Economy, Business And Markets

Investment Opportunity: Setting Up a Travel Agency

Investment Opportunity: Setting Up a Travel AgencyInvestment Opportunity: Setting Up a Travel Agency

With the lifting of sanctions imposed on Iran over its nuclear program, the country’s tourism potential has attracted a great deal of attention.

According to a recent article published in the New York Times, tour operators around the world say the demand for travelling to Iran has been so acute that they are racing to add new departures and selling them in record time.

Iran has long been a tourist destination for the Europeans. Iranian officials told AP last fall that about five million foreigners visited the country in 2014 and that it aims to attract 20 million tourists who are estimated to spend $30 billion by 2025.

The growing international interest, coupled with the fact that the Iranian New Year holidays, Norouz (starting March 20)—a time for extensive travelling and sightseeing—is fast approaching, points to the investment potential in the tourism sector, specifically for setting up a travel agency in Iran.

The Persian daily Forsat-e Emrooz recently published an article on setting up a travel agency and the sector’s high investment prospects in the country.

A travel agency is a private retailer or public service that provides travel and tourism-related services to the public on behalf of suppliers such as airlines, car rentals, cruise lines, hotels, railroads and package tours.

In addition to dealing with ordinary tourists, most travel agencies have a separate department devoted to making travel arrangements for business travelers.

There are also travel agencies that serve as general sales agents for foreign travel companies, allowing them to have offices in countries other than where their headquarters are located.

According to Mohammad Hassan Kermani, an expert in the field, the potential of tourism industry, especially for establishing travel agencies, is still highly untapped in Iran.

“There are currently about 4,000 registered travel agencies operating around the country and the demand for receiving permits and setting up new ones is still on the rise,” he said, stressing that “there is still much profit to be made” in the sector.

The main expense in setting up a travel agency is the cost of purchasing a proper office, though newcomers can start by renting a place.

In order to maximize profits, according to the expert, “one must plan ahead for every single day of the year, offer high-quality, low-cost tour packages and also extend the travel agency’s offers beyond the common destinations of Dubai and Turkey.”

Kermani emphasized that in order to survive in this business, one must be able to maintain a profit margin even during the non-peak seasons.

Establishing a “loyal customers club” can be an effective method, says Iman Imani, a tourism veteran.

“Attracting and maintaining the customers’ trust are the foundation of success in the tourism industry,” he said.

Imani proposes that investors should reinvest part of their profit on their regular customers, such as offering them tour packages at a discount on their birthday or wedding anniversary.