travel money
9 months ago

Why you should never consider a travel planning startup

Having founded WorldMate and Desti (which also swallowed Plnnr), not a week goes by without me being approached by an entrepreneur who has started/is starting/is contemplating a travel startup.

NB: This is an analysis by Nadav Gur, principal at NG Vanguard Enterprises in the US.

The vast majority of these follow the following pattern:

  • The pitch will start with “online travel planning for X is so hard…” where X is any of a dozen classes of trips/travelers – from garden-variety leisure travelers to vegan millennial honeymooners who want to do all their planning on their iPhone.
  • The solution is an app/site that has some combination of: curated content/strong search capabilities (e.g. semantic, natural language understanding, meta-search)/workflow for collecting and “planning”/social inspiration or collaboration features/reviewing, reporting and photo publishing.
  • The business model is “affiliation + some advertising” because “the average hotel booking is hundreds of dollars and we can get 10–15% affiliate fees”.
  • The premise is that “because this is such a better experience for consumers this will spread like wild-fire”. Therefore customer acquisition consists of a PR campaign followed by word-of-mouth or outright virality (“everyone will share their pictures/questions/trips”).

Now, this having been more or less the business plan for Desti, I have to empathize.

Having said that, all-too-often I proceed with a rude awakening. This post is meant to save some time and grief by pointing out some of the wrong assumptions and key blind-spots of most entrepreneurs entering this space.

I’ll also suggest some tactics that may work.

The premise: Travel planning is broken and we can fix it (right?)

bright idea

Here’s how digital travel planning works:

As a traveler, you’ve made some anchor decisions – some subset of who’s going, where, when and why.

You also have some preferences — e.g. brands, budget etc. You need to discover your options for transportation, lodging and activities within those constraints, so what you do is:

  • Search multiple times for the different items with different constraints, e.g. “what flights are there on Monday and what if we fly out on Sunday” “what are our hotel options or how about vacation rentals”
  • Collect alternatives, understand their implications and rank them e.g. “I’d rather drive down Highway 1 cause it’s more scenic, but that means we have to stay the night in Oxnard”
  • Share this plan with other participants to get their opinion too
  • Repeat prior steps until you run out of time and have to decide
  • Book, go…

The current state of play does not support this workflow very well.

Online travel agents and metasearch sites do a poor job of qualifying hotels (often on purpose), TripAdvisor and Yelp are not much better as you have to read dozens of reviews about each place to figure out what it’s really like.

That’s why you research on many sites, some by Googling, some by going to brands you know.

Those sites have the simplest form of index-based search so you browse lists and drill into individual items to figure out whether they are good matches.

Unless your constraints are exactly defined (e.g. you know exactly what you want and where), you have a lot of research to do.

Once you eventually get some “maybes”, there isn’t typically a way to turn those into a plan.

Whether you found them in one site/app or multiple ones, these sites are optimized for conversion, not for planning.

So tools for saving for later/sharing/comparing are generally not there. You resort to managing lists in Excel/Word/Google Doc etc. that you share over email with your co-traveler etc.

And so many product entrepreneurs’ natural conclusions are that anything that makes Search better and anything that makes Collection and Sharing more effective is a step in the right direction.

And so if NewProduct happens to be a great user experience based on smart artificial intelligence that deeply understands your intent (it’s a romantic trip!), personalizes search results (you prefer Marriott!) adds social proof (your friend has been there!) and contextual insights (you’re going in July and this is right next to the beach!), strings them together on a map, automatically plans the best routes and compares prices on a gazillion sites — you will realize this is better than what you’ve been using so far and switch over to NewProduct for your travel planning, resulting in time saved, stress reduced and travel improved.

QED. strategy paper:

“Our superior content and user experience will entice customers to our product; They will bring their co-travelers; They will plan all their future trips with us and we will grow exponentially.”

So why doesn’t it work?

Let’s assume your product/R&D execution was perfect. You nailed it. You built the ultimate travel planner/travel content site for a sizable audience.

Now all you need to do is:

  • Get a lot of people who travel to hear about it, just as they are getting ready to plan a trip
  • Quickly get them up-to-speed on your product so they realize their investment in learning your workflow will pay off, so they actually use it to plan their trip
  • Make sure they use it for the actual hotel bookings etc. so you get the affiliate fees
  • Invest the affiliate fees you got for those bookings to acquire the next customers (bidding against the company who paid you those fees)
  • Done!

That’s it for the Too Long-Didn’t Read crowd… If you want the details, read on.


First, you need to acquire users. Guess what — if they’re not planning a trip, they’re not interested in travel planners. They don’t even acknowledge their existence…

People are bombarded by new websites/apps/brands all the time, and they filter for what’s relevant.

That’s what you see GEICO ads on TV all the time – cause the only way to get your attention those 1–2 times a year when you give a damn about insurance, is to be in front of you all the time.

No matter how much press/word-of-mouth/viral exposure you’re getting, it only registers if/when it happens to be relevant.

Inevitably this means that you too have to advertise a lot. And no, free user acquisition schemes like SEO do not work in 2015 at scale in established markets.

The Priceline Group spends over $2 billion per year on Google Ads alone. Guess why?

Now, let’s assume that you did get a user (whose actually planning a trip!) through the door – maybe for free, maybe you paid for an ad.

Now you need to teach her a brand new way to plan her trip, one that is based on a new workflow that is different from anything she is using and/or based on trusting your content over established brands.

This needs to happen before she actually starts making booking decisions, but she needs to stick with it until she actually does.

Of course, she’s going to share the trip with her co-travelers, and of course, they too are going to use your product — even when one of them sends a link to some vacation rental he’s found on Airbnb that’s not available on your app.

