The travel vertical is one of the largest consumer industries in existence. The online landscape is comprised of multiple niches – some large, some small. Social. Hotel search. Flight search. Metasearch. Hostel bookings. Group tours. Vacation rentals. Deals. Destination services. Walking tours. Car rentals. Inspiration.
And finally, travel planning. An opportunity many entrepreneurs continually tackle, as its a pain point for every single traveler that is still largely unsolved in the minds of most. That said, there are certainly reasons for that.
With so much money at stake, it’s no surprise there are many players trying to capture a piece of the pie, TripAdvisor being by far the largest. Other established players include Lonely Planet, Rick Steve’s, and Frommer’s. Vamo (well funded but not yet launched). Think Places. Plansify. Outtrippin. Inside.co. Hopper started in this camp, but pivoted to flights. The list goes on and on. I’ve even tried my hand at it, having spent a Startup Weekend on a travel planning concept in 2012 and built Welcome Kits (cliff notes version of TripAdvisor) in 2013. Y Combinator partner Garry Tan has called travel planning software the most common bad startup idea.
What are the challenges for travel planning startups?
- Diversity of destinations. Thousands and thousands of destinations to cover to deliver a comprehensive product offering.
- Original, high quality content creation is extremely expensive.
- Infrequency of travel. Everyone in the travel industry knows the average traveler only travels 2-3 times per year. Thus, even if they use your service for one trip — they are likely to forget about it prior to their next trip.
- Language differences – not everyone visiting Rome speaks Italian. Not everyone visiting Beijing speaks Mandarin. And no, not everyone in the world speaks English.
- Trust. Information overload is everywhere you look, meaning trust is critical. Information that is not trusted, is instantly discarded.
- Travel planning is fun. Seriously. Many LOVE travel planning (I’m not one of them), and it’s NOT a pain point they want addressed.
- Monetization. There is no shortage of consumer attention for researching destinations, but that is a fundamentally different mindset than booking. Booking is where actual revenue is made.
TripAdvisor is really the only technology company that has ever hit a home run in travel planning. Every other successful company in consumer travel has made a business out of capturing some segment of hotel or airfare bookings, and even TripAdvisor moved into hotel metasearch in a big way.
How, and why did TripAdvisor succeed?
- They were extremely early to the user generated content game. The first movers in UGC plays had a huge leg up, and are hard to overcome once they have an early mass of content.
- Most travelers want reviews of hotels prior to booking, and don’t have existing friends who have visited all of them to ask about their experience. TripAdvisor expands their travel knowledge network substantially.
Before embarking on your own travel planning startup, ask yourself these questions:
- Where is your data sourced from? If consumers, what incentives do they have? If original content, how are you going to pay for it?
- What is your unique differentiator?
- WHY would travelers use your site to browse things to do, unique hotels, travel photos, blogs, etc — and ALSO use your site to book their trip?
- Is your solution 10x as good as TripAdvisor?
Drew Meyers is the co-founder of Horizon. Global nomad originating in Seattle. Ex-Zillow community builder. Social Entrepreneur. Microfinance advocate. Travel addict. Find him on Twitter @drewmeyers.