Popular Business Opportunities in the Tourism Industry

Popular Business Opportunities in the Tourism Industry

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The travel industry has grown exponentially over the past few years. One of the many factors responsible for the growth within this industry is the increase in the purchasing power of consumers. Advancements in technology have proven to be the most important factor that has improved the experience a traveler seeks.

The global economic contribution of the travel industry reached 7.6 trillion US dollars in 2016 and is expected to increase every year. To excel in the travel industry, it is important for entrepreneurs to find relevant online business models and establish it in the preferred area.

In this blog post, we will present different online business ideas for entrepreneurs who want to be a part of the travel industry. Without further ado, let’s jump right in.

Online Hotel, Flight and Rental Car Booking Marketplace

With digitalization taking the center stage, people prefer to go on the internet and search for places they plan to visit. Before traveling, transportation and accommodation are two important elements to consider during the research phase. To help you understand the working of a hotel/flight booking website, look at the following process diagram.

Flowchart-1Click to Enlarge

The model of this business is based on the concept of the marketplace. The hotel lists itself on the booking website. When a customer books a room from the marketplace website, the hotel is notified about the booking and travel website owner or manager deducts an amount as commission.

Current Status

The online travel market has a huge scope for ecommerce marketplaces that offer hotel, flight, and rental car booking functionality. The annual growth rate for the online travel industry is projected to be almost 9 percent in 2019.

Scope/Solution

This industry might be beneficial if you know how to find your target audience and generate leads. Therefore, by choosing this business model, one should consider all the pros and cons before planning their marketing strategy.

If you wish to launch a travel booking website, try to conduct in-depth competitor research to know what your competition provides. Ideally, you should document your requirements based on the functionalities you require. Finally, make sure you understand what the future holds for the travel industry after which you compare and hire a website development partner to create the website as per your requirements.

Run Vacation Rental Booking Marketplace

Booking hotels and cabs cost more money as compared to renting a place. It all started back in 1996 when a couple in Colorado was looking for a way to rent their ski condo and created a website for the same.

In rental booking, property owners list their apartments/condos/flats for rent. Travelers can search for rental places in their desired areas and choose the one that best suits them in terms of size, cost, location, etc. Renting property is advantageous for people traveling with families for a longer duration. To understand the business model better, refer to the diagram below:

Flowchart-2Click to Enlarge

Current status

A year ago, Airbnb launched a new experience service, wherein the host offers a place to stay and also provide access to activities in the locality. The rise of these services bespeaks that customers not only want accommodations but they want a complete experience of vacation. Due to this changing expectation, hosts are coming up with different ideas.

 Airbnb has topped the charts to become a service provider of vacation rental places with 100% positive results. It is among one of the reputed startups in the States with $31 billion dollars. Whereas on VRBO, the gross booking reached $4.16 billion with a 5% increase from last year with promising development.

airbnb

Scope/ Solution

For any new business, a good marketing strategy is needed. As the rental vacation industry has presently shown growth, it will attract a good number of hosts and renters. Therefore you need to be specific and different in your service provision with good SEO services, promotional services, branding, photography and videography to spread awareness.

 Launch Online Travel Discussion Platform

This platform makes it easy for travelers to decide whether they should undertake the trip or not and if yes, what is the best option while traveling. These platforms provide advisory to help people know the best places to travel and notify about nearby tourist places of the destination through user-generated content (UGC). Check the graphic below to get a clearer idea of the business model.

Flowchart-3Click to Enlarge

These platforms provide you detailed information about the places that you must visit in a set time of the year. The websites help you compare fares offered by various hotels and you can opt for the services you want to avail.

Current status

One of the most renowned companies in the online travel discussion platform is TripAdvisor. It suggests the best places to visit with details of hotels and activities in the desired place. The spirit of this business is to meet the customer’s expectations by connecting them to different travel booking websites.

TripAdvisor has gained a reputation because it reduces the work for marketers. Even though being popular, it faced some backlash recently due to fake reviews on their website. Travelers complained about the hotels often shown on the site as 5 stars hotels.

