How To Start Travel Agency Business in Malaysia 

Travel is everyone’s dream. Often people choose to travel as a short escape from work and life stress. However, not everyone can plan the perfect trip. To avoid regrets and overspending, travel agencies play an important role to provide services. This article cover thing that need to take into consideration, if you planning to start a travel agency business in Malaysia. 

There are 4 sub-sectors categories under tourism and travel related services which are hotels and restaurants, travel agency and tour operator services and other tourism-related services.  

1. Select your niche

Before you proceed for company incorporation, you need to select your business niche. By selecting a business niche can help you to differentiate you and your competitor. As there are many travels agency, it is quite difficult for you to compete with them as you are quite new and just started your business. You will need to determine what segment that have already exist and explore a potential one to become the outstanding one among your competitors. After you have determined your business niche, then you will need to decide what type of services that you want to provide to your customer. For example, due to post pandemic, most of the people decide not to travel oversea and feel uncomfortable to join a big group of the tour group. In this case, you can provide a chartered travel domestically for a small group of people with specific travel itinerary plan that can better cater to a specific consumer such as Agro tourism. Example of Agro tourism such as wildlife study, horseback riding, cooking classes, and wine tasting. By providing a special travel itinerary tend to attract people attention and interest to buy your product and services.


2. Determine your budget and write a business plan

Discover the typical cost considerations in the tour and travel sector. It will not only help you manage your firm more successfully, but it will also pique the curiosity of investors. The following step is to create a budget. Budget is respectively important to determine how much money you need to work with. Determining the costs and budget helps to calculate the cost of developing your product and services as well as developing a market strategy. Finding a business partner to share the costs and risks of the new venture is a fantastic idea. This can mean the difference between success and failure. Furthermore, a company partner with a different background than yours will take the organisation to the next level. For example, if you manage to get a 5-star hotel as partner, you will be able to offer a better package to your clients. After you have determined your budget, it is important for you to write a business plan. A well-thought-out company strategy will direct your steps toward success. It will assist you in meeting both short-term and long-term goals. It is also required when pitching your proposal to potential investors and collaborators.

3. Apply for licenses and permits

Each sub-sector needs to need to apply difference licenses to operate your business. there for it is importance to decide your company niche market and write a business plan. Or else, you will apply for a wrong license that cannot provide your desire product and services. For an example, to operate a travel agency there are difference types of business licensed

i. Tour operating business (Inbound & Outbound)

  • ‘Tour operating business’ means any business of providing all or any of the following services: 

a.  Arranging for sale or commission any transportation, accommodation, tour services or any other incidental services for tourists within or outside Malaysia. 

b. Organising or conducting for sale or commission inbound or outbound tours. 

c. Providing conveyances for hire to tourists. iv) Any other service incidental to any of the activities enumerated above.

ii. Travel agency business (Ticketing)

  • ‘Travel agency business’ (Ticketing) means any business of providing all or any of the following services:
a. Selling, arranging, or making available for commission tickets entitling a person to travel on any conveyance either by land, sea or air.
b. Selling, arranging, or making available for commission accommodation places within Malaysia or outside Malaysia; and
c. any other services incidental to any of the activities enumerated above.

Remark: You need to register your company first before you can apply for the licenses to operate your tourism business.

A company intending to apply for the Tour Operating/Travel Agency Business Licence is required to submit application to the Tourism Licensing Division through Tourism Industry Licensing System (SPIP) at www.spip.gov.my. Further details can be obtained from the MOTAC website at www.motac.gov.my

Applicant must submit required documents as follows:

  • Purchase SSM e-Info through www.spip.gov.my
  • MyKad (Malaysians) / Passport (non-Malaysian) of the Shareholders / Directors
  • Supporting letter on cooperative relationships with overseas travel agencies
  • Draft proposals on tour packages (Inbound & Outbound)
  • Paperwork containing business planning, target number of tourists to Malaysia and short-term revenue for the company which its shareholders are foreign companies.
  • Financial Audited Report (latest) which has been lodged and endorsed by the Companies Commission of Malaysia (for companies that have been licensed by MOTAC but the license has expired / revoked)

Equity Interest Restriction and Guideline

There are certain restriction on equity interest and foreign participation depending on the type of licenses. For example, 100% foreign equity ownership is restricted to Inbound licence only with minimum paid-up capital of RM1,500,000

You may download the Guideline on Equity Interest in Tour Operating and Travel Agency Business in Malaysia

4. Choose your distribution channels and market your tour business

There are several sales channels available to tour companies such as website, office sales, travel agents, hotel concierges, and so on. Balancing your sales channels, both online and offline, direct, and indirect, is the ideal plan for selling your excursions after the cost is shared. Understand your target consumer and be present in the channels they choose. Your website is the cheapest place for online booking, but you must invest in digital promotion. Next is to market your business though all the distribution channels. Marketing is an important aspect of every business. As a new tour operator, you should focus more on digital marketing. Digital marketing has risen in significance, and if you want to thrive, you must learn and master it. The first step is to create a website for your tour company. Hire a search engine optimization (SEO) consultant to increase your chances of getting seen on search engines like Google.

5. Register your business/Company Incorporation

For more details about company incorporation services and company secretarial services, you can contact us here.


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GETTING DOWN TO BUSINESS

If you're looking to form an Sdn. Bhd. in Malaysia, or have any other questions on starting your business, contact the team at Altomate.

We're here to answer any questions, provide resources, and give you the exact answers you need to get your business to the next level. We thank you for reading this article and hope it gave you some new thoughts and business ideas to move forward with.

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