For the majority of people in the United States, the process of online travel booking is a pretty familiar experience by now. It’s probably right up there with buying books on Amazon or searching for information via Google.
It turns out that online travel is in fact the most mature and largest single e-commerce category. More than $90,000,000,000 (that’s 90 billion dollars) in travel transactions are done online every year—in the United States alone. And the market is still growing—with growth greater than 50 percent (year over year) seen in emerging dominant economies like China, India, and Brazil.
So if online travel has become commonplace, and Expedia, Orbitz, Travelocity and Priceline have become household names, why is there such a boom in travel start-ups right now? What problems are they trying to solve? How do they hope to compete?
Look no further than TripAdvisor, the newest household name on the block. TripAdvisor recognized a great opportunity and filled a huge void that was unmet by the large online travel agencies — people want hotel reviews from real people. Is it really surprising that people are nearly twice as likely to trust user reviews than what the hotel says about their rooms? (TripAdvisor now has 10 million reviews and has become such a hot phenomenon, that some hotels have taken to posting favorable reviews of themselves; so make sure you read between the lines.)
So this current groundswell in travel start-ups (which some have dubbed travel 2.0) is a direct response to the identification of a whole host of other niches and voids that have yet to be filled in the space. And the acceleration of innovation over the last 12-18 months is largely attributable to the decreasing cost of technology and simply a function of the Web itself. Data is everywhere (but useful information is scarce), software frameworks have gotten inexpensive and it doesn’t take as much money or as many people to kick-start a new venture. That said, I have a sense that we are seeing a bit of a travel 2.0 bubble with something of a “build it and they will come” philosophy.
As one of the new entrants in this space, we’re trying torestrain ourselves and stay focused—building a great travel planning product and authoring interesting and helpful content. Here are the key issues we see and are focused on:
- Booking is the last 5 percent of the online travel process. The 95 percent that comes before it is where all the heavy lifting happens. What people want is help in getting ideas of where to travel and what to do. Hence, our investment in editorial content that is vetted, fact-checked and written by local experts and journalists.
- Not everyone who visits your Web site wants the same thing. Relevancy is essential and we’re focusing on family travelers first. We want to make sure that if you’re a family traveler, our insight and information is helpful to you.
- Planning a trip online can be taxing. We think it should be fun and easy. That’s why we’re so jazzed about the TravelMuse Planner which is currently in private beta, but will be broadly available this summer.
While these are the key issues that we’re focused on, there are many more opportunities out there. We’re excited to see what some of our peers are up to like the guys at UpTake who are making it simple to quickly search thousands of content sites to find information relevant to families.
Travel is a space that is constantly re-defining itself and there are many unmet needs still to be addressed. I agree with Yen Lee at Uptake, that online travel is nowhere near “done”.
What do you think the big opportunities are? Or for that matter, the nagging little splinters that should get fixed?
We want to hear from you.