Updated on: Jun 17th, 2022
7 min read
The tourism industry is one of the largest industries in India and a significant employment generator. Many Indian states depend on tourism to generate their primary revenue. India’s tourism industry is ranked 12th among 184 countries in GDP contribution. It is set to grow at 7.8% per year from 2013 to 2023.
The tourism market in India is estimated at USD117.7 billion in 2011, and it is estimated to boom to USD418.9 billion by 2022. Thus, starting a tourism business is a good option for new entrepreneurs in India.
A travel agent can establish a small-scale or large-scale tourism business in India, thus making it one of the best businesses to start. A travel agent can operate various types of tourism businesses based on his/her niche and investments. The types of tourism business in India are as follows:
Millennials are the main target customers of adventure tourism. Adventure tourism is gaining popularity. It has the potential to grow when the travel operator approaches the business with creativity and provides unique adventure sports or activities to the youngsters.
India is a religious country and home to many religious beliefs and rituals. People are looking for tour packages to visit monumental places of worship. The tour and travel business specialising in this field operates following local festivals like the Khumb Mela, Char Dham Yatra, etc.
Due to the modern-day lifestyle, people look for avenues to obtain intermittent resting of body and mind. Wellness tourism is a unique business idea that offers people an array of options for rejuvenation ranging from detox camps to rejuvenating centres.
Rural tourism caters to people who want to experience the beauty of rural areas and be close to nature. The farm and vineyard visits, local cuisine, and activities for creating local crafts like pottery are some of the offerings of the rural tours and travel operators.
Indian and foreign tourists are keen to explore India’s historical monuments and buildings. Since UNESCO recognised many sites as ‘World Heritage Sites’ in India, heritage tourism is booming.
Tour and travel agents should obtain various required licences to start a tourism business in India. The following are the licences required for establishing a tourism business:
Travel agents or entrepreneurs wanting to start a tourism business should establish it as a legal entity by giving it a structure. They can choose from different structures to establish the tours and travel business, such as One Person Company (OPC), Limited Liability Partnership (LLP), private limited company, sole proprietorship or partnership firm.
Most travel agents choose to establish their business as a private limited company since it is one of the most recognised forms of business in India. A Limited Liability Partnership (LLP) or One Person Company (OPC) business structure would be ideal for entrepreneurs who plan to build the business slowly or do it part-time.
However, when entrepreneurs establish the business as a sole proprietorship or partnership firm, their liability is unlimited and can endanger personal assets in case of a financial crisis. Therefore, a public limited company, OPC or LLP, is preferred to establish a tourism business in India.
The tourism business needs to obtain GST registration and collect GST from the customers on the service incurred through the business. The transport and restaurant services provided by tour operators attract GST. Thus, the travel business must mandatorily register under the GST law.
Travel agents and entrepreneurs establishing a tourism business can register as a Government of India approved Travel Agent. Though obtaining this registration is not mandatory, it is beneficial as it provides recognition to travel agents in India. The Ministry of Tourism started a scheme known as ‘Recognition of Tourism Service Providers by the Ministry of Tourism’ to promote the tourism sector in India.
This scheme allows travel agencies, tour operators, and travel agents to operate their business and encourages standard, service and quality in their business. The travel agents or agencies should apply to the Ministry of Tourism to be registered as recognised travel agents.
However, a travel agent should satisfy specific requirements of annual turnover, capital invested, qualification requirements for staff employed, a minimum period of operational experience, maintenance of minimum office space and other stipulations as per the guidelines for the scheme to become a Government of India recognised travel agent.
The International Air Transport Association (IATA) is responsible for the worldwide aviation travel industry, representing around 240 airlines or 84% of total air traffic. IATA offers professional development services and comprehensive training for travel agents. The IATA accreditation is a significant seal of approval recognised worldwide.
Thus, though becoming an IATA agent is not mandatory, it is recommended for a travel agency to obtain an IATA accreditation and enjoy access to a wide range of benefits. The IATA accreditation is vital for a travel firm providing international travel packages as it helps them simplify booking processes and conduct a hassle-free tour.
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