The travel industry is one of the most challenging industries in which to start a company. From the highly competitive market for users to the difficulty of finding investment. To start up a successful company in the travel industry, you must not only build a pleasing product that solves an actual problem faced by many people, but you must also also create an especially strong marketing and partnerships plan to build your customer base. The most successful travel startups find a niche that isn’t yet serviced and build the best product possible to fit that category.
Here are five of the most innovative travel startups of 2013 that are doing things right.
HotelTonight is a mobile app for iOS and Android that allows users to reserve hotel rooms at the last minute and at discounted prices. Since its launch in 2010, the company has raised over $80 million.
Why is HotelTonight successful? Because it created its own use case and focused on building the best product to serve that need. HotelTonight co-founder Sam Shank told Entrepreneur Magazine:
Even though there were other companies selling hotels, we were the first to focus on making it easy and convenient to book a last-minute hotel on a mobile device. It created a new use case around people being spontaneous.
Both approaches – doing something better or creating something new – requires roughly the same amount of work. Yet, the benefit of being No. 1 in a category is so much more rewarding.”
In addition to last minute hotel bookings at low prices, HotelTonight offers a best rate guarantee and cash back for snapping pictures of your hotel.
TripCommon is an up-and-coming Web service that focuses on helping you connect with your friends through travel. The site provides tools for three things: seeing where your friends live so you can plan your travels accordingly; creating travel wish lists so TripCommon can alert you about good deals; and planning trips collaboratively with friends with TripCommon’s software, which analyzes the best places to meet when you are traveling from different places around the world.
Speaking with travel writer Monica Suma about going to market in the travel industry, TripCommon founder Gillian Morris emphasized how important it is to build a product people actually need. She said:
If I had a cent for every time I met a startup founder in the travel space who was essentially building something that only they and their yuppie friends would find useful – and even there, only marginally useful – I’d have at least a couple hundred dollars. There’s also a big disjoint between what you think you want and what is actually a pressing need. Do surveys, examine past startups and why they’ve failed (or not) and get something to market as quickly as possible to test your assumptions.”
TripCommon won THack London in 2012 and Morris was named one of PhoCusWright’s 2013 Class of 35 Young Leaders.
Mobiata is a mobile app developer that focuses on helping people travel smart. Acquired by Expedia after two years, the company embodies what hard work, meticulousness toward design, a focus on user experience and a serious concern with usefulness can help a startup accomplish.
The company’s first app, FlightTrack, provided iPhone users an elegant way to track real-time flight information and became the best-selling travel app just days after its launch in November 2010. Since then Mobiata has produced further versions of FlightTrack as well as FlightBoard, an app that turns your smartphone screen into the Arrivals and Departures board of any airport in the world.
In an interview with Concentrate Media, Mobiata founder Ben Kazez commented on the importance of standing out:
In the world of apps, there are benefits to being the first app in a store of 500 apps as opposed to one of many in a store of 500,000 apps. Nonetheless, if any company is going to continue beyond those first couple of months at the app store you have to be successful at making a splash among half a million apps.”
In 2010 BusinessWeek named Kazez one America’s best 25 best entrepreneurs under 25.
Superfly is a service for organizing your frequent flyer, hotel and car rental memberships in one place and using that information to find the best deals for you. The company calls itself the “Mint for travel,” emphasizing that it does all the organizing for you. When you tell Superfly where you are going, it recommends flights and/or hotels based on your loyalty memberships and where you’ve booked before.
In an interview with EyeforTravel.com, Superfly founder and CEO Jonathan Meiri said:
Our service grew out of burning consumer needs related to rewards management and to understanding the value of rewards… We also see advanced search capabilities in other industries, why not in travel? Kayak is simply outdated, it’s not enough anymore to just list the same results for everybody. Travelers have individual preferences and we should incorporate them into search results since they’re part of people’s decision-making process.”
Superfly recently launched an iOS app, Superfly Hotels, for booking hotel rooms based on your memberships. In addition to helping you find the best deals for you, the app scores you 10% cash back on hotel bookings.
Full disclosure: this company is a freelance client of mine. Waymate is a multi-modal travel search engine startup based in Berlin that helps you plan inter-city trips in Europe. The service presents travel methods in a visual timeline of flight, train and car travel options to your specified destination that you can sort by price, duration and other factors.
As David Litwak, founder and CEO of Mozio, wrote in Tnooz, Waymate is a sound model for multi-modal search engines because it hasn’t tried to conquer the entire world at once. Rather, it focuses on one thing only (the niche use case of Deutsche Bahn in Germany) and doing it well.
Kirsty Lee, head of product at Waymate, talked with me over email about the importance of appealing to specific customer needs when building a product. She said:
When you’re building travel products, you need to target your customer very carefully. The business traveler has very different needs and desires than the backpacker – and your offering has to reflect this. Because the travel market is so overrun with different players, customers have a wide range of services to choose from, and they’ll always choose the provider which appeals most to their particular traveling style.”
In 2012, Waymate won the European Commission’s first Smart Mobility Challenge.
Success and Innovation
These startups succeed because they are able to define a broad user problem that isn’t yet being solved by anyone else and build a solution for that problem. I have a good feeling we’ll see these startups make it for years to come.
Editor’s note: a previous version of this article stated that Waymate provided a booking service. Though the company previously allowed users to book travel through its site, this feature was recently swapped out for a lead-based approach.
Besides these five, which tech startups do you have your eye on this year?