Advice to Travel Startups
03 September 2024
I started my entrepreneurial journey in travel tech over ten years ago. Alas, the travel ecosystem hasn't changed much in that time. If you're working on an early-stage travel startup or considering starting one, my advice is simple:
don't do travel startups!
Or at least, consider it very carefully. Here's why.
If your vision involves reselling hotel rooms or airline tickets, you must connect to aggregators. You will have to pay for the access, and your business will entirely depend on their whims. All more or less successful startups in this niche circumvented the rules of the game (AirBnB, Skiplagged, Kiwi), and you will have, too.
Don't even dream about sourcing inventory directly. Suppliers have little incentive to go direct unless you can bring in significant revenue immediately. Let's face it: it's not your case.
Even going the aggregator route is challenging. They will have you jump through all kinds of hoops and ask for payment upfront. Then, you'll have to integrate their outdated APIs, which they will manually test. If you try anything they don't like, you will be deplatformed, which means they can remove your access to their services, essentially shutting down your business.
Another problem with the business model of reselling travel products you will be sourcing from these aggregators is that you will have to compete for customers with those same companies. They know their PPC game well, and you will pay more for customer acquisition.
You may have met with people from big travel brands, aggregators, or suppliers, and they may have inspired you with the idea that you are getting special treatment and that your project is so unique that your file will be put on top of the pile. Don't deceive yourself. It's their job to make you (and everyone else) feel that way. Be especially cautious of people at travel tech conferences or those with the word "innovation" in their title.
Avoid startup programs (incubators, pitch contests, and such) organized by big companies. They are not doing it for you, they are serving their masters. The best-case scenario is that your business will entirely depend on theirs (otherwise, you will not be tolerated), and then they'd have a carte blanche regarding what they can do to you. Worst case, they will take your idea. Remember, they have a small army of people going to all the travel events where unsuspecting founders spill their beans to whoever wants to listen. Ideally, avoid those events altogether; they are not for dissipating ideas. Usually, it's just a dick-swinging contest for the big guys.
If your business requires a behavior change, look elsewhere. There are better places to execute such feats than travel. The industry evolves extremely slowly, that's why your boarding pass is still the size of a punch card.
Now, there are opportunities in travel simply because travel is all-encompassing. The world is rapidly changing, and new behaviors emerge. We will surely see travel companies that succeed against all odds. So, take all I said with a grain of salt, and, good luck with your endeavors!