Anyone with experience in travel agency/tour group sector?

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March 07, 2025

by a searcher from Babson College - F.W. Olin Graduate School in Tampa, FL, USA

i'm currently analyzing a couple of deals in the niche/luxury travel agency sector and would appreciate the opportunity to speak with anyone who has acquired a travel business. I’m looking to deepen my understanding of key areas:

  1. Opportunities to Scale: The business I’m evaluating does approximately $250K SDE, boasts tons of repeat customers, and primarily generates leads through word-of-mouth referrals. It does not advertise, which on the surface appears to be an opportunity—but I’m curious if this approach is viable within the travel industry.

  2. Roll-up Opportunities: Is there value in rolling up smaller agencies in this space? Would acquiring these businesses essentially be buying a customer base, and what are the long-term benefits or pitfalls of that strategy?

  3. Outsourcing Operations: With four travel advisors currently working in the US, I’m exploring the feasibility of training and offshoring some manual operations to reduce labor costs. Has anyone navigated this transition, and what challenges should I anticipate?

  4. Key Performance Indicators (KPIs): What KPIs should I be requesting and analyzing when evaluating a travel/tour business to ensure sustainable growth and profitability?
    Industry-Specific Considerations: I’ve heard that having relationships with Destination Management Companies (DMCs) and obtaining IATA accreditation are important. Are there any other crucial considerations or certifications that are particularly valuable in the travel and tour industry?
    I’d love to hear your experiences and any advice you might have.

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Reply by a searcher
from The University of Chicago in Chicago, IL, USA
Can't speak to the details here, but travel is a great industry, albeit cyclical. I looked at a corporate event planner, and it was excellent - high repeat, great cash flow. But it was operationally intense (on the road) and all about relationships. Be aware of who holds the relationships and how they will transfer. In your case, it sounds like supplier analysis will be important.
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Reply by a searcher
from INSEAD in Washington, DC, USA
Thanks Luke. Hey Sid - if you drop me a note at redacted I’m happy to get on a call.
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