The tourism sector is among the largest industries in Kenya together with the financial and agricultural sectors. This has made it an attractive area to invest in for the tour and safari business operators. Stick around if you want to learn how to start and run a tour and safari business in Kenya successfully.
Kenya is among the top tourist destination for both local and international tourists due to its diverse attraction sites. The tourists’ attraction sites range from warm sandy beaches on the coast region to the rich presence of wild animals.
This explains why tourism is big in the country.
Although the tourism industry is large, there is cutthroat competition among the existing tour and safari operators. Hence, you have to offer the best services if you want to profit in this market.
Steps of starting a tour and safari business in Kenya
Step 1: Register your business
Since you will be starting a tour company, you need to register your company with the registrar of companies.
The first step in registering your business is coming up with a strategic business name. A name could determine your success in the market. Hence, the reason why you need to do deep research in this process.
When coming up with the business name, it is important to come up with a name related to the travel industry since it aligns better with your business. Coming up with a name related to your industry gives your business some credibility among potential customers.
Try and come up with 3 potential names for your business. With these names, you can carry out a name search at the Huduma center to find out whether they are available or not. One name search cost 100 shillings.
After finding a suitable name, it will be reserved for you for 1 month after which you should have completed registering your company. Failure to do so makes it possible for other interested parties to use that name.
Registering a company needs a lot of documentation. Hence, it is better to use professional services in coming up with some of these documents such as the Articles of Association. You can get these services from either consultants or lawyers.
Business registration requirements
- Passport-sized photos for all company directors
- ID copies for all company directors
- KRA pin certificates for all company directors
- Original copy of the Articles of Association
- Contact details of the directors for any communication purposes.
- A registration fee of Ksh 10,100
- The original copy of the name reservation letter and the original receipt for the name search payment.
- Duly completed and signed CR1, CR2, and CR8 forms
- Duly completed and signed Statement of Nominal Capital.
The CR1 form indicates whether the company is limited or unlimited. In the case of a limited company, you indicate whether the company is guaranteed by shares or guarantee.
The CR2 form is the model memorandum for a company with share capital
The CR8 form is the notice of residential address of the directors of a company.
Step 2: Get office space
The business requires an official office location where customers and employees can visit and work from.
Ensure to put the offices in a location that is easily accessible, preferably in the urban area. There are various ways to get office space. These include renting, leasing, or building your own.
For rented space, ensure you and your landlord sign a lease agreement. It will be an important document in your license acquisition.
The office should have adequate space to meet your needs. It should also be in a secure area to enhance customer confidence.
Step 3: Source for transportation means
Tour and safari businesses are heavy in transportation. This is because you have to move your customers to the tourist sites. Hence, you need to ensure you have adequate transportation means depending on your needs.
Some of the most common transportation means include vans, buses, and airplanes. They must also be customized to fit the tour needs. However, the choice means will depend on your client’s ability. If you are targeting the low-end market, vans and buses are sufficient.
You can either choose to buy or lease them depending on your financial ability. On average, a good tour van costs an average of 2 -3 million Kenyan shillings. Having these vehicles also means you need to hire drivers as well.
You should target to ensure your customers travel in the most comfortable and safe means possible. This way, you will manage to create a long-term business partnership.
Step 4: Apply for a tour operator license
This step involves an application for a tour operator license from the Tourism Regulatory Authority.
You can access the application forms here, or you can choose to physically visit their offices which are open from 8.00 a.m. to 5.00 p.m. on weekdays.
Some of the documents required during the application process include:
- The tourism application form
- A copy of the insurance cover
- The tour vehicle inspection report or the car hire report
- A copy of a work permit for non-Kenyans or an affidavit for non-resident directors.
- Certificate of incorporation or a certificate of compliance for branches of foreign companies
- Vehicle ownership document in case you own the tour vehicles.
- Summary of staff members
- The lease agreement of business premises or proof of ownership of the business premises.
- A professional certificate for tour operators and evidence of working experience
- A copy of the pilot’s license showing their flying hours and air charter license from the KCAA in case of air charter operators
Upon submission of the necessary documents, you should pay the application fees. The total fees in 9,000 shillings are broken down as below;
- Ksh 1,000 is the processing fee for the license application
- Ksh 8,000 is for the issuance of the tour operator’s license
You should submit the payment receipt with the application forms as proof of compliance. Upon completion, the TRA reviews your application. If successful, you will get the operating license.
Step 5: Develop a business website
Having a website is a key tool for winning in the tour and safari business in Kenya. A website enables you to reach a wide range of potential customers that can’t access your local offices physically. It also appeals to international tourists.
