We talk endlessly about travel startups at Tnooz. Indeed, no publication has covered more travel startups, with over 200 new business profiles published on Tnooz TLabs.
In short: Tnooz loves travel startups.
Now enter stage right: tech blog giant Techcrunch.
This week,Â Techcrunch Europe has taken a big swipe at travel startups. Quoting Europe editor Mike Butcher: “If I have to see another startup which wants to âaggregate travel experiencesâ I will gnaw my right leg off.”
Noooo – that is so wrong! Aggregating travel experiences is where all the action is in the travel industry! (well, alongside vacation rentals and hotel flash sales).
But, seriously, Butcher is right. If you read the detail of his post he isn’t really aiming at travel experience aggregator startups at all. What he is saying is that travel startup entrepreneurs should aim higher and look to disrupt the entire travel industry.
That indeed is a big challenge.
It’s tough to disrupt the entire travel industry as it is so vertically fragmented and so global, made up of many local marketplaces and procedures and legacy systems.
Most entrepreneurs that aim to disrupt actually end up creating a reasonable, fresh looking business, but do not change much how the industry works.Â This is by no means a failure, but not quite the industry changing startup that Butcher wants us all to strive for.
But disruption must be out there right? Here then are my top three areas where disruption is happening right now:
1. Room level hotel information
Although Room 77 isn’t the first, it has certainly been the first to bring to a wider attention the idea that room level information is a key driver to a hotel booking.
As a result of this disruption, others are introducing similar features.
2. Person-2-Person (P2P)
Plenty of disruption going on here. Want somewhere to stay? Go to someone’s home (not a hotel). Want a tour? Book from an individual (not a tour operator).
This is new disruption. None of the companies are currently from what we would think of as the regular travel industry. This area could be massive unless legislation from various national governments holds it back.
There are challenges though: for example, in vacation rentals there are plenty of tales of incorrect calendar data or tardy replies to availability requests. Perhaps, at scale, businesses are best placed to handle booking requests rather than individuals who may or may not be regularly available.
But yes, P2P would fall into the definition of travel industry disruption.
3. Go local
There are too many layers in the travel industry. For example, traditionally in tours you have three layers: source market travel agent, source market tour operator, destination market supplier/ground handler.
Each layer takes customer service, takes cost for cash flow etc, etc.
This is pointless. Disruption is coming from exposing the previously hidden local ground handlers (for tours) directly to source markets. That’s what we are doing with TourCMS for toursÂ and others such as Tripbod are doing with local individuals.
Travel agents pretty much only existed because it was previously hard for consumers to contact these local businesses. Now it is easy using the web – the travel agent’s value diminishes and, therefore, this is a ripe sector for disruption.
Disruption is possible in the travel industry. There are even UK entrepreneurs aiming for big travel industry disruption, so it is not all about the buzzy Silicon Valley scene.
But aiming for big scale disruption is unnatural. Engineers tend to focus on the practical rather than the big vision and travel startups tend to be engineer-dominated – so we all tend to be a bit less bold than perhaps we should.
True disruption also requires change at the infrastructure layer of the travel industry – a tough, long-term, commitment perhaps beyond the resources of most startups.
Without solid foundations, a disruptive travel startup will look great for a day but won’t last a year as when it hits problems over scale, many of which often need a quick solution, there won’t be any quick answers.
Sadly, while travel startups areÂ brainwashed to strive for innovation rather than building industry changing infrastructure, this situation is likely to continue.