Travel Distribution Maze is a Challenge – and an Opportunity – for Startups

0

In a recent blog post I wondered aloud why there were so few travel technology startups here in Thailand, and suggested that one reason might be the complexity of the travel industry.

Here’s an infographic showing the complexity of the hotel distribution network:

hotel-marketing-diagram

 

Factor in GDSs, tour operators/DMCs and travel agents, and you have layer upon layer of distribution channels and middlemen. It’s confusing enough for those of us who work in the industry; to outsiders, and to techies with no travel industry experience thinking about developing travel tech, it must be utterly baffling.

But where there is complexity, there is a desire for simplicity, and where there are problems, there are opportunities for those who can provide solutions, and that is why it is well worth startups getting their heads around the travel industry and coming up with B2B solutions. One big advantage is that despite their frequent protestations to the contrary, the vast majority of tour operators/travel agents/hotels work in the same way, so a solution that works for one tour operator will most likely work for practically all. (I recently spent three years working for a tour operator who insisted that off-the-shelf tour operator solutions were not for them, as “we work in a totally different way to the rest of the industry”. They don’t – they work in exactly the same way as everyone else!)

There are several examples out there of B2B travel startups who have done very well not out of offering something new and revolutionary, but out of taking an existing concept and simply executing it better than anyone else.

Take USay for example. Originally developed as a solution for the founders’ own beach resort in Thailand, their product – a customer feedback app designed for mobile devices – is now being used in hotels and F&B businesses across Thailand and beyond. USay solves one very simple problem – collecting hotel guest feedback – by making it easy for both the hotel and the guest, and by allowing hotels to collect guest data at the optimum moment: checkout. Whilst post-stay email surveys have a response rate of around 15%, USay gets a response rate of over 90%.

Or look at Front Desk Anywhere. You might think that launching a new hotel PMS into an already crowded market would be commercial suicide, but FDA is one of the world’s fastest-growing hotel solution providers with thousands of clients worldwide. How did they do it? By creating an affordable cloud-based solution that addressed the common problem of integrating multiple hotel solutions by including the most essential – PMS, web booking engine, channel manager, revenue manager, reputation analysis – in one product, thus massively simplifying the above infographic!

So startups shouldn’t be put off by the complexity of the travel industry, because the more complicated something is, the more people involved are crying out for someone to simplify it. Go out to industry networking events, talk to hoteliers and tour operators about their pain points, and think about how you can help…and then come & talk to us about executing your idea, and getting it funded!

Tim and the Representasia team work with Southeast Asia travel startups to help them understand the industry, expand their network and attract investment. To find out how we can help you, email Tim on tim@representasia.com

Share.

About Author

Tim is one of representasia’s co-founders and the company’s CMO. He has been in the tourism industry since 1992 and has worked in Paris, London, Saigon & Bangkok. He has a strong background in operations, technology, sales & marketing. Representasia is his second business venture, following his founding of a successful Vietnam DMC in 2009.

Join the Conversation!