Great job, given that the engagement curve for new apps and sites is notoriously L-shaped whether they’re games, planners or recipe apps.

Granted, a certain percentage of users will recognize the value — but without an external reason to come back to the app time and time again, a much greater share will churn away.

Still, let’s assume your app was so great it did influence/determine the purchasing decisions of enough travelers, and therefore they will click-to-book on your site and you will collect an affiliate commission — you can now re-invest that to acquire the next batch ad infinitum, right?


Many travel startups see users make decisions using the information they got on their site, then going up to the channel they already trust with their credit card — whether it’s an OTA or the hotel/airline.

This happens even when there’s a “Book with [X]!” button on your site. It’s a phenomenon that takes a long time to change. If the customer can buy the same thing at the same price on a channel he’s done business with before — why wouldn’t they?

Brent Hoberman, co-founder of

“We were seeing good traffic, but it took two years for traffic to start converting on our site.”

Say you nailed that too, and your users survive the funnel to book through you so you can collect an affiliate fee. Who pays you the fee?

Ah, it’s that same online travel agent or meta search engine you were competing with over the user’s attention.

Guess what? They pay it out of their own commission. So if a booking is worth $X to you, it’s worth twice as much to them. Guess who will outbid whom at the ad bid?

Competing with your affiliate parent for the same end-user is not a great strategy, especially when the end-user knows you both.

So what does work?

think travel

First, if you’re an end-user, I really advocate some of these products. We had to pull Desti off the app-store when we sold to Nokia in 2014, and since then planning family trips has become much harder for me personally, and I often hear the same from friends and colleagues.

The problem is a better product is not necessarily a good business. However here are some strategies that sometimes work.

Probably the best strategy is distributing inventory nobody else has. If consumers know your site is the only channel where they can get X and X is desirable because it’s better/cheaper/more special, then they will come to you to buy X.

This worked spectacularly well for Airbnb, where most of the inventory did not exist before; it worked well in the early days of HotelTonight when you couldn’t book those hotels at those prices anywhere else etc.

This is why the most important activity for Expedia and Priceline ( is getting as many hotels connected as they can.

Of course, going down this path means your focus is on being a marketplace/retailer, not a travel planner.

Another approach is based on realizing that a travel planner saves time/effort — i.e. it’s a productivity app, and monetizing it with a SaaS model.

In a sense, WorldMate and Tripit were not travel companies, they were productivity companies streamlining a business process – collecting info about business trips and using it during the trip.

This approach is what the managed corporate travel industry is built on – companies pay to have their employees focused on their day-job.

However travel management is not a high-growth industry in this day and age.

Then there’s B2B2C. Those content curation capabilities, superior search, personalization, social proof etc. may be put to use by incumbent OTAs/metasearch players to improve their conversion rates, increase basket size or reduce acquisition costs.

A white-label/tech-vendor strategy works if your product is indeed relevant within the incumbents’ offering, hard-to-build, reasonably easy to integrate and doesn’t step on too many toes.

However that may or may not be a viable / scalable business.

Adjacent to that are other data businesses where you sell the user exhaust data in some form. But that requires a lot of data in the first place = lots of users. Which you probably don’t really have.

Unless of course, you’re Google or TripAdvisor………..

NB: This is an analysis by Nadav Gur, principal at NG Vanguard Enterprises in the US.

NB2: Travel money, Bright idea, Help and Think travel images via Shutterstock.

Share on FacebookTweet about this on TwitterShare on LinkedInEmail to someone
Special Nodes

About the Writer :: Special Nodes

Special Nodes is the byline under which Tnooz publishes articles by guest authors from around the industry.



Your email address will not be published. Required fields are marked *

  1. Peter

    An excellent article, very interesting everything related to the startup

  2. Sean O'Neill

    Sean O'Neill

    There’s a complimentary discussion on YCombinator’s Hacker News with dozens of comments, here:

  3. Ricardo

    I suppose this article is referring to the US and maybe the UK and Canadian travel industry. Many companies are aiming to offer their services / new ideas to developing markets such as Latin America. I agree with the article but entrepreneurs should not get discouraged about starting a travel company.

  4. Justine Baker

    Travel portal & social network with a few things that make us stand out, create community with everything in one site. Why? Because, it is “All About You” traveling or not. Do more than just book your plane, have fun if your laid over, or just hang out. One thing in common…travel. Launching soon!

  5. Zia Khan

    Its good to read posts like these… After reading the post, i was rather confused to believe it or not… Proceeded to read the comments.. What i figure out is that i have ended in a community that only speaks negative… For any new startup that any one is thinking of should be unique and should see the adding value to the community. I get to read comments about failures of people who ended up to do travel start up by copying what is already existing in the industry with some fine tuning.
    Now i am not against reading reviews and peoples feedback.. But come on, Its not the end for the travel industry and i strongly believe their is room for a completely new way of travel arrangements.
    For all who plans to startup a traveling arrangements…Staying away from negative people is the first step when thinking of a new idea.

    • Alex Kremer

      Listening to people who’ve been there, done that is the first step when you think you’ve thought of a new idea.

      • RIchard Grote

        Agreed. I am incredibly grateful for the mentors and advisors who have shared their hard-won input and who have kept me from running with doomed-or-unlikely startup ideas. Far better to validate real customer pain at the start – or (perhaps even better) to solicit feedback on a few different ideas before going all in.

    • Justine Baker

      The travel industry is a multi-trillion dollar industry. In the U.S. every second 1.8 million is spent on travel. 500 investors could tell me my business will never make it. (It will and is.) This article is informative on travel startups. Even if I found it “negative” it wouldn’t keep me from charging ahead. I don’t sleep, I eat and breathe what I’m building. I will take advice and constantly seek it and study the market. Study success and mistakes. Improve because of them and despite them.

