I'm really hoping that someone can answer a few of my questions regarding the following. I've experienced quite some difficulty in ascertaining stead-fast answers and info from the relevant organisations and most of time only get forwarded a pamplet in pdf, which is usually very generic. Most of my queries are pretty simplistic, but I've frustratedly send countless emails and numerous unsuccessful phonecalls and had limited relevant info returned.
Just to give you the basic outline:
Personally, I would be wary of doing ANYTHING except as a limited liability company...... there are all sorts of risks you are taking - and insurance only goes so far.... hence limited liability companies provide that final protection....
UNLESS of course you are setting up so that the customer contracts directly with your end supplier - and you are just "an affiliate" doing marketing on commission - then you can probably miss all the legal obligations that you outline.
I don't think local travel agents will sell you at all, sadly. Firstly they will struggle to work with you as an individual. Secondly not sure it is the kind of product that they can really sell a lot of - so won't have any time to learn it...... and then they won't be able to pitch it to potential customers as they won't know it..... Marketing is going to be all about the web....
I agree with Alex regarding acting as a sole trader. It is a big risk to operate a business without any limitation to your liability.
Regarding point 1a - As far as I am aware you will only need to have your business registered in the UK for the type of packages you are putting together. However, there are consultants on this forum that will be able to provide you with a more definitive answer.
In relation to points 2 and 3 - you will have to adhere to the 1992 Package Travel Regulations as you are combining accommodation and activity/transport. This means that you need to be able to offer full financial protection to your UK customers protecting them against both the failure of your business as well as the failure of your suppliers.
In this instance, as you are not offering flights you will not be required to be ATOL protected however, you will need to use alternative forms of financial protection to financially protect your customers. Good examples of these are:
As a business we provide financial protection in the form of a client account where the consumer’s money is held in trust until such time as they return from their trip, thus financially securing them against various forms of failure.
Insurance is an option that allows you to pay on a per passenger basis to financially protect your customers.
Bonding is another option that can often be quite expensive for the sort of turnover you are expecting and often quite difficult for new start ups. Again, consultants on this forum will be able to provide you with more information relating to the last 2 options.
Point 4: Whilst pitching to Travel Agents is a good source of business again, I would have to agree with Alex with regards to using the internet to gain the majority of your business. The benefit you will have is that as your product is niche you will be able to appeal to a wide market when looking for your products.
I hope this information proves helpful to you and I am sure other members of this forum will also have some invaluable advice for you.
PTS - Business Development Manager
I can only really advise on point 4. Contact STA travel - they sell many different products from many different tour operators. The STA travel experts share knowledge and if your tours were selling well then I am sure the word would spread.
Hi there to you all,
Thanks so much for all of your advice to date. I've been away for the last week and was could quite so rapidly as I'd of liked to. Every comment is of exceptional value to me and I've decided to alter the formation and direction, going on your advice. These changes have obviously prompted a whole string of questions now, however I'll try not to bombard you.
1. Firstly, are there any highly recommended (good value/affordable) forms of protection for start-ups, that are in thier infancy and have low capital access, but meet the neccessary minimum requirements for the regulations? i.e Name of insurers/trade associations. Regarding trust accounts, on average what does the third party company charge for managing the clients money?
2. Secondly, If I were to regularly source clients (for example gap year students), whilst they were already travelling in the destination country (Sri Lanka), but they are British citizens, would it still be neccessary for me to comply with the package travel regs?
Far more queries to come, yet I'm grossly appreciative of your professional help so far!
1. The Travel Trust Association (TTA) is a trade association that provides trust accounts for its members. This in-turn gives the member full compliance with the Package Travel Regulations, and access to a T-ATOL, to give full compliance with the ATOL Regulations (if the member wishes to build and sell their own tailor-made flight based packages).
TTA membership is a low cost model for new or existing Sole Traders, Partnerships or Limited Companies that gives a business all the tools to trade, including low cost merchant facilities, GDS systems, business insurance, travel insurance, 400 suppliers (accommodation, packages, cruise, flights, etc), and full industry support.
Although TTA members are independent businesses you can join TAPS (central payment system) for free -if you wish- where suppliers are paid for you weekly.
Costs for TTA membership is broken down throughout the year into monthly fees (standard £95 per month) and a £500 yearly fee.
2) TTA members financially protect everything they sell regardless of product, nationality of consumer or cost.
For further information on the TTA please feel free to contact me directly.
1. From what you've said on turnover, I don't think so.
2. No. If you were based in Sri Lanka and targeting gap year students (UK or otherwise) already in Sri Lanka, there's no need for you to comply with European or UK PTR. You will of course need to make sure you comply with any regulations in Sri Lanka in regards to running a business/sole trader and a tourism business. You could use avenues like trip advisor (see other threads for great work Melissa from Thailand is doing) for marketing.
A lot of operators in Sri Lanka also directly market to UK consumers online, even whole packages, using UK websites. As a prime example see the Sri Lanka section of responsibletravel.com You'll have to look through as there is a combination of UK operators on there (with financial protection) but a fair chunk are Sri Lankan operators in which case there is no financial protection (beyond if say they have merchant facilities in which case the consumer could claim on their credit card).
It's not something you have to worry about much as you are planning to operate in Sri Lanka (outside the EU) only.