It costs an average of 50,000 shillings to develop a professional website for such as business. This you can engage a professional website builder to do it for you.
You should combine the business social media pages with the website to reach as many customers as possible. Some of the key information to include on your website include tour locations and charges.
A well-developed website ranks highly on Google, thus increasing your chances of securing customers.
Step 6: Define your potential customer base
The tourism industry has 2 main categories of customers. These are both domestic and international customers. Domestic customers are tourists from within the country while international tourists originate from foreign countries.
Understanding your target customer market is key in determining various business aspects such as marketing, payments, and tour planning.
Marketing for international tourists requires a different approach such as doing it online. This is because it is among the best ways to reach them. The international tourists also have their peak season which happens between July and October.
As a new travel agency, you should try to target countries that are rarely targeted by most travel agencies. Most international tourists come from North America and Western Europe. By targeting markets in the Asia region and eastern Europe, you could be tapping into fertile markets.
One of the ways to attract new international tourists is by offering better deals such as discounts.
Another key factor to know about your customers is their budget. This helps you to determine whether you are targeting luxury budget travelers. This information helps you when making planning in areas such as accommodation and travel plans.
The new trend in the domestic tourism market is budget travel. Hence, if you are dealing in this market, this is a factor you should consider.
Step 7: Pre-visit travel destinations
You should ensure to do a pre-visit on all the travel destinations to ensure they are of quality and meet your needs. By doing so you want to ensure customers will get the best value for money through the experience.
The travel destinations should also be accessible and safe. It also helps you with the planning process by understanding some elements such as distance, weather, and costs.
When you pre-visit a site, you also get a chance to visit the nearest hotels within the tourist destination. You can use this chance to negotiate discounted prices for your clients with them.
Step 8: Create attractive price packages
Pricing is a key process in this business. This is because it is among the key things customers will consider in deciding the tour operator to use. The goal is to ensure you offer the best services affordably.
Some of the factors to consider during pricing include operating costs and competitors. You also need to factor in the tourists. Are they budget or luxury? Most tourist locations such as game parks have entrance fees making it necessary to factor this in during your pricing stage.
You should also consider offering discounts and loyalty programs to loyal customers to keep them coming back. The prices should also be readily available on your platforms such as the website to enable customers to make faster decisions.
However, don’t forget that you are in this business to make profits. Hence, ensure the pricing also caters to the profitability elements.
Step 9: Market your business
Marketing is the only way to grow your customers. It helps to create awareness of your products to potential customers.
There are various marketing approaches you can use to do marketing. Some of these include social media marketing. Learn More on How to Succeed in Social Media Marketing.
Another marketing approach common with tour operators is influencer marketing. This involves using famous people in society to market your business.
Some of the factors that determine the marketing choice include the budget and target audience. In the long term, referral marketing becomes key as more people use your services and recommend them to others such as family members and friends.
Step 10: Create partnerships
A partnership is a key strategy to success in this business. This is because there are many stakeholders involved to make it a success. Some of the key partners include hotels, travel agents, and tourism agents.
The more partners you have, the easier it becomes to do business. Hotels help you to get better accommodation rates while travel agents may get you better travel rates.
By doing this, you will become more competitive in the market resulting in more income.
Costs of starting a tour and safari business in Kenya?
This business requires a high amount of capital before it can become competitive and stable. Some of the main costs you will incur in setting up the business include;
- Vehicle purchase or hire
- Business registration
- License application
- Office rent
- Business stationery
- Office furniture
- Business Permit
- Website development
- Branding costs
- Marketing costs
The cost of starting this business could cost an average of 1-5 million shillings. However, it could go lower or higher depending on your ability.
You should also be ready to have extra capital to support the business up to a point when it is profitable. On average, it could take between 6 months to a year before you can have significant customers.
Is the tour and safari business profitable?
Just like all other businesses, there is competition in this business. However, by coming up with a unique business and marketing strategy, you can stand out from the competition.
The peak season of July to October is your best chance to make high-profit margins. In a good year, you can make between 1 million to 4 million during peak travel season, by targeting both local and international tourists.
As a top travel and tour destination in this region, this business remains lucrative due to the demand. However, the number of operators is growing resulting in to increase in competition.
Hence, you need to come up with innovative services and solutions if you want to remain competitive. On the positive side, the returns are lucrative if you get the business right, offer good services, and focus on marketing.
To recap, the steps involved in starting a travel agency in Kenya include:
- Register your company
- Get office space
- Source for transportation means
- Apply for a tour operator license
- Develop a business website
- Define your potential customer base
- Pre-visit tour destinations
- Create attractive price packages
- Market your business
- Create partnerships