  6. Saket

    Tnooz, I am the co-founder and CTO of I would like to write a piece on “How a travel planning startup can succeed and why have so many attempts in the past failed”.
    Also would like to rebutt a few thoughts in the above article and in some previous article published on Tnooz!
    Let me know.

  7. krishna kumar

    Great post Nadav,
    It’s always good to here your insight and more to express them.
    you did it so nicely.

  8. Daniele Beccari

    Nadav, this is brilliant.

    I would only add two bits:
    – most people enjoy holiday travel planning as it is. Dreaming about destinations, things to see and do, discovering that hidden post from a local… There is nothing much to fix.
    – most travel planning and booking is done by women. (Ask Brent for the details) . If a solution will come, it will come by a female team.

    Of course business travel, family, and educational travel are different stories and markets.

  9. Ying Liu

    Nadav, I feel your pain that there is no good app for family trip planning. Give Trip+me a shot. We are not perfect but we have a roadmap to get there and become the best trip planning app.

    I am the founder of Jovia Inc. which is the developer behind Trip+me, the 101th solution to the legacy trip planning problem. LOL
    I really want to thank Tnooz and Nadav for giving the entrepreneurs a timely realty check. As someone from technology industry without any prior travel industry experience, I have been observing the travel industry for 8 years as I felt strongly about the pain of trip planning and tried to figure out why no one came up with a good solution yet. 2 years ago I started rolling over sleeves to work on the 101th solution. Please allow me to give my 2 cents.

    1. Is there a company in travel industry, brands, OTA, megasearch, content providers that truly prioritize customer-experience to transaction or advertisement, like Apple? Even they care about customer experience, can they really make changes and interrupt themselves?
    A: Giving it a benefit of doubt, my observation is everyone is much pressed by the investors, public or private, to show that they can make money out of $2.1 trillion US market alone or 7.6 trillion worldwide market. For the travel giants, they are just simple too big to implement any innovations. As any changes they make, they are afraid they will break something.

    2. What is out there for trip planning? Have travelers got what they really want?
    A: What is out there: Everyone does one element of trip planning and then wants people to use them for transaction. Other than the big OTA’s everyone knows, I categorize the available products are:

    –display and sell tours: Triphobo,
    –recommend POI or activities then immediately hope the users will book hotels or activities from the app: Touristeye, Desti, Plnnr which I liked the concept but not the machine-driven recommendations
    –provide POI reviews and tips: foursquare, gogobot
    –Itinerary manager: Tripit, Tripcase, Worldmate etc.
    –Tourguides and maps: Tripomatic

    Given the fact that they are so many dead bodies on the road but there are still many people like me who are working hard trying, I sincerely doubt that travelers have got what they really want, let alone that we as developers should think ahead of customers needs.

    3. should we give travel app a character?
    A: yes, we do. Travel is too broad. Everyone has a feeling for it but everyone’s needs are different. Travel app needs to have an attitude.

    4. go-to-market strategy?
    A: no one strategy fits all. Did we as startup owners ask ourselves: What’s really the target audience? Where are they? What do they do each day? What apps do they use? How do they get information? Why do they need my app? Startups sometimes are too naive to think that travelers are actively looking for better solutions but actually the travelers don’t have to do that.

    By agreeing most and disagreeing some of the points in the article, let me close my comments by showing one of our users’ feedback:

    “After trying several travel planning tools (like tripit, tripmate, tripomatic, planapple, triphobo ect) i must say that this app (and website) is more than promissing. Its already great to use, intuitive, share plans and easy to add locations, maps and route information. I give it 4 stars for now as there is still room to improve (like adding train schedules, but this is in the planning i understood). So i highly recommand this tool!”

  10. Javier Escribano

    I’m the co-founder of TouristEye, a travel guide app bought by Lonely Planet two years ago. We ended up having a good outcome but the journey was hard. I believe we made it because we were the first ones to launch an app with offline maps and information on 2010 so he got a good position on ASO (kind of the same that happened to TripAdvisor with SEO, we got >1M downloads with $0 marketing budget). It’s also true that we were far from break even, so our success was based on usage.

    I highly discourage anyone to start or continue doing a travel planning startup. Nadav has shared with us a well written post with the reasons. But..? Sorry, no buts. There are tons of ideas out there, just don’t choose travel planning. You love traveling, so travel; but don’t build a travel planning app. Or at least don’t try to make a business our of it. It could be your side project or your non-profit project. I may even start mine this year with some ideas I couldn’t fully developed on TouristEye or Lonely Planet, but it would be totally a side project, a tool just for me and friends.

    Seriously, read again the post and comments. Don’t start. And if you have already started, change. Sorry 🙁

  11. Ricardo Camarinha

    Before commenting let me just say I’m also one of those crazy guys trying the inspirational model. (ours interest and budget based)

    Yes its true, when the idea came up I had no idea what the travel industry was, and all players that had lived and died, I was living in Rio (had just arrived) and had a few days off and had no idea where I could go…

    The idea matured, got a partner from neuroscience and a tech guy, did a mock version, and got investment for the, now online, MVP.

    That was in March this year. Since we’ve started developing we’ve passed many different moments, some believing, some disbelieving in what we were doing.
    We got to now our ancestors Joobili , Wanderfly, Triporati, Tripbase, Planetism… Read their stories, and every time it was like taking a punch in the stomach, but also every time we got back up and re-organized what we were doing and decided not to through away the towel.

