Insight and Lessons Learned From Travel Industry Leaders

In a slight break from tradition, this week we’re not going to be delving deeply into the work of a particular travel startup. Instead we’re going to be looking at several in one go, deciphering trends and gaining insight from a selection of people who have been there and done it.

There are a few benefits to this approach. First of all, it means that you, the reader, can learn multiple lessons from a single read. Second, it’ll be interesting to see if startups and established travel operators offer similar answers when faced with the same questions. Is there a consensus? Are there definitive dos and don’ts even with travel businesses operating in different niches?

First of all, let’s introduce the travel companies and individuals that we’ve received comments and insight from:

  • Lujaina Kharusi, founder of Envago – a marketplace app for adventure travel.
  • Matt Mavir, founder of Last Night of Freedom – a popular Stag and Hen trip platform.
  • Mike Lewis, founder and CEO of Trip Historic – an online travel guide for historical sites around the world. 
  • Robert den Hollander, founder of Tripaneer – a marketplace for themed trips, catering to all kinds of travel niches.

The first question we put to our esteemed travel industry leaders was about the challenge. The challenge of building a travel company from scratch and the biggest hurdles they had to overcome in those early days. Unsurprisingly, a few common themes came up. These included building relationships with suppliers, getting noticed and the familiar problem of finding enough hours in the day.

Dealing with time constraints

The first challenge was time. Startups are time intensive, whether or not they are in travel. And when the founding team have day jobs or other commitments, finding the hours and energy to get a new project off the ground can be difficult. That was the experience of Last Night of Freedom founder Matt Mavir.

Back in 1999 Mavir was a self-styled ‘hoody-wearing, cider-swilling student taking business calls in his pants‘. Since then, Last Night of Freedom has come a long way and its growing team has since organised more than 25,000 successful stag and hen weekends.

The biggest challenge in the early days was having a full-time day job and trying to maintain a healthy social life,” says Mavir. “I was 22 years old and the only way around it was to work my way through it. I’d get in from work at about 6:30 pm, have dinner and work on Last Night of Freedom until 2 in the morning.”

The contrast between student life and the working world can be a shock for any recent graduate. “I didn’t completely abandon my mates, but I did have to limit nights out to weekends – and work all of Saturday and Sunday. This was also back in the days when I could still function with a hangover!”

It goes without saying that being able to put sufficient time into your startup is a necessary condition for success. A good idea can go to waste without the resources needed to get it off the ground; time is a fundamental part of that. That’s why plenty of travel industry startups are projects that occur as part of a career change, as was highlighted in our recent interview with Wheels of Morroco.

Getting noticed

One of the common conundrums faced by travel startups is exposure. To begin with, most startups find that traffic in their niche is dominated by enormous marketplaces and long-established contenders. Getting around this is no mean feat, even if your core product is unique.

This is where budget constraints can come in, too. If you don’t have the financial resources to pay for mainstream marketing that will put your brand directly in front of prospective travellers, how do you go about getting noticed? That was the biggest challenge faced by Mike Lewis at Trip Historic.

As he admits, “The biggest challenge for any new site, particularly a travel start-up, was simply getting noticed.”

Lewis’ project is a travel guide first and foremost, but with products to come it’s easy to see how building a global audience could be the first step toward monetising that engagement. Either way, he has faced similar challenges to operators starting up in the hope of selling or aggregating tours and excursions. The key, we’d imagine, has been quality content. Quality content invariably speaks for itself. 

“There are loads of established players out there as well as hundreds of new entrants, up and coming brands and blogs, so it can be hard to break through. At Trip Historic, we focused on our core proposition and the fact that we were dedicated to historic and cultural travel really differentiated us from other travel sites.”

So far, so sensible. But how did Trip Historic get the ball rolling and build authority in the historic travel sector? “

We didn’t have any resources to call in a PR agency, so I just got online and on the phone” – Mike Lewis, founder, Trip Historic

From there it was just about politely but persistently reaching out to people,” he said. “We didn’t have any resources to call in a PR agency, so I just got online and on the phone. I was helped by the fact that so many journalists turn out to be massive history fans. We ended up getting coverage in a vast array of publications and even featured on the BBC.”

