Reading time: 4 minutes

An increasing number of Australians are travelling, driving industry demand for tour arrangement services and tourism companies. In 2015, $6.6 billion was generated in revenue from over 4000 businesses. For the overseas traveller, the strength of the Australian dollar will see more Australians continue to travel overseas. Over the next five years, a rise in travel demand will result in more tour arrangement and tourism companies appear, particularly in the online space. Moreover, this growth will continue to rise as a result of increasing discretionary income and availability of information and reviews online. This article will explore the steps involved in setting up a travel agency or tour arrangement company.

1. Choose the Types of Travel Services Offered

The tour arrangement and travel agency industry offer a plethora of services, ranging from booking tours and arranging trips for leisure, to acquiring tickets for business conferences. One of the first steps you should do in setting up your tour agency is choosing what services you will offer.

At a retail level, most travel agency services target travellers going for leisure. Often they act as an intermediary between transport providers, accommodation operators, and the public. As a business owner, you can also choose to accept bookings online. Currently in Australia, 71% of the industry involves leisure travel services.

Other types of travel services include business travel, tour wholesaling and inbound tours. Business travel services involve cater for corporate clients, often with larger and longer-term contracts. These services arrange not only accommodation and transport but also conference planning and leisure services for corporate clients. Tour wholesalers target onselling travel packages to agencies, which deal directly with customers. Meanwhile, inbound tour operators cater for international clients by making bookings and developing itineraries.

2. Choosing Your Business Structure

Over the past five years, the concentration of the tour arrangement and travel agency industry has increased substantially. This increase has been a result of the growth of franchise chains and mergers and acquisitions among the major operators. Small businesses and sole traders often join franchise networks, such as HelloWorld, to gain access to product and booking systems. Many small businesses are sole traders, often franchisees, which take advantage of the low barriers to enter the industry.

If you choose to join a franchise network, it is estimated that franchise fees and licences account for 8.1% of industry revenue in 2015 – 2016. Helloworld and Flight Centre operate large-scale franchise networks, and it is expected their growth will continue. If you are becoming a franchisee, ensure your franchise agreement and disclosure document is reviewed before you sign the dotted line.

3. Drafting Employment Contracts

The travel industry is dominated by small businesses, with more than 90% employing fewer than 20 people. Employment in the travel industry is expected to grow over the next five years as a result of an increasing number of franchise networks and the low barriers to entry into the industry. This growth will take place both online and offline (customer-facing staff). Moreover, as the industry relies on experienced staff to provide services, wage costs are the largest expense.

Employment contracts in this industry commonly have the restraint of trade clauses, as experienced employees often have good knowledge of the industry’s products. Intellectual property created by industry operators are also often protected in employment agreements to ensure employees leaving a company do not take IP assets away (booking processes, copyrighted material, etc.). An employment lawyer will be able to draft an employment contract suitable for your travel agency business.

Key Takeaways

If you are looking to establish a travel agency (online, with a shopfront, or operating as a franchise), it is essential that you decide what services you will offer and the structure in which the business will operate. Employment contracts should be drafted with an employment lawyer familiar with the tour or travel industry. Our team of business lawyers can assist you setting up your travel business and ensure it takes off!


Redundancies and Restructuring: Understanding Your Employer Obligations

Thursday 7 July | 11:00 - 11:45am

If you plan on making a role redundant, it is crucial that you understand your employer obligations. Our free webinar will explain.
Register Now

How to Sponsor Foreign Workers For Your Tech Business

Wednesday 13 July | 11:00 - 11:45am

Need web3 talent for your tech business? Consider sponsoring workers from overseas. Join our free webinar to learn more.
Register Now

Advertising 101: Social Media, Influencers and the Law

Thursday 21 July | 11:00 - 11:45am

Learn how to promote your business on social media without breaking the law. Register for our free webinar today.
Register Now

Structuring for Certainty in Uncertain Times

Tuesday 26 July | 12:00 - 12:45pm

Learn how to structure to weather storm and ensure you can take advantage of the “green shoots” opportunities arising on the other side of a recession.
Register Now

Playing for the Prize: How to Run Trade Promotions

Thursday 28 July | 11:00 - 11:45am

Running a promotion with a prize? Your business has specific trade promotion obligations. Join our free webinar to learn more.
Register Now

Web3 Essentials: Understanding SAFT Agreements

Tuesday 2 August | 11:00 - 11:45am

Learn how SAFT Agreements can help your Web3 business when raising capital. Register today for our free webinar.
Register Now

Understanding Your Annual Franchise Update Obligations

Wednesday 3 August | 11:00 - 11:45am

Franchisors must meet annual reporting obligations each October. Understand your legal requirements by registering for our free webinar today.
Register Now

Legal Essentials for Product Manufacturers

Thursday 11 August | 11:00 - 11:45am

As a product manufacturer, do you know your legal obligations if there is a product recall? Join our free webinar to learn more.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Anthony Lieu
Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards