How to start a tour business
Seven legal essentials
Are you thinking about setting up as a tour operator or
starting a tour business in Australia?
There’s a world of opportunity for you to organise safaris
in Africa, treks in Nepal, meditation and yoga retreats in
Bali and in India; and in Australia, tours of the outback
and National Parks, bicycle and motor bike tours along the
Make sure you follow the seven legal essentials:
#1 Business Structure
Individual name or company?
You can operate in your
personal name as a sole trader or you can form a company and
operate in a company name. The risk you take in operating in
your personal name is that if anything goes wrong on the
tour you are personally liable.
That is why most people set up a company and put the risk
of anything going wrong on the tour in the company.
Companies cost money to set up and cost money to run but on
balance it’s money well spent because tours are full of
And there are Australian Business registration
requirements such as obtaining an Australian Business Number
(an ABN) and a possible GST registration. Before you
register, you need to choose a business entity such as a
sole trader, a company or a company/trust. Then register a
business name to trade under, and register it as your domain
Do you need a licence?
Licensing for travel agents and tour operators was
abolished in Australia on 30 June 2014.
The purpose of the licensing scheme was to operate a
Travel Compensation Fund to compensate the public if their
travel agent or tour operator misappropriated their travel
payments or became bankrupt. Now, travellers need to rely
upon their travel insurance to protect against defaults and
bankruptcy of travel agents, tour operators and suppliers.
That means no Australian licence is required for Travel
Agents to book travel or tours for Australians travelling
overseas. Of course, IATA accreditation is needed for
booking airfares. No Australian licence is required for
Outbound Tour Operators to arrange tours for Australians
Inbound Tour Operators require licences to conduct some
activities in Australia.
There are Tour Operators Licences for tour operators in
Victoria, South Australia and Queensland where the tour
operator desires to conduct an organised tour or
recreational activity for profit on public land (national
parks, nature reserves, marine areas). The 'activity' can be
bush-walking, trail bike touring, horse riding, canoeing,
rock climbing, river rafting and abseiling.
In Tasmania, it is called a Commercial Visitors Service
Activity Licence. In Western Australia there is a Fishing
Tour Operator's Licence.
In NSW, there is no Tour Operators Licence - but a permit
is still required to use public land for a tour for profit.
It is usually a licence requirement to be a member of a
trade association. Trade Association membership confers ATAS
It is also usually a licence requirement to hold
Professional Indemnity and Public Liability Insurance of at
least $10 million.
#3 Business Insurance and Travel Insurance
There are 2 types of insurance:
Business insurance (Professional Indemnity
Insurance) which a business takes out against claims by
travellers for breach of the duty of care, including
public liability cover for injury and death. The
coverage for most business insurance is quite limited,
but then the premiums are not high. If you are serious,
take out business insurance.
Travel insurance which travellers take out.
It is essential that everybody you take on the tour must
have comprehensive travel insurance which applies to the
country or region the tour takes place. This means
coverage for cancellations, delays, loss or damage to
baggage or personal possessions and unlimited medical,
hospital and repatriation expenses. The medical and
hospital insurance is the most important because the
bill could be very high: if you are in hospital for 7
days in Hawaii, the bill could be $80,000.
Travel insurance will cover the tour operator against
claims by the traveller for loss and damage to baggage,
injuries and so forth, provided the tour operator is not
at fault. Be careful of the common travel insurance
policy exclusions for activities such as cycling, riding
motor bikes over 125cc, skiing, under the influence of
alcohol, etc. And don’t travel to places where the
Australian Government warns “Reconsider your need to
travel” or “do not travel” because that is another
travel insurance exclusion.
#4 Passports and Visas
You must have a valid Australia passport when you’re
travelling overseas. When I say valid, I mean it must have
at least 6 months validity from the due date of return to
Australia. Check the currency of the passports of your tour
You must have a visa, which is the right to enter a
specific country, to enter most countries around the world.
Visa requirements vary.
There are some countries in Europe, such as Spain, Italy,
France and Germany (the Schengen zone) where you do not need
a visa to enter, provided you are travelling on an
Australian passport and you stay for no longer than 90 days.
So if your tour is a cycling tour in Spain or in Italy, the
tour group just goes to the entry gate at the airport,
presents their Australian passport, and are admitted for 90
days as a tourist.
There are countries such as the USA and Canada where you
need to have a visa waiver (an ESTA or eTA) before you go.
And yet other countries such as India and China, which
require a formal visa to be issued by the embassy or
consulate of that country before you go. The Australian
Government website smartraveller.gov.au has a comprehensive
guide to visa requirements.
If you don’t have a visa when you’re boarding a flight to
a country which requires a visa, you will be denied boarding
at the airport. You’ll lose your flight. Visas are not
things that can be obtained in an hour or two: sometimes
they take up to a week..
#5 Booking Forms and Terms and Conditions
How do you protect against traveller claims?
Everybody going on your tour must sign a booking form. The
booking form will have questions in it such as: Do you have
medical ailments? Do you have allergies? Do you have a valid
passport? At the end there will be a place to sign and the
words “I have read, understood and agree to the terms and
The terms and conditions (T&Cs) are there to protect you,
the tour operator. They restrict the traveller’s right to
claim compensation for a whole list of things such as
delays, change of itinerary, cancellations. Most
importantly, the T&Cs limit or exclude your liability for
injury or death on the tour. They give you the right to
alter the itinerary or cancel the tour, charge cancellation
fees if a traveller cancels, and to vary the price.
Activities such as trekking, white-water rafting, mountain
climbing, hot-air ballooning, skiing and scuba diving need
additional T& Cs because they are ‘dangerous recreational
Terms and Conditions are something I can help you with as a
#6 Consumer Law Compliance
Consumers have many rights in Australia. You must not
mislead consumers when you are giving your itinerary or when
you are putting prices, photos and descriptions on your
website. Inclusions and exclusions need to be accurately
described. Because if your descriptions are not accurate,
the consumer has the right to claim a refund and other
As Travel Lawyer, I will vet your website for Australian
Consumer Law compliance.
#7 Business Name Protection
You have come up with this brilliant business name, which
nobody else uses. If you don’t take steps to protect your
business name, someone else could start using it. So when
you come up with your brilliant business name, you check the
register to see that nobody else has come up with it and
then you register it as a business name. Once you register
it as a business name you register it as a Domain name for
your website, and then if you have a cute logo you register
it as a trade mark.
To summarise: to fully protect your business name, you
register it as a business name, you register it as a domain
name and you register it as a trade mark.
As a Travel Lawyer, I can help you with trade mark
So there you have it. The seven essentials for setting up a
business of Tour Operator in Australia. Go out there and do
Four legal essentials for Tour Operators when organising
tours, as I explain in this 2 minute video:
#1 Get your product quality right for your clients
#2 Hire a good lawyer for your ground operator and
#3 Take care with supplier contracts
#4 Insurance – professional indemnity & travel insurance