Building a marketplace from scratch (and attracting sellers)

The two startups we’ve featured so far faced challenges that will be familiar to many in the industry: gaining exposure and finding the time to get things off the ground. Our next industry leader also had to grapple with a third issue: enticing sellers.

Adventure travel marketplace app founder Lujaina Kharusi started Envago knowing how crucial it would be to get sellers to pitch up in her marketplace. Without sellers, there would be no reason for customers to enter the website or download the app. With that in mind, it’s no surprise that getting the supply side of the business sorted was the most important part of starting up and therefore the biggest challenge.

“Because adventure providers are busy running their business, it was hard getting them to look into Envago and actually register,” she said. “And without them it was tricky to grow the demand side.”

Read more: Building a Travel Marketplace – Pricing Strategy

envago travel industry leaders

Envago

So what was the solution? “I learnt that the best way to overcome this issue was for Envago to list on their behalf,” she said. “It costs nothing for a planner to be listed on Envago, and we transfer all monies to the planner for each booking we take. It works for everyone, our customers have more choice of adventures and planners have a new channel to sell their products!”

Kharusi explains that as well as listing operators for free, Envago supports them with global marketing and PR; a sure way to get on good terms with sellers and populate a marketplace quickly. 

Building the right team

Anyone starting up in the travel industry will quickly realise the importance of building a strong team. From what we’ve seen already it’s clear there are plenty of potential pitfalls and many areas of expertise that need to be covered.

tripaneer travel insight

Themed travel from Tripaneer

Because of that, Tripaneer founder Robert den Hollander suggested that the biggest challenge facing travel industry startups is finding the right people to share in the vision.

“Though finding the right people to join the team is always a challenge – no matter what stage your business is at – it was particularly difficult when we were first starting out,” he said.

This is especially the case when your own investment is on the line. “To start Tripaneer, I had used my own capital, which means I had to be very cautious when it came to spending – and this certainly included operating expenses such as employee salaries.”

“If I were to hire local (in this case Dutch) team members, I would have to spend a big chunk of my capital on this. So, I decided to search for alternatives. The best option I had found was to hire high-quality remote workers.”

Den Hollander admits that this wasn’t necessarily the most efficient way to recruit, but it certainly paid dividends in the long run. “By taking this option, it probably took a little longer for me to find the right people to initially join the team but knowing what I know now, I believe that it was the right step,” he said. 

“It allowed me to not only hire quality candidates who were less costly than if I were to hire locally, but also to invest my resources in developing our first set of travel theme websites.

Insight: What’s changing in the world of travel?

People want to personalise their travel plans

We like to look ahead here at Travelshift – whether that’s how different technologies will be used in the industry or how new trends are shifting the landscape. One recurring theme that we’ve seen in our interviews with industry leaders is the increasing level of customisation tourists are demanding.

On the one hand, this is because increasingly immersive travel is becoming increasingly trendy. Travellers want something memorable; a more personal experience. On the other hand, this shift is a result of the availability of choice. With marketplaces such as Last Night of Freedom offering a huge variety of destinations, accommodation and activities, groups can (and now expect to be able to) tailor their trip to the max.

travel industry lessons from leaders

Last Night of Freedom

Generic no longer cuts it, as Last Night of Freedom’s Matt Mavir explains: “Everything is becoming a lot more bespoke – no-one is happy these days with a generic three-star hotel and unnamed activity centres.”

As a result, he says that the company has shifted to “bring far more info upfront”, increasing the ways in which revellers can adapt their trips to suit their needs.

The rise of augmented reality?

We’ve written at great length in the past about augmented reality and virtual reality, as two hot technology trends that could have a real impact in the travel industry. Virtual reality, in particular, could revolutionise the way hotels and resorts market their destinations. It could even give tourists a feel for a site or activity before they arrive.

There’s no doubt that exciting opportunities lie ahead, especially as the technology continues to develop. Trip Historic’s Mike Lewis is certainly an advocate for mixing the past with the future, and has plans to introduce augmented reality in his company’s experiences.

insight from travel leaders

Trip Historic has plans with Niantic, the augmented reality gaming company responsible for Pokemon Go.

“Augmented reality is a very exciting technology for us,” he said. We work quite closely with a couple of different teams at Google and have already worked with them on a Google Glass app which aimed to bring the classic guided walking tour into the 21st century.”

It’s easy to see how a little technology could bring a historic tour to life. Just imagine glancing through your smart glasses and suddenly being transported to medieval Paris, or watching as a famous battle unfolds before your eyes.

Lewis admits that previously the technology hasn’t quite been capable of offering what he envisions. “But the idea of augmented reality fits our content perfectly and we believe it’s the next natural step for travel tech experiences.”

And it seems there’s big news on the horizon: “We are lucky enough to work with one of the most cutting edge companies exploring this technology at the moment – Niantic Labs, creators of Pokémon Go – and we’re working with them on their flagship Field Trip app,” he confirmed. 

Adventure travel and far-flung destinations

Envago’s Lujaina Kharusi has built a business based on one of the travel trends that we’ve highlighted before: the unrelenting desire for adventure.

Adventure travel offers many of the things the modern tourist is looking for: fun, immersion, memories and adrenaline.

The adventure sector grew by 23% in 2015 alone and according to a report by Skift, operators in this niche have reported an average of $3,000 spent per person and an average trip length of eight days. Big.

“Envago is built on perhaps the biggest of all emerging travel industry trends- the rise in adventure travel,” said Kharusi. “In particular though, I am interested in Eastern European markets such as Croatia, Bosnia, Ukraine, Kazakhstan, and Georgia. They have spectacular nature that allows you to do many outdoor activities at reasonable prices.

She also suggests that adventure tourism will soon hit Africa in a big way, with Kenya, Tanzania and Rwanda likely to be the next popular destinations.

The rise of remote workers

Traditionally, people have taken holidays during the summer and winter breaks. This is especially the case for families with children and school term times to cater to.

But aside from the conventional family unit, the dynamics of travel timings are changing. This is partly down to the rise in remote working. In an increasingly connected world, rigid work days and office-based 9-to-5s are growing more scarce and more needless.

remote working is a travel future trends

Remote working is on the rise – who needs an office?

If you can work remotely, typing at your desk in the office seems unnecessary. The result is that people have more freedom to blend travel with work, blurring the lines between work, play, holidays and office hours.

This trend will have an obvious impact on the travel industry, according to Tripaneer’s Robert den Hollander.

“With the rising trend of remote working, we are hoping that more and more people will not be tied down to certain holiday schedules in order to determine the ‘right’ time to travel,” he said.

“This means that more people will have fewer constraints when it comes to planning their next holiday destination. They don’t necessarily have to fit their travel within a certain schedule, as they have the ability to take their work with them while they are on vacation.”

We are hoping that more and more people will not be tied down to certain holiday schedules in order to determine the ‘right’ time to travel” – Robert den Hollander, founder, Tripaneer.

In terms of how this could affect travel operators, “there’s a likelihood that travel will increasingly become a year-round activity with the demand for travel packages – including theme travel – is less likely to be affected by seasonality.”

One final piece of advice

Our final question to each of our industry leaders was a simple one: If you could give one single piece of advice to people starting up in the travel industry, what would it be?

Choosing your niche and sticking to it… (to a point)

As a provider of travel marketplaces, we like to think that we have some expertise when it comes to choosing a niche. After all, the first application of our marketplace software in Iceland has had incredible success.

