Things An Entrepreneur Ought To Know Before Planning a Travel Based Start-Up

Things An Entrepreneur Ought To Know Before Planning a Travel Based Start-Up

3415 Views
4 Comments

Revenues from online travel booking have grown by over 73% in the last 5 years. Almost 40% of all tour and activity bookings are being made online, out of which, 60% of leisure and 41% of business travelers make their own travel arrangements, generally via Internet.

There are only three types of travelers in the world:

  • Leisure travelers
  • Business travelers
  • Affluent travelers

Leisure travelers prefer to take roughly one holiday trip in about 6 months, Business travelers travel about thrice for work in 6 months, and the Affluent ones(who have a household income of $250k+) take at least one trip for leisure in 6 months.

What do consumers want most while travelling?

The most common things these travelers are willing to spend more on include – Sightseeing (53%), Special dining experiences (41%), Accommodation (41%), Activities (35%), and Shopping (24%), as a treat.

Overall, there are three things that travelers want the most from travel search and shopping platforms:

  • Price transparency
  • Personalized offers
  • Confidence (that what they’re getting is the best for their buck)

Here’s how digital travel planning works for a traveler!

So before travelers begin, they already have some anchor decisions made like, who’s going, where, when and why, brands, budget, preferences, etc…

According to a survey, 34% of the travelers agree that online travel companies have nailed down the basics of search and shopping, while over 53% still believe that it needs to be improved more.

Also View: Online Travel Industry: Growth Stats, Business Ideas & Future Opportunities

Furthermore, they want their travel search and shopping experience to be more centralized (25%), personalized (24%) and comprehensive (23%).

Hence, what they need from the internet (travel website) is to discover options for transportation, lodging and activities within those constraints, and so on. Sadly, not many travel ecommerce solutions have taken these wants of tech-savvy travelers seriously yet.

Ideally it goes like this:

  • They browse the internet several times for the different things with different restrictions, such as “cheap flights on Wednesday”, “hotel options”, and so on…
  • They collect the alternative information, understand the suggestions and rank them (E.g. Taking the road, because they like road trips), and accordingly want to plan the trip
  • Next, they share the plan with other participants to get their opinion and suggestions
  • The process goes on, till they all come down to similar grounds
  • Finally, they book, and go…

The BIG CHALLENGE at hand- Offering Customer Experience To Travelers

Online travel agents (OTA’s) and meta-search sites do a poor job of qualifying hotels, and sites like TripAdvisor and Yelp are not much of help either, for there are dozens of reviews about each place.So, unless the restrictions are exactly defined (e.g. what you want and where you want, etc.), the traveller is forced to do a lot of research on many sites, before coming to a conclusion.

Once, you’re done with the tiring task of research, and are ready with some “maybe’s”, you are hit with another difficulty that, these travel sites/apps are optimized for conversion, not for planning. So tools like “saving for later / sharing / comparing” are basically non-existent, forcing you to turn to Excel / Word / Google Doc, etc. to manage these lists and share over email with your co-travelers.

Planning to fix the travel industry, here’s what you need to know

Various things have led many product entrepreneur’s to conclude that “anything that makes Search, Collection and Sharing better and more effective, is a step in the right direction!

Hence, if you notice, the recent travel start-ups are all about…

  • Great user experience based on smart artificial intelligence that deeply understands your intent (it’s a romantic trip!),
  • Personalized search results (you prefer Marriott!),
  • Addition of social proof (your friend has been there!)
  • Contextual insights (you’re going in July and this is right next to the beach!),
  • Strings them together on a map and automatically plans the best routes and compares prices on a gazillion sites, making you realize that this is better than what you’ve been using so far

……..and so on!

So why is it not working?

Even if we consider that your product, R&D and execution are perfect, and bang on, and you have built the ultimate travel planner / travel content site for a larger mass, but there are many other factors that can lead to your start-ups demise.

Before anything else, the very basic thing is to acquire users!

And guess what — if they’re not planning a trip, they don’t need you! They don’t even acknowledge their existence…

Everyday consumers are bombarded by dozens of new websites / apps / brands. But they filter from what’s more relevant to them. At that point!

Moreover, around 46% of the travelers of a survey said they prefer to stick to only two or three travel websites when purchasing online.

The only way to get your attention is to be in front of you all the time!

(Which means a lot of advertisements. And its costs!)

And social media doesn’t help here either. Research indicates that 50% of travelers don’t prefer to use it for travel search or shopping.

You know, the Priceline Group spends over $2 billion per year on Google Ads alone. Take a guess why?

And yet, no matter how much exposure you get, it will only register in their minds, when the information / product is relevant to them.

Now, let’s assume that all the aforementioned factors fall in place!

Then starts another drill of maintaining the customer, and making sure that they do not leave you in the middle!

From – teaching a brand new (your) way to plan the trip, to getting them to booking…….you need to walk them through a method that is different from anything that they have used, based on trusting you over established brands, before they start finding options for your platform.

And even if you do manage to influence their decision, and got them to book through your site, you will collect an “affiliate commission”

Who pays you the commission?

Mostly, it’s that same OTA you were competing with over the user’s attention (because they hold much more inventory than you and you lease it from them). And obviously, they pay it out of their own commission, which is worth twice as yours.

And it’s not difficult to understand that when time comes to promote the brand, the bigger brand will end up squashing the smaller one!

Hence, competing with your affiliate parent for the same end-user is not a great strategy.Especially, when the user is aware of both!

To Build a Travel Experience Portal: Check Business Analysis & Features Recommended by Experts Click Here

To start a travel business, and offer it long-term stability one ought to work immensely on the pre-planning of their start-up. Besides the business plan, funds and resources, you will require the grit to deal with odds of every changing tastes of tech savvy travelers as well as the abundance of travel tools and applications at hand. The biggest challenge amid this would be to offer the best customer experience.

Discuss more on it with our UX design experts to enact your business plan- Write  your question.

To gather more insights on travel ecommerce, jump to this section.

 

Disclaimer: The Blog has been created with consideration and care. We strive to ensure that all information is as complete, correct, comprehensible, accurate and up-to-date as possible. Despite our continuing efforts, we cannot guarantee that the information made available is complete, correct, accurate or up-to-date. We advise - the readers should not take decisions completely based on the information and views shared by FATbit on its blog, readers should do their own research to further assure themselves before taking any commercial decision. The 3rd party trademarks, logos and screenshots of the websites and mobile applications are property of their respective owners, we are not directly associated with most of them.



Leave a Comment


CAPTCHA Image
Reload Image
Comments (4)
Chirag Dhorda

I am starting a online and offline travel agency and looking for your services. Please revert with details