    Also we read what all you guys in the industry had to say about it, Tnooz, Skift, and some industry advisors our investors got us, keep destroying the idea, and saying that others have tried and ultimately people would never buy like this (for lots of reasons in the story and in all off your comments). Again more punches and again we needed to re-group and re-think.

    Reading this story and all you comments had also the same effect and here we start trying to get up again.

    I believe you are all right, all the companies that tried this failed, in some or several points and maybe we will too, but at least we are in a moment where we can learn from many others.
    I believe this experience from all the ones that tried and failed, will make the ones with the ability to learn about it, closer to getting it right. So I believe we are now closer than ever, to get a website cracking this.

    As you see, and you all pointed out there are still lots of guys trying to do this, maybe more then ever, although all that has happened before.
    When so many people go in one direction probably there is something there…

    – Traction and getting UVs is a problem in any Startup (specially the Web ones) not just Travel, and has been solved before, so I’m guessing this is the least of the problems.

    – The ultimate problem is conversion, making people use it, more than once, and during the all booking funnel.
    “ok let’s imagine you have an amazing engine, giving amazing destinations, really understanding the user, and maybe he would use it to get inspiration, but how would you make the user get back there after deciding?” “Why wouldn’t he use his regular channels?…”

    Nadav Gur you say:
    “First, you need to acquire users. Guess what — if they’re not planning a trip, they’re not interested in travel planners. They don’t even acknowledge their existence…”
    I don’t agree, Millennials are curious and dreamers, they like to wander around the web and sometimes to dream where day can go. We’ve been getting curious people: “Where they can go and scuba dive for 400$?, and what about if I want modern art and party….” We’ve been getting user’s playing with it, but maybe this is because we are novelty….

    But I agree with mostly everything else:
    “No matter how much press/word-of-mouth/viral exposure you’re getting, it only registers if/when it happens to be relevant.” Absolutely
    “Inevitably this means that you too have to advertise a lot.” Also absolutely true
    “And no, free user acquisition schemes like SEO do not work in 2015 at scale in established markets.”
    I’m guessing this depends on what you are selling. If the product and your perspective are different you can enter well established markets. I used to work in a market even more conservative then Travel, Wine, and saw amazing exemples of this.
    “Now you need to teach her a brand new way to plan her trip, one that is based on a new workflow that is different from anything she is using and/or based on trusting your content over established brands.”
    Also agree, usability must be amazing and getting trust is super hard and takes a lot of resources (time and money…)

    I also agree with:

    “Now all you need to do is:
    • Get a lot of people who travel to hear about it, just as they are getting ready to plan a trip
    • Quickly get them up-to-speed on your product so they realize their investment in learning your workflow will pay off, so they actually use it to plan their trip
    • Make sure they use it for the actual hotel bookings etc. so you get the affiliate fees
    • Invest the affiliate fees you got for those bookings to acquire the next customers (bidding against the company who paid you those fees)
    • Done!”

    And that is what we are tying to do with Flykt.

    Just one small diference at the moment we are not affiliates for rooms, although we are adding affiliate programs (for trust issues of course).
    There is so much believing in the industry that you can’t get price this way, that you don’t seem to check this. We do constant price comparisons here at the office. Even this morning we were checking an email from, full of special offers, some promising 50% discounts, guess what, we have the same prices in the majority of those properties… our excel file here does not give say are the cheapest around, although that’s what they promise and what people believe (and of course as all this story indicates, believing are hard to fight)…

    We are far from ready, and have lot’s of stuff we need to do and understand, and everyday that passes we know more problems are adding to the pile, but also more solutions in our plans.

    Quoting some of the comments bellow:
    “If all entrepreneurs cease to innovate in this field , there will be no growth and the consumer will not see any change in the way they plan, book or make travel. May be it will take time for the consumer mindset to change , however good products can make things turn around.”
    “I start where the last man left off.” – Thomas Edison”

    I can tell you a number of things that were tried several times and “were impossible” before one succeeded, our development company is called Moontrip so here is one…

    • Valentin Dombrovsky

      Great and thoughtful comment, Ricardo. You’re mentioning right thing – you should take others’ experience into account and learn from their mistakes.
      I also believe that for any startup it’s right that right solution comes with right technologies in right time. So, maybe there is something in travel planning space that might be “cracked” (and Nadav mentions some opportunities) – good luck in finding right niche for you company.

    • Tony Carne

      Interesting you mention Wanderfly above Ricardo. FWIW – I always felt they came pretty close to cracking it with their fantastic intuitive UX, willingness to work with brands to create unique offerings for the user and beautiful design. Can’t help but feel that being acquired may have been a tactical move by their acquirer? Good luck with your plans.

    • Nadav Gur

      Ricardo – first, good luck in your efforts. I really hope you succeed.
      Having said that, I think some of the salient points of the bullet points above have been missed.
      Sometimes, you need an innovation to be repeated 10 times and only the 10th attempt succeeds. There’s typically a reason – something’s changed in the environment. Think VoIP and mobile broadband. I’m not sure that the environment is any friendlier to this type of product in 2016 then it was before.

      • Ricardo Camarinha

        Agree sometimes a change in environment is needed, and I believe this change is happening now. With millennials being now the most present generation in travel and wanting more and more to be different and experiences that would make them feel unique…
        But anyway of course its an herculean task (most B2C are), and luck has to be in play. Like you can imagine, with all the feeling that surrounds this model, we’ve analysed business alternatives with the tools we’ve been developing here (category geo-mapping tool, destination and user profiling algorithms…) and we believe we’ll be ok.
        Anyway if it does not work it’s been a hell of a ride and we’ve been learning everyday!
        Thanks for your wishes of good luck and for your insights,

    • Mike Coletta

      Bravo to you Ricardo for acknowledging the ultimately indisputable points made in this indispensable travel startup article. It is typically next to impossible for an eager entrepreneur to choke down the frightening history of travel planning startups, much less allow themselves to even consider a major pivot or (gulp) starting from scratch. And I get that completely – when you have invested a lot of time and effort in a venture you want to see it through. No one wants to give up on the spot. I’ve been there more than once myself and seen it a million times, as have so many other people commenting here, and we can all offer our learnings. But the truth is most of us are blinded by our determination and have to find out the hard way.

