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Travelling is great — but organising travel can be a bit of a pain. Unsurprisingly, many people prefer to turn to travel agencies for help when booking their next getaway.
Travel agencies ensure travellers are well-prepared for their next adventure, not only securing flights and accommodation but also informing them about local customs, practices, cultures, and tips for their destination.
If this sounds like something you’ve always wanted to do, then starting a travel agency might be on your bucket list. Starting a travel agency is a lot like planning your next trip – you need to do your research, be well-prepared, ensure you’re protected, and be ready for anything that comes your way. That’s where we come in – keep scrolling to learn more about how to start your own travel agency.
What Is A Travel And Tour Agency?
Travel agencies act as intermediaries between eager tourists and services like flights, accommodation, transportation, and sometimes dining and activities. Travelling to a foreign destination is exciting, but it’s helpful to go into it well-prepared.
Travel agencies are often a trusted resource, helping people successfully plan their holiday, ensuring every box is checked, and providing them with the knowledge and resources to make the most of their trip. Reputable agencies help travellers avoid scams, unreliable accommodations, and unsafe situations while exploring a new destination.
While travel agencies are sometimes referred to as tour agencies, they should not be confused with tour guide businesses. Tour guides provide travellers with a guided experience of a destination from someone who knows the area well. Although tour guides might make recommendations for restaurants, hotels, or activities, they are not typically involved in booking or securing tickets. If you’re more interested in starting a tour guide business, we’ve covered that topic here.
How To Start A Travel Agency In New Zealand
When starting a travel agency business, it’s important to treat it with the same dedication you would when booking a client’s holiday. This means, conducting thorough research, having a detailed budget and making sure you have a plan in case something goes wrong.
We always recommend creating a business plan – that way, you can keep track of everything. Once you’ve got all your idea’s organised, you can then move on to the first official step: registering your travel agency.
Register Your Travel Agency
To register your travel agency, you need to determine the business structure it will operate under. In New Zealand, the most common business structures are sole trader, partnership, and company. Each has its own implications:
Sole Trader
This structure involves an individual being the sole owner and operator of the travel agency. A sole trader business is personally tied to the business owner, meaning the owner is personally liable for any debts or legal issues the business may face.
Partnership
When two or more people start a business together, it’s known as a partnership. In a partnership, all partners are legally responsible for the business, and this responsibility is usually shared equally. Like a sole trader, partners in a partnership are personally liable for the business’s obligations.
Company
A company is a separate legal entity from its owners. Setting up a company involves a more complex and expensive process compared to other business structures, but it provides greater legal protection. Because the company is independent of its owners, they have limited liability, meaning their personal assets are better protected if the business faces financial or legal issues.
Setting Up Your Business
- Sole Trader or Partnership: Setting up as a sole trader or partnership simply requires registering with the New Zealand Companies Office. If you’re not using your personal name(s) to run the business, you’ll also need to register a business name. These structures are relatively easy to set up, but it’s important to remember that they provide no legal separation between you and the business. This means if the business incurs debts or faces legal trouble, you could be personally liable.
- Company: Setting up a company requires registration with the New Zealand Companies Office. This process involves adhering to the Companies Office’s rules and regulations, and while it can be complex, it offers the benefit of limited liability. With this structure, your personal assets are more protected, as the company is a separate legal entity. If your travel agency is a serious business venture, setting up as a company is often a smart choice to mitigate personal risk.
Get The Right Legal Documents For Your Travel Agency
Starting a travel agency requires having the right legal documents to support and protect your business. Legal documents are one of the most important elements for your business — they can help manage risks, keep you legally compliant, secure partnerships and help communicate expectations.
Here’s a few legal agreements you may want to consider:
Service Agreement: This is a contract between you and your clients determining the scope of your services, payment methods, liabilities, dispute resolution and other important matters.
Privacy Policy: A privacy policy is a legal document for your travel agency’s website, which is legally required if you plan on collecting any type of user information.
Employment Agreement: When hiring employees, it’s necessary to establish the terms of your professional relationship by addressing the duties and obligations of both parties in an employment agreement.
Workplace Policy: Another important document to have when hiring staff, a workplace policy helps regulate the ground rules for working in your travel agency, such as professional conduct and the treatment of clients.
Non-Disclosure Agreement (NDA): To safeguard your travel agency’s confidential information when interacting with third parties, consider getting an NDA drafted.
Protect Your Travel Agency’s Intellectual Property
Intellectual property (IP) is another key consideration when starting your own travel agency. Building a brand and earning the trust of your clients takes time, hard work, and dedication – the last thing you want is someone mimicking or stealing your success. Therefore, it’s important to protect your IP by securing your legal rights.
As IP is broadly defined – it can include anything from a logo you’ve designed to a unique business name or even a travel blog post on your travel agency’s website – there are different ways to secure it. For instance, you can protect your logo or business name by registering it as a Trade Mark with the Intellectual Property Office of New Zealand (IPONZ), or you can include a Copyright Disclaimer on your website to protect original content. The type of IP protection you’ll need depends on your travel agency’s unique needs, so it’s a good idea to consult a legal expert who can guide you through the process.
Can I Start An Online Travel Agency?
If you don’t want to run a traditional brick-and-mortar business, you might consider starting your travel agency as an online business. Operating an online travel agency is perfectly feasible and even offers the benefit of allowing clients to contact you at their convenience, from the comfort of their homes.
Starting an online travel agency involves the same registration process as an in-person travel agency. However, there are a few additional factors you’ll need to account for. Operating online means ensuring that you protect both your business and your clients from the risks associated with online transactions, while also complying with relevant laws.
Make sure to safeguard your clients’ data by implementing strong legal documents and processes, such as a Data Breach Response Plan, a Privacy Policy, and Website Terms and Conditions.
Do Any Other Laws Affect My Travel Agency?
Aside from data and privacy laws, there are several other regulations you’ll need to be mindful of that govern your interactions with consumers as well as how employees are treated within your travel agency. Legal compliance is essential for maintaining positive relationships, fostering a productive workplace, building a strong reputation, and keeping your business out of legal trouble. Therefore, it’s crucial to be aware of all your legal obligations as a travel agency.
A few regulations to look out for include:
- Data and Privacy Law
- New Zealand Consumer Law
- Employment Law
- Industry Regulations
- Intellectual Property Law
- State/Local Laws
Chatting with a legal expert can give you a better idea of the exact laws that apply to your travel agency – feel free to get in touch with ours today.
Key Takeaways
When starting a travel agency, it’s important to be aware of the legal factors that will impact your business. To summarise what we’ve discussed:
- Starting a travel agency requires careful planning, research, and registration, just like booking a holiday for a client
- Choose an appropriate business structure (sole trader, partnership, or company) as each has different legal implications
- Essential legal documents include service agreements, privacy policies, employment contracts, and workplace policies to ensure compliance and manage risks
- Protecting your intellectual property, such as your logo and business name, is critical, and can be done by registering trade marks or including copyright disclaimers
- If you’re operating online, ensure your business complies with data protection laws and has a strong privacy policy, data breach response plan, and website terms and conditions
- Comply with broader legal obligations such as New Zealand Consumer Law, employment law, and local regulations to protect your business and maintain positive relationships
- Consulting a legal expert will help you navigate the specific laws and protections needed for your travel agency
If you would like a consultation on starting a travel agency, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.
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