“Pick your niche. Then decide how you’re going to do things differently and how you’re going to add value to an already crowded marketplace, and, then, formulate your mission statement.” – Matt Mavir, founder, Last Night of Freedom

But having a focus doesn’t only apply to setting up marketplaces.

Our industry leaders also highlighted the importance of having a target in mind when you setup, both in terms of customer and in terms of product. Clearly that relentless focus is vital, but it shouldn’t be so rigid that change isn’t possible when things aren’t working out.

Last Night of Freedom’s Matt Mavir has built a business on top of a very particular travel market. “Pick your niche,” he said. “Then decide how you’re going to do things differently and how you’re going to add value to an already crowded marketplace, and, then, formulate your mission statement.”

“Work ruthlessly, unapologetically and tirelessly to achieve it… But, also have the awareness to know when things aren’t working and when it’s the right time to pivot or cut the bait.”

It makes a lot of sense to set up a travel company with a clear target market and focus in mind. The same can be said of any business. When starting out startups need to work with conviction, belief and focus. But if things aren’t working out, they have to be prepared to pivot.

Envago’s Lujaina Kharusi agrees. Travel startups (particularly marketplaces) should “focus on one or two markets and give the best experience possible.”

The sentiment towards customer experience is an important one. If you’re not focusing on crafting an offering that gives your first customers the trip of a lifetime, how can you ever hope to inspire loyalty and gain recognition? 

Creating new products to add value to a travel marketplace

We’ve spoken before about how travel marketplaces need to create value to appeal to customers. Enticing offerings are all well and good, but packages and new combinations of services and products are what travellers want. In the case of Last Night of Freedom, the company has gone one step further.

As well as organising bespoke Stag and Hen trips, they have also become the UK’s largest supplier of Stag and Hen costumes and accessories.

It’s a move that’s both smart and obvious. In one swift the company has become a one-stop-shop for stag and hen party organisers; the ultimate in bachelor party convenience.

Envago has a similar level of originality. Everything from trip browsing to purchase is done through an app – perhaps as a nod to the fact that more and more travel bookings are being made through mobile devices. This adds a layer of exclusivity and ease to the Envago service.

The platform also offers a connected group chat for travellers booking the same tour, so they can get to know one another before arrival. Nice touch.

Persevering and not being afraid to hear the word ‘no’

More travel startups close down in the first year than go on to be successful, but the key is in having a strong foundation and a proposition that customers will buy into. With that in place, the world is your oyster – providing you’re willing to overcome setbacks and persevere.

Trip Historic’s Mike Lewis points out that “if you have a strong proposition, the barriers to entry are actually remarkably low.”

triphistoric founder mike lewis offers insight and lessons from travel industry

Trip Historic

“Before the internet, if you wanted to launch a new publication or business, you needed deep pockets and serious infrastructure. Nowadays, anyone can simply throw up a blog, launch a new site or fling themselves into the YouTube generation.”

Just as important as that proposition is the persistence to follow it through. “When it comes to making an impact,” he says, “you mustn’t be afraid to shout about it and just reach out to journalists and companies large and small.”

“You don’t need to be a well-established brand with an army of staff to get noticed. If you’re offering something unique with a quality product then there’s no harm in reaching out to the biggest companies in the world – the worst they can do is say no.”

You can always afford to be selective with your staff

Sure, expertise comes at a premium. But bear in mind the rise in remote working, freelancing and the potential open doors to employees offered by sites such as Upwork. All of these mean that it’s easier than ever to build a team of quality individuals – whether you’re looking for a freelance writer, marketing experts or a remote sales force.

It also means that you can work with people on short-term contracts until you find the right individuals to keep on for the long term.

Tripaneer’s Robert den Hollander agrees: “Be selective when it comes to recruitment, as your employees are your greatest assets. It’s important that when you are looking to hire team members, you should be evaluating their values and character as much as their skills and competencies.”

“Though it may mean that you will need to invest more time & effort in the short-term, in the long-term, you’ll likely to reap the rewards.”