      So much failure in the travel industry stems from not understanding (or trying to understand) one of the longest and most active histories on the web. But you need to understand the future as well – trip planning isn’t much more than aggregating information. Can a travel startup really expect to be able to do that better than Google as they move deeper into travel, personalizing recommendations using personal data from a user’s calendar or email?

      I would never claim that it would be impossible to find success in travel planning – breakthroughs don’t occur without perseverance and fighting against the odds. But there are a thousand other problems out there waiting to be solved, and if you have a smart, capable, driven team in place, you might be able to build something that travel consumers as well as industry stakeholders find truly innovative and valuable. Only then can you expect to find an audience, raise money, and build a sustainable business and/or have an exit. By working on a trip planning startup, you simply stack the deck against yourself. It will be harder than you can imagine to get consumers, partners, or investors to pay attention to a new travel planning tool for more than a second. Although they will all tell you it looks awesome!

      There is so much new technology on the horizon just waiting to be applied – if you really want to be creative and ride a wave (timing is not given as much credit in most conversations as it deserves push yourself to think exclusively about what can (and should) be accomplished in the future of this industry, not what has been tried in the past.

      • Ying Liu

        Hi Mike, thanks for the comments. Not trying to be defensive, just want to comment on your point about Google. I agree that the most powerful player who can disrupt the industry by connecting all the information and intelligence from their internal entities and different sources is Google. But when people realize that big companies don’t work that way. I think that leave opportunities for startups to find their niche.

  12. Jenni Schwanenberg

    Great discussion here. At FLIO we more focus on offering help right on the spot, this seems to be a need too.

  13. barbara

    Travel planning sites don’t work because travel planning is just not that difficult, no matter how much the founders of these things try to convince us otherwise.

    Also, what Timothy said.

  14. Alex Bainbridge

    A number of people are now focussed on building day planning apps/services, rather than travel planning. i.e. lets go here in the morning, lunch there, do this in the afternoon, do this in the evening.

    Not sure if we collectively consider this travel planning or not, but apps of this genre are where the action is right now. They avoid some of the issues above, but still, the key problem (as mentioned by Chuck) is attaining sufficient frequency of use to be habit forming

  15. Travel

    Having been in the travel industry as a dev/design/ux/cx I can reinforce a point the article makes which is The customer simply does not think like that. People are inspired and think oh would be cool to go to x,y,z then see a,b,c and then chat to their friends/family which slowly turns into lets see how much it costs to fly here etc etc. People don’t wake up thinking “lets plan a trip” and google plan a trip app/website.

  16. Miron Ophir

    A well presented logical analysis of the travel planners Eco system by my former CEO. Nadav is pinpointing the important issues, as always. I enjoyed reading this, and since I used to be part of this operation in the past – I can say that many of the hurdles details in his post are more than relevant today. Still, money is pouring into this industry, god knows why.

  17. Liang Zhang

    I don’t know how many travel tech founders have read research papers in travel/tourism. I am a new entrant to travel/tourism industry. after I read some papers, I noticed my initial ideas are very off the target.
    meanwhile, I “start with why”. ask myself why I do this.
    finally I figure out our startup mission is to make traveler have satisfied experience, then help them get life happiness. so, if travelers enjoy planning trips, we can’t take this away from them.
    in this information overload era, I think the right product/service to traveler is a combination of UX innovation + a holistic personalization engine. I am striving for this!

    • Drew Meyers

      Hey Liang
      We worked on the concept of a welcome kit a few years ago, the goal was the “cliff notes” version of TripAdvisor –>

      The problem we ran into was content… what was the incentive for someone to put content onto the platform? There really wasn’t one that we could find…

  18. Vikki Rabe

    Great article Nadav! Thanks for sharing your insights.

  19. Fernando Mendez

    This article brings positive, constructive points. That said, I disagree on the tactics of overly dramatic, attention-grabbing negative titles. The word “travel” equates to an insult in silicon valley these days and the press/bloggers seems to be feeding into the spirit, making fund raising a lot harder. Particularly early rounds. Worst is; most articles are “anecdote-based” or follow the pattern “I failed, therefore is impossible”. There is complete lack of data or fact checking. Is travel really more difficult than other industries? Where are the facts? I believe startups in general are a lot more difficult than what people perceive and I havent seen any data (yes lots of anecdotes) pointing to travel being “statistically significantly” harder. I understand you need your eyeballs (we all do) but please be mindful of us that need our seed money 🙂

    • Kevin May

      Kevin May

      @fernando – here is a fact about travel startups: we’ve tracked about 650 of them over the course of the past 6 years and the deadpool rate is running around the 65% mark (that’s a conservative figure).

      I would take exception to your point about the media “feeding into the spirit” whereby fund-raising is therefore somehow now harder as a result.

      It could be just that the media (including the once fawning West Coast tech press) has realised that many startups are simply not going to get any traction, so have a far more cynical PoV, and in tandem the money folk have also finally come to the conclusion that there’s often little point in throwing money at businesses that can’t scale for them to a meaningful level.

      It’s not a conspiracy or bad spirit – it’s just a lot of people have woken up to the reality of travel startups.

