Group Travel Home Based Business

Mount Rushmore - Public Domain Photo

A broker is anyone who arranges, buys, sells, or otherwise provides for the needs or wants of the ultimate user. For example, a real estate broker may list a property for sale and then sell the property. This broker sits between the seller and the buyer. A transportation broker arranges for trucks to move material from one place to another - this broker also sits between the manufacturer and the ultimate user. Brokers, then are really middlemen - they provide a service that both the maker and the user of a product or service needs.

Yes, the infamous Middleman can, and should, make a profit - if he or she adds something of value. The value added is that most of the component parts of travel are per-arranged for the client. The tour operator selects the transportation, be it motor coach, airplane, train, boat, or a combination of transportation types. The operator also arranges for lodging, attractions and meals. A tour director is usually send along to make sure that clients receive everything they paid for, to explain and point out sites and to see that everything works well for the clients. The experience of the tour operator coupled with the experience of the tour director assures that a tour will be smooth for the client.

Think of a tour as extended travel with the object being to see and experience an area. Travel, on the other hand, is usually only about moving from one place to another. If you go from Chicago to New York on business, you are traveling. If you go from Chicago to New York and someone has arranged for you to see the sights in New York and has included a tour guide - you are probably on a tour.

A tour broker works with people on a continuous basis. If you are going to get involved in this type of business you should like working with people - you have to be a people person.

Tour brokers originate - they arrange tours, they arrange the transportation, they arrange the lodging, they arrange the meals, and they arrange other services for their clients. A tour broker plans on what kind of tour he/she wants to operate. Next, the tour broker makes arrangements for the various components of the tour - transportation, food, lodging, attractions, etc.

Again, here is my blog about the escorted tour business

Please note that the information provided here only applies to the US, other countries may have different rules

As you are putting your tours together you should ask yourself if the hotel you selected is really a good choice. Is it in a good part of the city, does it have a good restaurant, are the rooms clean, will your clients like the place?


A tour group arriving in Durango, Colorado
[Photo courtesy of Paul Stopnik]

Also, you should take a look at the various attractions and other resources you will be using on your tours.

Now, since you are going to be spending a lot of money with each of these hotels, restaurants and attractions, you will expect them to not charge you when you come to visit. This little item is called a "comp" - short for complimentary, which translates into FREE.

Another feature is the Fam (short for familiarization) tour. On a Fam tour you will be shown an area or event and the sponsors generally will pay for your lodging, meals and take you to attractions. They want your business and are willing to show off (and pay the bills) their area to get your business in the future.

If you have been taught correctly you will know how to get "comp" (short for complimentary or Free) rooms and meals and how to get on Fam tours - or have one arranged just for you. Branson, Missouri offers well developed Fam tours. If you plan on operating Branson tours, the local chamber of commerce will get you on a Fam tour of the Branson area and include shows, lodging, and attractions.

If you will go along with the tour, you should expect to get comps again. How to set it up so that you gets comps is something your mentor should teach you - to find more about my mentoring service

This is a people business. Liking to work with people and liking to solve problems is a prime requirement.

Like a church is a church because someone calls it a church, a tour broker is a tour broker because someone says that they are a tour broker. If you operate a business you need to get a federal tax number - contact the IRS for more information.

Depending on where you are you may need some sort of business license. Call your local county office and ask for the office in charge of business licenses. This should be a easy as all they really want is for you to file some paperwork and pay them a small fee.
If you are going to be making money (and why else get in the business?) you are going to have to get a federal tax number. This number is called a Tax Identification Number (TIN) and is used in business much as your Social Security number is used for benefits.

I have looked at various sites on the Internet purporting to be concerned with how to become a tour operator. Most do not seem to understand what a tour operator is or does. Those which got close to the concept either offer to teach or provided links to sites which may prepare someone to be a tour guide. A tour guide is not a tour operator - at best, a tour guide works for a tour operator.

[ New England fall foliage is nature at its best]
[Public Domain photo]

The difference between a travel agent and a tour broker
Travel agents, by definition, represent other companies. If you purchase an airplane ticket through a travel agent, that agent represents the airline. The same holds true for cruises, hotels, car rentals and other travel purchases. Travel agents usually attend a travel school where they learn how to use the airline's computer system (most airlines all use the same system) to find flights and to reserve seats. They also may learn how to: reserve space on a cruise, reserve a car rental and lodging.

Travel agents, then, sell what other companies offer. Most travel agents receive a small salary and a part of the commission the agency owner gets for what the agent sold.

Tour brokers put the various parts of travel together and sell it as a package. The client of the tour broker doesn't have to arrange transportation or lodging or other parts of their travel depending on the tour - it's all part of a travel package.

Feel free to ask questions by using the Comments Section or send me an email to find out more about this home based travel business

I found that having pictures in your office not only inspires you but they give your clients ideas of what they will see on one of your tours.

The first one is a wonderful picture taken in Zion National Park in Utah. This is a favorite part of the western US to take groups to. Zion is north of the Grand Canyon and it is well worth staying here for a day or two. There are many hiking trails that lead back into secluded canyons.