A travel startup is nothing without a committed and motivated team pulling in the same direction. “If you take your time and hire the right people, you’ll have the support you need in accelerating your business’ growth and success.”

That’s all, folks

Thanks for reading our collection of lessons and insight from travel industry leaders. We’re committed to helping ambitious startups get ahead. That’s the main reason for this post; we like to do our bit to help the community!

travelshift-logo-blue-horiz-small-2x

In case you didn’t know, we also help the travel startup community in more tangible ways.

Our proven marketplace software helps travel startups build a successful online platform from scratch. Our proprietary solution combines SEO, community-driven content marketing, localisation and much more – giving you all the tools you need to aggregate suppliers in your chosen niche and start a thriving travel business.

Get in touch with us today to find out more – or read more about our software solution.

Thanks again to Lujaina Kharusi, Matt Mavir, Mike Lewis and Robert den Hollander for sharing their insight and experience with us and the travel community.

In-depth with Wheels of Morocco

Every so often we try to arrange interviews with inspiring travel startups from all around the world. Our industry is colourful and diverse and these type of pieces are a great way to explore that diversity. Having said that, many of the challenges and pitfalls faced by travel startups are the same across the board.

Our deep dives are a chance to learn from the experiences of others working in travel. We hope they’re interesting and insightful, too!

This week we’re featuring Viktoria Barsony, co-founder of Wheels of Morocco. As the name hints at, Wheels of Morocco offer motorcycle tours around Morocco, giving intrepid travellers the chance to explore the country on a two-wheeled adventure.

The company launched in January 2016 and only started taking bookings in March last year, so it’s still very early days for this adventure startup. But that doesn’t mean we can’t take a closer look at the how and why behind the way things are progressing.

The key to Wheels of Morocco is the destination. Although motorcycle adventures will appeal to a certain audience no matter the location, Morocco is a country that ticks all of the scenic boxes. As Viktoria explains, it’s an amazing country that has everything you’d need for an incredible motorbike tour: beach, mountains, desert, forests, all of which you can visit in the space of 10-14 days.

This setting makes for an ideal motorbike tour. It allows riders to really feel like they’ve travelled as the landscape around them changes dramatically and in quick succession.

As we’ve written about before, a growing trend in the industry is that tourists are looking for more immersive trips than before. They want to genuinely experience a country and culture, not just lay on a beach and top up their sun tan.

Just as food tourism offers an authentic travel experience – which we explored in a separate in-depth interview with Foodie & Tours – There’s something equally liberating about hitting the open road, not knowing exactly what or who you’ll be coming across.

The Importance of Experience and Passion

Setting up a niche travel / tourism service isn’t easy. To genuinely appeal to travellers you need to show that the experience, knowledge and passion you have for what you do is unparalleled – especially when you’ve only just started operating.

It’s fair to say the Viktoria and her partner Greg have this in abundance. “We had been living in Morocco for about 3 years when my husband’s expat contract came to an end last year. We had the choice of moving to another country, but the whole family wanted to stay in Morocco,” she says.

“As we have travelled extensively [around Morocco] in those 3 years, we knew this amazing country and thought that other people would love it too, especially on a motorbike. We started the pre-work in January 2016 and got our first bike and client in March 2016.”

Travellers need to be convinced to part with their money. That’s always been the case, especially when an adventure or excursion is involved. The fact that Wheels of Morocco has already got its business off the ground says a lot about the strength of its appeal. Effectively portraying knowledge and expertise alongside the product has been vital in that progression.

Finding a Niche

There’s no doubt that Wheels of Morocco has successfully found a niche to cater for. But the company has cleverly selected products that are niche in terms of the expertise you need to run them without being unappealing to the majority. For example, it takes a lot of local knowledge, logistical skills and specific qualifications (Greg, Viktoria’s husband, got his BMW ITA Certification last April) to get a business like this off the ground. It’s not something everyone could do. But the result is a range of tours that many, many travellers will find appealing.