      • Tedd Evers

        Kevin, that 65% failure rate number is very interesting – thanks for sharing. I wonder how that compares with startups overall? A quick search shows Forbes putting it at 90% ( and WSJ at about 75% for venture backed startups ( Good thread on Quora also: ( Does this mean the road for travel startups is easier (e.g. for those with no prior industry experience)? I don’t think so. One can find statistics (or damn lies) to prove a point. In my experience with several startups, prior industry experience may not be required but it does increase one’s chances for success.

        • Timothy O'Neil-Dunne

          Be careful here in how you use that number. Travel has a much higher level of “Zombie” startups. IE Startups that dont actually die but live in the Twilight. Why? Because Travel is such a passionate category. The large number of earlier incumbents of the space (they used to be called Travel Agents) also did the same thing – IE did not price their products economically. I would say the real number of “Desdpool” and “Zombies” is closer to 95% or even higher. Cheers

        • Valentin Dombrovsky

          The question is in methodologies used. If Kevin says that Tnooz tracked startups, that means that these startups were able to “get from underground” in order to be seen. Overall failure rate is close to 95 %, I believe – most of startups are just never heard about.

        • David Feldsott

          My guess is that 65% number is startups that have an article on Tnooz or has received some seed funding or press, etc. So, I’m sure MANY MORE travel planning startups have launched but died before that point, so the “real number is probably closer to 90%. As Kevin stated, 65% is a “conservative figure.” Since most travel apps are not being used (except for a few exceptions), the actual number is probably closer to the average startup failure rate of ~90%

    • Valentin Dombrovsky

      There was great case on Tnooz – when there was 1 company that tried to make travel industry “shit its pants” – The company was launched by an entrepreneur who “knew startups”, but it turned out later that he didn’t understand risks in travel –

      That’s why such articles are important. Maybe you could do everything better, but you should have information of what you’re to expect.
      I see that you’re trying to do yet another travel planning startup and you believe that you’ll be the one who makes it right (like many of us can’t believe that they’ll die eventually). Well, if you have another experience with it and manage to overcome all the difficulties becoming “Tripadvisor of travel planning”, it will be great to read about your experience on Tnooz or anywhere else.
      Good luck! 🙂

  20. Tony Carne

    It has been over 3 years since I wrote this piece here on Tnooz:

    Since then there has been one (1) travel planning site emerge that I use with fairly regular consistency (which equates to 3 – 4 times a year) and that is Rome to Rio. I use it because it solves a specific question (just transport, not my whole trip) I want an answer to and generally brings me the random global flights I need to take, 30-40% cheaper than an OTA search. I mention this to say it isn’t impossible to break through but its also not very likely.

    It is amazing how many people read that initial article and then sounded me out about their own new travel planning wizz bang. I can’t think of one who started at the point of “this is the unique product I’m going to transact with my customer”. Instead all the “innovation” came at the how I’m going to inspire the customer in a different way with my drone-first-mobile-only-occulus-rift style presentation of content that will take me to viral heaven and a massive user base. As awesome as that is – it is a long way from the book button. I always recommend they take this idea to the marketing department of a brand they love or respect and work with them to make an earn out of it. Their response – “but we are going to be the next Airbnb in travel, we don’t want to waste this on a handful of brands”. OK.

    I see this mentality endlessly compounded by travel planning start-ups often winning start up pitch competitions. Travel is sexy and that is obviously influencing these decisions but even a tiny bit of research or industry knowledge would alert a judge that this ‘me too’ idea almost certainly isn’t going to fly.

    Unique products also aren’t as hard as people seem to think. Airbnb are again showing the way with their Journey range – (packaged Airbnb accom, Lyft transfers and experiences in the city). Simple and perfect for a no thinking required getaway/weekend product but also simple to pull together with their own inventory and a couple of API’s. Seamless for the customer and instant, low friction, low touch, low admin in the booking process. Its a totally unique offer, targeting a more high frequency travel segment than ‘the big trip’. Someone very easily could add say a W Hotels + Uber + Urban Adventures product to their innovative inspiration piece to have a specific, compelling unique offer for the lead they’ve generated. Secret Escapes for example do something along these lines and guess what – their business model is seemingly working.

    I personally believe there is still a huge disruption opportunity for the internet to take a huge share of bricks and mortar retail travel agencies but only if someone can better the service they offer and that means high touch with the customer delivering exact answers to their specific questions at a way better price point. Likely it will come from within their ranks.

    • Valentin Dombrovsky

      Your article is already part of “golden reserve of thought” for online travel in my opinion, Tony, so, I want to use the opportunity to thank you for that.

      And as for disruption – maybe it will come from the likes of Lola which was recently launched by Paul English – I mean from combination of internet technologies + “human powered” expert engine (with some additional personalization capabilities)?

  21. Joe Buhler

    Sums it up pretty nicely, Nadav. Made me feel nostalgic as someone who was involved in what was very likely the first attempt at building a site that combined trip planning with booking, as opposed to a single travel component booking site back in 2000. Even then consumer adoption of a different UI from that of the already then established OTA booking screen was a challenge and social sharing or content collecting tools were non-existent. Result: a failure despite having had established relationships an competitive pricing with all product suppliers of the site. Oh, and did I mention, it was possible to book multiple destinations and what’s now called ancillary services as part of the package too!

    The only companies capable of building an integrated trip research, planning and booking tool would be existing major players with a huge customer base, supplier relationships and technology capability to build it all. If any of them had an interest in this, it would have been built by now but that’s not where their priorities are.

    • Valentin Dombrovsky

      “If any of them had an interest in this, it would have been built by now but that’s not where their priorities are”.