From investing $4 billion to actually gathering revenue worth $4 billion presently, TripAdvisor has shown tremendous growth. Expedia was the parent company of TripAdvisor which then later became an individual firm due to the corporate spin-off.

trip-advisor

Scope

Some rival businesses tend to bring the other one down and it is easier for a site like TripAdvisor to be a target. For such business, you need to keep checking that no false entries are made on your websites. Hence, while creating such websites one should be fully prepared with the upcoming challenges. Here are some of the points that need to be taken care of.

Fraud

Review fraud is a familiar issue that these sorts of platforms face. Buying and selling of reviews have become a common term. Therefore fraud reviews decrease the traffic on the website thus making it less trustworthy. A dedicated team should make sure that such faults do not transpire.

Security

Security is a must for all kinds of businesses. Businesses like these offer deals and people may pay for it online and share their details with the website. Therefore any kind of security breach would bring your business down. The development should be done in such a way that it gives priority to the safety of the customer and their data.

Personalization

Personalization provides a better experience and makes it more appealing to travelers. Changing to a customer-centric strategy leads to a considerable rise in website traffic as well as leads.

Competition

When you have knowledge about your competition you get to plan things beforehand. Developing a strategy for the market is the only way you can deal with the competition.

Season

Season and time of the year are the most important things which have to be taken into account while traveling. People prefer to travel during the months of April-October, Christmas and New year. For this reason, you should be ready for the highs and lows during vacations. A good marketing approach would be to attract people in the off-season through various discounts.

Solution

With all the above points taken into account, the marketing approach should be different for off-season as well as when the demand is quite high.

Online Travel  Adventures Booking Site

The essence of traveling has changed as compared to a few years back. Travelling has not just been restricted to sightseeing, trying different cuisines and discovering museums. People nowadays have a different approach to traveling i.e. they are into experiential traveling, they love to undertake new adventures. With the increasing interest of people in adventures, adventure booking websites are at the peak of the business. Different destinations offer different adventures that people can undertake. Places like Australia and New Zealand offer skydiving, cliff jumping, bungee jumping adventures whereas turkey offers the subtle hot air balloon adventure, Costa Rica offers water rafting and the list is never-ending. When we talk about gaining popularity, 2018 was considered as the year of adventure travel. Therefore adventure booking websites have become immensely popular. A graphical representation of the business model:

Flowchart-4Click to Enlarge

Current status

With the improvement in internet penetration, research for the next travel plan is mostly done online. People discover places, the activities they can perform after which they decide where to go. Therefore, the traffic on the online travel activity booking website is generally quite high. According to the latest research, the stats imply that the adventure tourism compound rate will grow 45.99% by 2020.

Viator was bought by TripAdvisor back in 2014 resulting in more traffic for Viator. Viator has been capable to attract travel agents and travelers and has booked more than 100,000 trips. Get Your Guide has expanded its business by making reputed partners out of which some are Easyjet and KLM Royal Dutch airlines. In 2015, Get Your Guide acquired $50 million in funding with addition to $75 million in 2017.

Scope

The adventure travel trends build a positive outlook of the industry, creating an opening for travel adventure business to outshine in the coming years. The travel activity portal should be social media-friendly as people undertaking adventure activities post their experience on social media. Therefore, leading to word of mouth marketing. According to statistics, the booking will double from $9 billion in 2015 to $21 billion in 2020. Entrepreneurs in this business or planning to open a travel activity marketplace should get ready to make their websites robust and mobile-friendly.

Solution
FunAway

You can hire a team of web designers and developers to build the website or can use an already existing system like FunAway, which is a travel activity marketplace platform that enables the host to connect with travelers and assist them. It provides features like calendar management, easy booking, and more.

Conclusion

The travel industry has grown into being one of the most profitable industries. This has attracted hosts and startups to start their online business. Before starting your travel business, you should have a carefully devised strategy and a set of unique offerings that sets you apart from the competition.

Confused while choosing the best business idea for online travel marketplace

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