Isn’t online travel “done”? Why is there an explosion of new travel start-ups?
Question: Why the new interest in online travel? Isn’t online travel “done”?
Based on the number of analyst and due diligence calls I received recently, it looks like there are a number of new travel sites looking to help consumers research and plan their trips. Is this the sign of a Web 2.0 Bubble in Travel?
My Answer: Yes and No. Online travel is only partially “done.”
After all, travel is the biggest e-commerce category at $91B. But, growth rates are slowing and price shopping and online bookings are increasingly concentrated at a few sites. Travel is partially “done” – for consumers who know what they want to book. There is little need for another travel offering of this type. The world doesn’t need another Expedia or Orbitz.
However, there remains a huge unaddressed consumer need–helping consumers decide what to book.
There is an increase in awareness of this unaddressed consumer need. When I ran Yahoo! Travel I saw clearly what consumers were searching for: information like things to do, places to stay, consumer advice, photos, locations, maps etc. Consumers have a lot of needs that are not being served by online travel agencies like Expedia or Travelocity. The “first click” doesn’t start at Expedia…it starts at Web search.
Want to address this need? Make sure you meet these three criteria.
Based on our travel experience and consumer research, we believe three key criteria need to be met to address this “what to book” problem:
1. Offer comprehensive information - offer one stop shopping of places to stay, things to do and detailed information (e.g. descriptions, photos, maps, location, reviews, etc.) Consumers should not have to sift through multiple sites to find relevant bits of information on possible places to stay and things to do.
2. Provide filters and personalization – enable consumers to search based on who they are traveling with and why they are traveling and don’t assume they already know where and when they want to go. Give them the filters they need to get relevant results.
3. Make word of mouth easily available – people prefer information & feedback from other people (reviews, blogs, ratings, etc.) Unfortunately, most sites that have reviews, blogs etc. still force their visitors to browse to find the most relevant feedback and do not yet analyze that word of mouth to make specific recommendations.
The travel site that meets these three criteria will become the “first click.” Why? Because once these three criteria are met the “what to book” decision can be made easily and travel planning can be a more enjoyable and efficient experience. It is quite simple for a consumer to then move into the booking & price comparing phase of trip planning.
That’s how we think about it. How about you?
OK, so we put our cards on the table. What are other innovators in travel thinking? What problem are they trying to solve? What opportunity is there to go after where “travel” is not done? Is there solid consumer need out there (and for what) or is everything getting just a bit too frothy for your taste?
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7 Responses
Hi Yen, Elliott & Company. Great to see all the progress on uptake! I agree that there’s definitely a need for a service that helps people decide where to go, and what to enjoy, based on who they are and what they seek.
Here in Seattle, at Escapia.com, we too agree that online travel is far from “done”, and have more of a vertical-focus-take on it.
As you know, in a nutshell, we’re working on the “last mile” problem in the $20 billion (US-only) segment of vacation rentals.
It amazes me that here we are, more than a decade after the Internet boom of the mid-90’s, and it’s still too darned hard to find a good vacation rental and book it online. Why? Because it’s a highly fragmented industry, and (until Escapia came along) managed via systems largely disconnected from the web.
It won’t be too long before you’ll be going to Google and typing “Maui condo for rent”, and Google will ask you “When do you want to go”, “what amenities do you want”, and “how much do you want to spend?”. But where do the answers come from once the user inputs their preferences?
In the hotel and airline world, it’s easy; the plumbing is already there to answer the question. Expedia initially built on top of Worldspan, and Travelocity/Preview Travel initially built on top of Sabre and manual back-ends. Orbitz followed by building on top of ITA software and various GDS connections, as well as the many property-management systems, and Pegasus in the hotel world.
But what about vacation rentals?
Expedia, Orbitz, Travelocity and Priceline all take advantage of electronic connections to the property management systems and GDS’s that make airlines and hotels relatively easy to book (electronically). Yet ski homes in Colorado, beachfront homes in Maui, or condos in Hilton Head SC are most likely managed by a vacation rental property manager, disconnected from the web. At Escapia, we’ve spent 3+ years building out the leading web-based reservation system for property managers; 15,000 homes/condos are now managed using this software. And earlier this year, we went live with a way for consumers to book this inventory. And there’s much more being done here to bring yield management and distressed inventory-pricing to market.
We think there’s a tremendous opportunity here — because vacation rentals are (for families, especially) a much better value, and inventory is now quite plentiful. We believe the company that can bring vacation rentals online, and create an end-to-end reservation network for them, will be tapping into a pretty tremendous opportunity.
Bonjour Yen,
Perhaps an opinion which is not completely stupid. I give you my 2 cents
All travel review aggregator or travel aggregator are only focus on the web service and content aggregation.
They miss at the end we are human and want to talk to each other with our voice and are going on vacation to discover countries and peoples in real life.
Maybe a smart voice help services connected with a smart CRM connected to your Kango services could better help consumer and give a competitive advantage to Kango.
People are not only digital data, keep a human side to your Kango services.
Best regards from sunny Marseille.
Claude
Steve, glad to meet you – I did not know about Escapia. I have used VRBO for my last several vacations, because I agree with you, staying in a vacation home is much more comfortable for my family of 4. The extra space, the opportunity to feel as though we are not just visitors on the outside, are all important parts of our experience.
And Claude, I agree with you too, personal opinions about destinations are important. I spend tons of time online researching our trips before we go, to make sure I am maximizing our experience and resources. I look forward to a time when I don’t have to triangulate between sites, working out which hotel will be best for my kids, offering the right location and right price.
These are all things that make me excited about UpTake. By the time I get on a plane to go somewhere with my family, I am exhausted from the trip research and preparation. If I can harness the “power of the internet” to make even part of this process easier, I would be one happy camper.
I think your tri-partite analysis of travel needs hits the nail on the head, and in fact covers the points raised by both Steve and Claude.
Vacation rentals are important to many travelers; and as such, they fall under the “comprehensive information category.” Currently, the vacation rental industry — while large — is very fragmented, especially on the Web. Moreover, many vacation rental sites have yet to enter the Web 2.0 world, and instead favor a walled garden approach in which their properties can only be found in one place. It sounds like Steve has made great strides towards bringing them around! Maybe UpTake should partner with him?
And as for Claude’s idea, I think novel forms of the “word of mouth” you mention can make a site more useful and inviting, whether it takes the shape of a human “voice,” or even topically relevant video. It’s novel approaches to personalizaton and word-of-mouth information that will set travel sites apart . . .much as UpTake stands out from the rest of the crowd right now.
Hi Yen,
I agree with your fundamental thesis that it is still too darn hard for consumers to research travel destinations on the Internet. We can figure out how to get places pretty easily with the OTAs, but not whether we should go there in the first place. I think the answer is a vertical search engine for travel that is focused not on “getting there” (Kayak is doing a nice job with this) but on all the fragmented content (editorial and UGC) on the web around the destinations themselves.
Patricia
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