from local restaurants to see what they have to offer. Find a cuisine that you are passionate about or one that is underrepresented in your location. For example, if your town doesn't have a good Korean restaurant, consider being the first! If there are any in the area, give them a try. Ask the owners about business without prying too much.
- Compare the busiest restaurants to the slowest. Ask yourself what they are doing differently and how they could improve.
5
List the services offered by the competition. Highlight common services, less frequent services, and those that are completely absent. This will help you decide how to make your business stand out. Be sure to thoroughly research the tourism businesses in your area before you decide which focus is right for you.^{[2]
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- For example, you might find that all hotels offer complimentary breakfast, so be sure to offer this. But if you find that none of them offer complimentary dinner, you can offer this to set yourself apart.
- Pinpoint a tourism sector that is not overly congested, and one that you can contribute something unique to.
6
Focus on a specific niche in your chosen tourism sector. Create a list of the niches that you are interested in. Write down all the experience you have in each niche. Focus on what you can offer to tourists within them, and how you can stand out from other similar businesses.
- For example, if you want to focus on providing tours, decide on a location that you know well in terms of its history, food, and entertainment. If you think hospitality is your calling, decide on the type of foods and beverages that you want to provide to tourists.
- List the contacts that you have within each niche to get a better idea of which one you have the most connections in.

Part 2

Part 2 of 4:

Setting the Foundation for Your Business

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Obtain all applicable licenses and permits. Contact the local government agency and ask which licenses and permits that you require to run a tourism business. Create a list of everything that you need to obtain. The required permits will hinge on the nature of your business, such as providing rental accommodation, travel packages, and transporting customers by water. ^{[3]
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- If you provide tours in natural areas, you will likely need specific permits for each region or park.
2
Apply for the necessary insurance coverage. Contact your country's tourism industry association, your municipality, and a business insurance agent and apply for full coverage. It's especially important to obtain the proper insurance when you are running a travel agency or transportation service.^{[4]
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- Determine if you must carry disability, unemployment, or other types of insurance for your employees.
3
Write a business plan. Your business plan is the blueprint for your tourism business. It should include an executive summary that covers your business' purpose, market sector, competition, and financial projections. For the most part, it should include all the information you have researched up until now.
- Include an outline of the products and/or services your business will be providing for tourists.
- Provide information about your target market and your competition.
- Describe how you plan on running your business and pricing your product or service
4
Calculate the daily and monthly costs of your business. Start by determining how much money you need to spend daily and then move on the monthly costs. Predicting your monthly cash flow is crucial to ensure that you have enough money to keep your business going. Be sure to determine the cost of:^{[5]
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- Marketing
- Insurance
- Employee benefits
- Overhead
5
Procure the necessary funds. Present your business plan to potential lenders and/or business partners to obtain the startup and operating capital you will need to run your business in tourism. Be sure to tell them your plans for the future and why you think your business is needed. Convince them that you are a worthy investment.
- Apply for a small business loan or grant if you find that you're low on funds. Visit Grants.gov (https://www.grants.gov/) for a list of grants available around the world, or visit your bank and inquire about loans.

Part 3

Part 3 of 4:

Marketing Your Tourism Business

1
Connect with the local tourism community through events and meetups. Host networking events and local meetups with other business owners, and be open to referring customers to other businesses. Let business owners know what you have to offer and they will be more likely to send people your way—especially if you do the same for them.^{[6]
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- Run local promotions for your peers and their family and friends.
2
Develop a marketing plan for your business. Set up accounts and pages on free social networking sites. List your business on all applicable online directories and review websites. Differentiate your business from others based on price, promotions, products, and location. For example, offer a lower price point than competitors if customers purchase a yearly pass for your transportation business.
- Take out ad space in newspapers, magazines and lifestyle publications.
- Produce all applicable marketing materials, such as logos, regular newsletters, and business cards.
3
Design a website so clients can discover what you have to offer. If you create your own, use a content management system like WordPress. If you hire a professional, choose someone with experience designing content for tourism businesses.
- Be sure to hire a specialist for search engine optimization (SEO) to maximize your site's online presence.
4
Create relationships with community influencers. The people and events that influence and connect with your customer base are important contacts. If you're in the hospitality industry and a new food festival comes to town, be sure to show up and connect with other businesses. Always do your best to show the community what you're all about!^{[7]
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- Stay connected to local tourism industry councils and relevant media and trade organizations.

