INTRO: Everyone Wants In — But Few Stay In
Destination Management Companies (DMCs) are the sexy side of tourism — exotic places, VIP clients, luxury services. But beneath the Instagrammable surface, this business is a minefield of logistics, legalities, and long-haul learning curves.
I should know. I co-founded Nova Era DMC in Cyprus in 1996, and launched Siesta Travel (later SunCity Travel) in Ukraine back in 1995, serving both inbound and outbound markets. After 25 years of designing experiences and dodging disasters, I shut down operations in 2020 — not for failure, but for reinvention.
If you’re dreaming of starting a DMC, this article is your backstage pass to what nobody tells you.
1. 🧩 It’s Not Just a Tour Company — It’s a Logistics Machine
Running a DMC is like running an orchestra: hotels, transport, guides, meals, entertainment, safety, insurance, payments — all tuned to one seamless performance. Most newcomers drastically underestimate operational complexity.
For example, when we created multi-country tours for SunCity clients, coordinating bus transfers, customs support, and 3-language tour guides across three borders in 10 days became a military-level operation. Add last-minute flight delays, weather surprises, or a missing suitcase, and you’re juggling chaos.
Pro Tip: If your strength is in product design or sales, hire an experienced operations manager before you burn out.
2. ⚖️ The Legal Pitfalls Nobody Warns You About
Most DMC founders skip the legal homework — and pay dearly later.
A few real examples:
In Cyprus, Nova Era had to meet strict licensing criteria from the Tourism Authority — with annual audits and insurance requirements.
In Ukraine, our original Siesta Travel model required both an inbound license and separate accreditation for outbound services, with tax reporting nightmares in between.
EU clients often required GDPR-compliant payment and data handling, even before Ukraine adopted EU-aligned standards.
Common traps:
Operating without correct local licensing.
Hiring freelance guides without contracts or insurance.
Handling client funds through personal accounts.
Don’t improvise. Find a lawyer or consultant familiar with travel regulation in your market — or be ready to become one.
3. 💸 Margins Are Thinner Than You Think
The fantasy: You sell luxury packages for €10,000, take a juicy cut, and sip cocktails by the beach.
The reality:
Hotels want 80% of the pie.
Clients want 15% discounts.
Agents demand commissions.
Your accountant wants to quit.
Your staff wants fair wages (and good for them!).
Margins in DMCs are tight — usually 10–20% at best, unless you own your inventory (villas, buses, etc.).
Solution? Scale smartly and focus on high-value niches (MICE, incentive groups, or themed travel like wine & culture). We used this strategy in Saxony-Anhalt when advising on heritage-led tourism products.
4. 👨💼 It’s All About Trust — Not Just Branding
In tourism, trust beats design. No matter how slick your website is, B2B partners want real proof you can deliver:
Reviews from groups you’ve handled
Recommendations from other agencies
Crisis management stories (yes, they ask!)
A DMC is only as good as its worst day. And trust is earned during those bad days, not sunny ones.
To build that trust:
Publish transparent case studies.
Create a visible team with bios and faces.
Be brutally honest in sales conversations.
5. 📈 The Tech Stack You’ll Regret Skipping
If you’re managing bookings in Excel, just stop. A DMC without proper tools becomes a bottleneck by year two.
Must-haves:
CRM to track leads and conversions
ERP or DMC-specific platform to manage bookings and suppliers
Automation for proposals, invoices, and follow-ups
Not using tech is like organizing a marathon with sticky notes.
6. ✈️ Scaling = Systems, Not More Sales
Most DMCs hit a wall at ~20 groups/year because their systems don’t scale. Growth requires:
SOPs (standard operating procedures)
A trusted operations coordinator
Clear B2B terms
Emergency protocols
Vendor contracts
In SunCity’s peak years, we grew not because we sold more — but because our operations worked while we slept. That takes upfront investment in people, process, and painful detail.
7. 💡 Want to Stay in the Game? Reinvent Constantly
The pandemic killed many DMCs — but not because they were weak. They just weren’t flexible.
You have to evolve:
From package seller → to experience designer
From ground handler → to destination consultant
From agency → to impact partner
That’s why I pivoted after 2020: now I help governments, NGOs, and tourism entrepreneurs build sustainable destination strategies. If your DMC can’t evolve, you’ll either burn out or fade out.
FINAL THOUGHTS: DMCs Need Backbone, Not Just Passion
Starting a DMC is a bold, beautiful thing. But let’s be real — passion isn’t enough. You need:
Legal awareness
Financial discipline
Operational grit
Marketing clarity
And a deep love for solving problems at scale
If you’re ready, go for it. But go in with eyes open.
Need help? Book a strategy call — I’ve helped dozens of tourism startups avoid fatal mistakes and build for the long haul.
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About the Author
Oleksandr Fainin is a Destination Development & Management Consultant with 30+ years of experience in sustainable tourism, post-conflict recovery, and strategic planning. He has worked with USAID, international NGOs, and local governments across Europe, the Caucasus, Central Asia, and the Middle East.
He helps destinations unlock their potential through practical strategies rooted in trust, dignity, and impact.