      As I’ve mentioned in my comments, some of them started making steps towards it.
      In general, I totally agree with you. Well, maybe we’re all wrong and there’ll be some David who will fight Goliaths, but we can’t see it happening now.

  22. Valentin Dombrovsky

    “Then there’s B2B2C. Those content curation capabilities, superior search, personalization, social proof etc. may be put to use by incumbent OTAs/metasearch players to improve their conversion rates, increase basket size or reduce acquisition costs”.

    Yeah, that’s what I’ve seen recently with companies like Utrip, Inspirock, Triphobo entering b2b market and trying to sell to destinations, hotels and other travel industry players. This business model is still to be proven though.

    I’ve understood that the main problem for travel planners working on b2c market is that they can’t become “the place to go” when person starts thinking about having a trip. Google, Tripadvisor, OTA websites are all used for inspiration and it’s hard to get to the top of the funnel and to lead customer all the way to the bottom where conversion happens.
    At the same time it’s true that OTAs and major industry think about travel planning capabilities and sometimes travel planning startup even might be lucky to be acquired like it happened with Mygola and Tripbod, for example.

    All in all, thank you for the great coverage – will share it with everyone who comes to me with new travel planning startup idea. 🙂

  23. Riaz Pisani

    Great article…

    Watch out for this site soon to launch…


  24. RobertKCole

    Well said Nadav. Extremely valuable insights.

    There are three additional points that are frequentlyoften overlooked:

    1) The new product must also create value for the travel supplier in order to gain access to better, cheaper, broader, differentiating product. Expedia & Priceline can get it because they successfully provide traffic that is often not cost-effectively accessible through most travel supplier direct channels (even though many complain about the need to offer high commissions/deep discounts to work with the OTAs.) There needs to be a good reason for the supplier to provide content they are not providing to others (unique traveler segment, more favorable travel patterns, premium pricing opportunities, etc.)

    2) All that new, unique, differentiated content needs to be on-boarded quickly and efficiently. Most investors are quick to identify the “field of dreams” mentality (build it, and they will come) that drives up the time and headcount to capture sufficient product breadth for a launch, let alone to quickly scale – especially when applying an MVP (minimum viable product) approach to limit initial development spend on the user experience.

    3) Finally, the strategic lynch-pin is often the chicken v. egg conundrum of whether supply attracts demand or demand attracts supply. There is often a fine balancing act required to avoid wasting resources by focusing excessively on one side without the other. This potential lose-lose scenario – too much demand without sufficient supply inhibits growth and frustrates users, while excessive supply with insufficient demand leads to starving, impatient suppliers – has drawn many into the travel startup dead-pool. There needs to be a focused strategy, with clear milestones to keep the two factors properly aligned, with the ability to strategically shift resources as new markets, economic conditions or contracting/acquisition pace varies.

    Bottom line, there is often a very good reason for nobody attempting a particular form of startup before. If it was easy, somebody would have already done it.

  25. Drew Meyers

    Having working on some travel planning product iterations of my own, I wholeheartedly agree.

    Some lessons I learned:

  26. Kevin Fliess

    Spot on. Wish I read this in 2007. 🙂
    Co-founder TravelMuse (one of the early pioneers)

  27. Josh Steinitz

    Well said Nadav. I hope Tedd is right, but my advice to trip planning entrepreneurs roughly mirrors yours — I want them to be thinking about being as close to the transaction as possible, and ideally in a segment in which they can compete on a more level playing field.

  28. Scott Hintz

    Well said, Nadav. I’ve seen hundreds of pitches in the travel planning space and I’ve reached the same conclusions you shared in your article.

    What’s also surprising to me is how many entrepreneurs think they are the first ones to figure out that travel planning is “hard” and that they’ve come up with a (not-so-novel) solution. It’s shocking how little research founders have done about other startups that have launched (and failed) over the past few years.

  29. Matt Zito

    Great post Nadav, love this quote, “Probably the best strategy is distributing inventory nobody else has. If consumers know your site is the only channel where they can get X and X is desirable because it’s better/cheaper/more special, then they will come to you to buy X.”

  30. Tedd Evers

    Nice post, Nadav – a clear and concise roundup of the issues facing a travel planning startup. As you know, many stubborn entrepreneurs – successful and otherwise – ignore people telling them it can’t be done. So while the headline may not convince, it will surely get their attention. As it did mine 🙂

    The core issues you mention – acquisition, competition from entrenched players, user behavior modification, utilization – are the same facing any startup, in any industry. Given a big enough opportunity and the right execution, they’ll get solved.

    I believe the broader trends of increasing fragmentation, more hectic lives, and greater access to travel in an enormous, expanding market provide fertile ground for someone to create a breakthrough “travel planning” solution. Most likely, it won’t adhere to current definitions, it will take the experts by surprise, and later look obvious. Like airbnb. Vive la différence!

    • Richard Walsh

      I do agree with your point Tedd, there will be innovation coming for pre-trip planning. But, there has to be a connection with the continuous evolution of travel practices. Ironically, airbnb adopted a practice that has been around for decades. I booked rooms in Europe in the 80s and condos in Florida have always been around. Airbnb literally took an existing market of individual renters and capitalized on social evolution on the the web and mobile. Voila!

