By Matt Zito, CEO of www.travelstartups.co
A few entrepreneurs recently emailed me asking, what does the travel industry need. This is a great question, so I thought this would be the perfect time to shed some light on what we have seen come thru the incubator, what gets us excited and get some input from some travel executives in our network on a few ideas they think is needed in the industry.
[This is a vision I have that I believe a travel tech startup could build.]
Nicole and I arrive at the Las Vegas airport after a plane ride from Orlando. We are here for the weekend on our quarterly getaway as a member of the Trveler spontaneous travel club. We immediately go to the Centurion American Express Lounge to fresh in up and I sit down and pull out my iPhone. I open the Travatar (fictional name) travel app. All I see is a Green button. I push the button and then all of a sudden, “the magic starts to happen.”
Travatar knows me well and works tirelessly behind the scenes syncing the APIs of my other favorite travel apps. A pleasant voice says, “welcome to Las Vegas Matt. We’ve found a few things we know you’ll love.”
On my screen I see 2 restaurants that I need to go to while in the city and 5 cool fun things to do, one from Adventure Bucket List that we decide to buy for tomorrow. All the content has been personalized around my interests and what I like. Every 2 hours a pop-up message comes in with 1 new recommendation.
I swipe to the right and all my itinerary details are there. Any reservations I have previously made I see. Outside the airport I see a sign with “Zito” inside the window of my FlitWays private executive car that is taking Nicole and I to our hotel.
About 2-miles from the hotel I receive a text message from Proxce that says our room is ready and we are in room 215. Our driver drops us off and we head straight through the lobby up the elevator and straight to our hotel room. I waive my iPhone in front of the door and the door opens.
I think we are pretty close to experiencing the above and I am hoping a travel tech startup could build this total immersive and customized experience. In short we would invest in this opportunity and I’d use the app on every trip.
Travel Startups Incubator is now almost 1-year old having launched in August 2014. We have grown quickly and we are looking forward to the next 12-months as we work on raising investment capital to build our team and develop our investment platform and startup community for the $7.5 trillion travel industry. We are seeking angel, strategic and VC investors in Travel Startups Incubator so if you are interested to learn about the investment opportunity please send me an email at email@example.com
To date we have made 10 investments, 7 of the investments have been announced, and 3 startups are signed with funding coming in July-August. 4 startups coming out of the incubator are now raising their series-seed capital.
We calculated that we have seen 500 investment opportunities in the last 11-months, so we are funding roughly 3% of the deals we see. We would like to be funding 5%-6% of the deals we see.
4 of the most interesting and wild ideas we saw this year was an entrepreneur selling $250K-$1M cabins/suites on a cruise ship (cruise real-estate), a college startup that was enabling students to rent out their dorm rooms, (Airbnb for college students), a device you strap around your leg while on a plane that helps keep your blood flowing in your legs and an entrepreneur/scientist that says he’s discovered a biblical city underwater (submarine sea tours).
The most popular travel startup idea is local guides in-destination, the peer-to-peer idea that has been tried many times over that entrepreneurs want to keep trying to build. We’ve probably seen 50 versions of this model is some capacity.
Leisure travel for consumers or B2C makes up 60%-70% of the applications we see and is actually the hardest business to build in the travel industry. To win in this game you have to be very different and one-of-a-kind to have any chance. Think Airbnb, Uber, Hotel Tonight. You’re going to need $25M-$100M to compete. If you go the leisure travel route with your startup, then your idea better be different than anyone else and you must create compelling value to get the travelers attention.
We think business travel is greatly overlooked. It’s a great category within travel with very little competition. College travel is another big multi-billion vertical in the leisure travel category with minimal players.
We love B2B travel tech startups. You can gain traction quicker on less marketing dollars and you can deal with professional people.
Many of the startups we have funded have a B2B angle.
Proxce – hotel identity management software for hotels.
FlitWays – ground transportation for travel suppliers via an API. (Ground transportation is the hottest investment category in the travel industry.)
Africabookings – hotel wholesaler.
Adventure Bucket List – booking engine for activity providers, API and widgets for travel suppliers.
Veedback – video review advertising for travel suppliers.
Here are few leisure travel ideas direct from some travel executives in our network.
Yelp Live – Particularly helpful for nightlife. When I go to bars/clubs/restaurants in a new city I want to know where are the best places right now. Historical reviews are not helpful. You need a live pulse to show the best places. E.g. I’m in NY on a Tuesday night – hard to gage where is going to be fun/lively with current apps/sites.
Micro-Social Networks – This is a hard one but nobody has solved it yet. Social networks for travelers. People have already tried and failed at this. HelloTel is trying at the moment.
Inflight/In-room Entertainment – Due for disruption. This will take hardware support too. I’d like to amplify my personal apps inflight and in hotels. E.g. Walk into a hotel room and with one sign in, easily connect my Spotify, Netflix.
Here are a few technical ideas on the B2B side.
POI based Location Tracking Technology/Platforms: Location based features are particularly of interest in the new world of mobile first travel products; however, precise location tracking at the POI level (e.g., Which POI you currently are at as a user) doesn’t exist at the moment; this is particularly true when precision/accuracy of a POI is key. Few companies like Foursquare have developed in house solutions that solve this (e.g., probabilistic models of where a user is currently) however this is completely proprietary and there are no strong, independent technology solutions that offer tech platforms/API’s that can be used for POI specific location tracking to help in travel/local discovery. For companies like Gogobot, Yelp, TripAdvisor (and many more startups) these would be extremely interesting and useful solutions to power innovative location based features.
Lack of Robust POI data:Although Google Maps API provides good, basic factual data; providing a comprehensive resource of point of interest (POI) data for attractions (and even somewhat for restaurants/hotels) is still somewhat under served. Companies like SinglePlatform, Locu and Factual have attempted solutions; with a strong focus on the US restaurant market (providing name, address, pricing, hours and menu data) but the data is often not up to date and more importantly is focused on restaurants first. Offering similar options for bars and attractions would be a good opportunity for publishers to get the latest data which is constantly changing (places going out of business, hours changing, etc) but also for small businesses that want to get published and maintain a presence on all of the online discovery platforms, business model can be a nominal subscription based fee from the small business that can be profitable at scale.
Aggregation of User Generated Content: Content is king as you probably know, and this is particularly true in the travel space. This is a particularly big challenge for new startups in the travel & leisure space as amassing a treasure trove of reviews and content is non-trivial and companies like Yelp, TripAdvisor, Foursquare and Gogobot have already established a strong foothold. Methods of aggregating this data for new up-starts to process and capture across publishers is powerful for both consumers and publishers alike and would be great to have a robust solution to process and aggregate this data for distribution across new and existing publishers.
Thanks to Lee McCabe from Facebook and Zaid Al-Husseini from Gogobot for sharing a few of their ideas for travel tech entrepreneurs.
Read more at http://www.travelstartups.co/travel-technology-the-travel-industry-needs/#AWsxcqcT6Mqgj5Dc.99