Part 4

Part 4 of 4:

Growing Your Business

1
Hire employees to conduct tours and outings. Once you begin drawing in more business, consider hiring some staff. Ask yourself how long you will need them for and in what capacity. Do you need them temporarily for a short busy period? Or a longer period on a part-time basis? Determine how much you're willing to pay and factor it into your costs and projected profits for the coming months.^{[8]
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- Post ads on classified websites. Be sure to indicate the skills and experience you are looking for.
- Select employees that are familiar with your business. Remember that you always want to offer your customers a personalized, engaging experience.
- Plan your staff as far ahead as you possibly can. Be sure to plan extra carefully for busy times of the year.
- To make your business work, you really need to invest in your employees. It starts with the mission, vision, and values of the company and how those are permeated throughout your employees and how you deliver that and how you show up as that.
2
Keep track of your business costs on a daily basis. Record every transaction that you make. Always be aware of how much money is coming in and going out of your business. If you are not making enough profit, consider lowering your price point or cutting down on the stock. If you have a period of high demand, increase your rates. If the demand is low, ask yourself what you can add to your service or product to increase its value.^{[9]
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- Track competitor products, prices, and value regularly.
3
Invest in tour operator software for booking customers. Popular software includes Rezdy, Checkfront, Tour & Activity Booking System, and Starboard Suite. Compare features for available software and don't pay for anything with features that you aren't going to use.^{[10]
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- Create gift cards, promo codes, and vouchers for your customers.
4
Pay attention to customer feedback. Always read customer reviews and take both positive and negative feedback into consideration. Your business is based on making people happy—if there is a complaint you see popping up often, work to change it immediately.^{[11]
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- Make it your primary goal to deliver on your promises and address every customer issue personally.
- Encourage your customers to leave their feedback on social media services.
5
Create a memorable customer service plan. Plan sales and package deals, and create a detailed outline of how you are going to communicate with customers both before and after their experience. If you're offering services that require pre-registration, like zip-line tours or kayaking, send each customer a confirmation message to thank them.^{[12]
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- Always tell your customers about other sights in the area and tourism businesses close to yours that they can experience while in the area.
- Tell your customers about package deals, sales, and discounts.
- Send customers a follow-up email to thank them for choosing your business and make them feel welcome to return at any time!
6
Design package plans for tour outings at various times of the year. Packages are a great incentive for customers. They can include anything from hotel accommodations and meals to discount prices for couples and groups. For example, if you're running guided tours of your town, offer a package that includes a hotel stay, meal, and family discount. Call local business to create partnerships that benefit the both of you. In the previous example, you can ask for a discounted hotel rate to promote a local hotel in your group packages.^{[13]
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- Plan different packages for different times of the year.
- Consider your audience when creating packages. Offer them things that make the experience more enjoyable and convenient.
- Look at packages from competing businesses and try to offer something that they don't.

Community Q&A

Question

Do I need to make a business proposal if I don't require investors?

Community Answer

You don't need to, but you should. A business proposal is part of doing your homework for your business. You'll be more successful with a decent business proposal. There are many free templates online to help you through the process.
Question

If I need to hire people in a target market overseas (for example India) to advertise and be the customer base on my company's behalf, what are the things I need to take into account? Can they be my legal representatives, or do I need to register in the target market also?

Community Answer

You will need to partner with a local representative/native to set up a business in India. He or she will also help with guiding your business through local statutory laws and legal obligations. 100 percent FDI is not yet enforced in countries like India. Of course, many things depend on which sector you are involved with.
Question

What educational qualifications are necessary to start up my own tourism company?

Community Answer

There are no specific qualifications in this sector. However, a foreign language will help you grow your business.