The Virgin River Flows A Narrow Canyon in Zion National Park
Buy From Art.com

The US government offered huge tracts of land to railroad companies which would build lines in the west. These companies built railroads to many of the US national parks. Here is one in the far north of the US Glacier National Park


Beargrass above Grinnell Lake Buy From Art.com

The Chateau Lake Louise western Canada has this tremendous view of the lake and the glacier feeding the lake. Lake Louise is one of the true gems among resorts in the west. In the latter part of the 19th Century the Canadian government also offered of land to the Canadian Pacific Railway (CP) if they would extend their lines west.The CP did push west and built some amazing hotels in the west to attract vacationers. The Chateau Lake Louise is one of the best examples of their grand hotels.


Mountain Lake with Snow-Capped Mountains - Lake Louise, Canada
Buy From Art.com

If you plan to make a profit you follow this rule - buy low, sell high
It's as simple as that - people tend to make things too difficult. You buy at one price and sell at another price, easy, huh?

[Mesa Verde National Park in Colorado is a favorite for all age groups - Public Domain photo]

The real "trick" to making money in the tour business is to understand that concept of breaking even (BE). The break even point is where you don't lose money and where you don't make money. To help you understand this idea you have to understand that there are two types of costs in most businesses - fixed and variable. A fixed cost is one that will occur whether you have 10 clients or 46. Office rent is a fixed cost. You have to pay the rent whether or not you operate any tours. A variable cost is a cost that is dependent on something else. An example of a variable cost would be the cost an attraction (theme park). If you have 20 clients the total cost of the attraction is dependent (variable) on the number of clients you have.

A well thought out tour, advertised correctly, can bring in thousands in revenue. For example, suppose that you operate a seven day bus tour. The tour sells for $985.00 (per person, double occupancy) and you have 36 people go on your tour. The gross revenue on this tour will be over $35,000.00 and you should be able to retain at least $10,000.00 of that amount.

IS THIS THE SORT OF BUSINESS FOR YOU?
It is possible to may some serious money in this business - you could also lose money. Here are some basic requirements that you should have before starting such a business.

1. You should like working with people


2. You should not panic when things go from good to bad to even worse


3. You should be able to organize things easily


4. You should have at least a working knowledge of certain computer programs - word processing, spreadsheet, e-mail


5. You should have a copy machine and a fax machine


6. You should have at least one telephone


7. You should have at least one fairly up-to-date computer

Fill out the Comments Section or e-mail me to ask any questions

This is really the fun part - you can go anywhere! Successful brokers operate three day tours from Denver into the nearby Rocky Mountains and seven day tours to Branson, Missouri. Brokers on the east coast offer tours into New England and parts of Eastern Canada as well as longer tours into the American southwest.

[Tours to the scenic Oregon coast sell well - Pubic Domain photo]

Brokers in Seattle do a good business operating tours into the Copper Canyon of Mexico. Some brokers offer tours to musical events, art showings, and short trips to New York City for Christmas shopping. New England fall foliage tours are among the most popular year-after-year.

Where to go is up to you as long as you keep it reasonable. Going to Iraq now may not be the best choice but there is a company in the UK offering and operating tours into Iraq - make sure that your clients sign many disclosures stating that you are not at fault in case of their death. Given the current state of the economy it may be wise to limit your offerings to North America but tours to Costa Rica seem to sell very well.

To move forward into this unique business I suggest that you buy some of books noted in this article. In addition, I offer to mentor aspiring tour brokers for a moderate rate. Contact me to learn about this home based travel business

In most business settings there is a potential for losing money. If, for example, you buy 24 cases of eggs and they don't sell fast enough, you will lose the cost of the eggs. The same is true for most merchandise that you buy. Some merchandise has a long shelf life - rugs, for example, may sit in a store for years before they sell. When these rugs do sell you may have recovered your initial investment but you cannot really recover the lost opportunities you missed because your money was tied up in rugs. This case is not true with travel. You plan and arrange a tour and then you invest some money in advertising. If the tour does not sell in a couple of months, you refund those deposits you have already collected and cancel the tour. The most you are losing is the cost of the advertising and the effort of putting the tour together. In short, you really do not have an inventory to worry about - no eggs that will go bad in a number of days.

The essential part of this whole business is selling. If you think that you may want to try to get in this business but are not really sure, why not try to sell some seats on an arranged tour? Everyone knows someone who wants to travel. You start with your relatives; mother, father, uncle, aunt, cousins. Next you talk to close friends, people who you have known for some time. They may be people you work with, people who go to the same church, people who are in the same social clubs that you are in. Moving out from these groups, you ask your relatives, friends, co-workers, and fellow members for referrals.

Some tour brokers are willing to pay you when you bring in sales. Even if you only sell one seat you should make good money. The normal commission that tour brokers pay is 10%. That means that selling one seat a tour selling for $1,100.00 is worth $110.00 to you. One sale is not normal. Almost always two people will travel together on a tour. Sell one seat and your client will sell the other one - husband, wife or friend. So, you end up selling two seats and get a commission of $220.00. Now take this a step further. What happens when you sell 10 seats? $1,100.00. Not bad pay for a very part-time job. If you contact a group and sell 40 seats you make quite a bit more - $4,400.00. During the time you are selling, you are learning more and more about tours - what is included, how they are timed, what is included, which ones sell the best and on and on.

To find find out more about this aspect of the tour business, contact me.