  31. Timothy O'Neil-Dunne

    Addressing some of the key issues that Nadav raised does not give an answer. But getting the would be (as opposed to a wannabe and there is enough of those) to comprehend what is necessary can be distilled.
    Allow me!
    The Professor’s 7 +1 Essential Elements to Travel Startups.
    1. Traffic – Who ya gonna call (and how much will that/those calls cost)
    2. Content – Yup gotta get me some. (Even if its not your own).
    3. Product – Know the diff. (People confuse the two. Please get it right)
    4. People – Old f**ts matter. (You really do need a few grey haired grumpies on your team who know Travel).
    5. UX – Looks can kill y’know. (Just because you can doesn’t mean you have to add Dayglo & the kitchen sink)
    6. Money – Get REAL! (Be realistic on your budget. I guarantee you will exceed it)
    AND (drum roll please)
    7. Time – Time is the most expensive commodity for any business and the least metric’d and understood.

    +1 ? But what is the real magic ingredient? Well I wish I could tell you it was something else. But its luck. After all if it wasn’t then it would be magic now would it?



    • Alan Young

      Love your “Essential Elements” Timothy!! Right to the point.

    • Bruce Rosard

      Interesting dialogue from around the world, thanks for kicking it off Nadav. Timothy – I especially agree with your #4! As far as the magic ingredient – Luck doesn’t happen, Luck is earned and it has to start with the founders. Are they the right founders to take an idea and make it run, pivot if necessary, and keep their focus? And what’s the market? Travel inspiration sites just don’t have an easy path to monetization. Unless you’re building the next Instagram or Whatsapp, or some other way to aggregate millions of users, you better get focused on monetization that goes beyond earning 5-20% commissions on bookings.

  32. David Feldsott

    Great Article! I couldn’t agree more. The “holy grail”, in my opinion, in this day and age is to build a product in a large-enough market that is still “unattractive” to the bigger players while also having inventory that nobody else has. That way, your CACs on Google Adwords are pretty low cost and you are converting users since they can’t go anywhere else. That’s why I find ground transportation and inter-city buses so appealing. The big guys don’t want to play there and you can create a truly unique offering. That is what my startup is doing for Latin America, and obviously I’m biased, but it appears to be a winning strategy.

  33. Jan Douglas

    Very good article and spot on with the challenges from both a user and business perspective.

  34. Chuck Ehredt

    The two main issues I´ve found for travel planning solution businesses is that 1) most customers actually “like” planning a trip to a place they´ve never been (it is part of the trip, builds investment, and if the process is too slick, they feel like they missed something), and 2) most “travelers” really only make this type of trip once per year (frequency is too low to remember which solution you used last time).

    This is a very good article and I wish more people would share their experiences with business building.

  35. Richard Walsh

    Great article, perspective and advice on start-up travel ventures and for entrepreneurs.

  36. Doug Knittle

    Trip planning is a lousy idea. It doesn’t solve a problem, it’s just another version of the problem. It’s time for discovery, finding great all inclusive trips that can be purchased on line, not calling or filling out booking forms on line.

  37. john

    Totally agree with this piece. Even in the B2B2C scenario, depending on business and revenue the model chosen by the startup, the funnel dynamics still apply. With a big partner you could still be left with a tiny percentage of a very large number, but that turns out to be a very small number. Small numbers sadly don’t translate into success on the Internet.

  38. Giuliana

    So why TripAdvisor has so many users, since it’s not really helpful (you have to read hundreds of reviews to have a picture of the hotel, restaurant, etc and anyway most of them are personal, reflect the experience of the guest – so 10 are probably positive and 12 negative)?

    • Nadav Gur

      TripAdvisor was started about 16 years ago and did a brilliant job with SEO at a time when there was relatively little content about hotels / attractions / activities on the web. So they got the a great advantage with CAC over everyone else. The content (reviews) they get for free from users is in high demand and because it is considered impartial, and therefore they have become essential for everyone else in the industry.

      Bottom line is, you can’t start another TripAdvisor 16 years later, just like you can’t start a new Google or even a new Facebook now, even if your product is meaningfully better. It’s a Network Effect business.

      • Madhuri Mittal

        Nadav, very much respect your opinion. Travel planning is a huge field , there are many aspects to it , with many problems that need to be solved. On the flip side of things if we look at it little differently , innovation should continue and people should solve the problems. Of course only the best products will win. If all entrepreneurs cease to innovate in this field , there will be no growth and the consumer will not see any change in the way they plan , book or make travel. May be it will take time for the consumer mindset to change , however good products can make things turn around. I think that the OTAs have conditioned the consumer mind to use travel products in a certain way , however that will change with more interesting products that come whether they are travel plan or booking or post booking.

        • BART BELLERS

          Well said Madhuri.

          Although I have to agree with most points that Nadav raised and that it is extremely hard for Trip Planning to be monetized, I just don’t agree with his conclusion that we should stop trying.
          “Why you should never consider a travel planning startup” reminds me of an article I once read when Microsoft launched Expedia back in 1996 at the birth of online travel.
          The quotes of our industry at that time were similar:
          – “America on the Web: Where’s the Advantage?” : New york Times
          – “We don’t see it as a threat to travel agents,” Chris Privett, American Society of Travel Agents ASTA
          – “I have a pair of scissors, but that doesn’t mean I want to go in front of the mirror and cut my own hair.”

          “Stay Hungry, Stay Foolish” someone once said!
          So travel tech startups, continue to go for it. But yes, do it differently and learn from the failures of others. “I start where the last man left off.” – Thomas Edison
          It says PIVOT or PERSEVERE. It does not say STOP.

          For those who want to read the entire article and have a good laugh at how hard it is to innovate :

        • Nadav Gur

          Just to clarify – I’m all for travel start-ups. Just slightly less naive ones.


Newsletter Subscription

Please subscribe now to Tnooz’s FREE daily newsletter.

This lively package of news and information from Tnooz’s web site provides a convenient digest of what’s happening in technology that drives the global travel, tourism and hospitality market.

  • Cancel