Considering setting up your own travel business? We’ve written extensively on finding a niche for your travel marketplace.

The widespread appeal Wheels of Morocco has is there to be seen in the diversity of its clients. “We’ve had many English, American, Canadian, Israelis, Australian, Swiss, Turkish, German, Italian and Hungarian clients, so I guess it doesn’t depend on nationality. It’s more about the passion for travelling motorbiking. We have touring clients from the age of 28 to 68, said Viktoria.

wheels of morocco tour motorbike

Dealing with the unexpected

The challenge of running tours built on a two-wheeled adventure is the number of things that can go wrong. “The biggest challenge,” Viktoria says, “is when a tour is on the road. Because no matter how amazing and well-prepared the tour guide is (he is trained in first aid, can change tyres on the spot and repair the bikes) there might be unpredictable problems. An accident, (replacing an imported side-pannier in the middle of the desert is no mean feat); crossing the most amazing passes in the Atlas mountains above 3000 meters but 40 cm snow has just fallen the day before…”

When the unexpected happens, Viktoria and Greg need to re-plan the remaining days, in terms of hotels and the itinerary.

Thinking on your feet and dealing with whatever comes adds to the sense of adventure, and is probably one element that motorbike enthusiasts enjoy with a tour of Morocco. But it’s still important that the team has backup plans in place.

Marketing and Recommendations

You might think that small travel startups struggle to compete with major operators. And that the big travel businesses dominate online traffic. You’d be right. But it’s still possible to cut through the noise, especially if you are targeting a niche market and localising your content.

Viktoria admits that Wheels of Morocco’s marketing efforts have been varied so far, “testing different channels, print media, online banners, PPC advertising, Facebook and Instagram ads. We are having promotional offers, email newsletters, and we are in collaboration with travel journalists.”

As with all startups, it will be a case of refining the marketing strategy to focus on the channels that are most effective. Something the company can definitely rely on though, is positive reviews. As well as leading to repeat business, a bunch of 5-star ratings and positive feedback is incredibly effective at pushing new sales over the line.

The Future

Because we approach things from the marketplace mindset, we couldn’t help but ask Viktoria whether or not there were plans to expand the company’s products to include tours outside of Morocco.

wheels of morocco

The answer, understandably, was no. Expansion at this stage would risk the loss of what makes Wheels of Morocco such an appealing prospect for tourists: local knowledge, expertise and a family-run business. “As we are living here, we have specialised Morocco knowledge and I think that the best thing to do is to keep on offering this unparalleled expertise and knowledge of this country. We are offering tours that no other motorbike touring companies are doing in Morocco and that’s only possible because we are here all year, know the actual road and weather conditions and have tested all the hidden passes and roads.”

Inspired to go on a motorbike tour of Morocco? Visit the Wheels of Morocco website to find out more.

Travelshift’s 2016 Highlights

As 2017 gets underway, we thought it would be a good idea to allow ourselves a moment of nostalgia. 2016 was a big year for us here at Travelshift: The growth of our readership has been immense and our marketplace software has begun to help travel startups all around the world.

With that in mind, we thought it would be a good idea to round up some of our favourite stories from the past 12 months. From Trump to Brexit, to Pokemon Go and Leicester City’s unlikely Premier League win, we’ve proved that there is no subject we can’t wrangle into a travel or startup-related story.

So here’s our top five stories from the last year.

What a year it’s been in the world of politics. As well as the vote to leave the European Union from Great Britain, we’ve also seen the rise of Donald Trump in the USA. Both will take full effect in the months and years to come, but there’s no doubt that there will be an impact on the travel industry.

donald trump travel industry affect

We’ve also seen the impact the darker side of politics has had on the industry, as we discussed in our Travel industry Hit by Terrorism and Political Unrest article.

As a business, we work on the boundaries of tourism and technology. Our marketplace software takes advantage of the latest techniques to help travel startups compete with established operators. For that reason, we like to look at other technologies in the world of tourism. This piece focused on artificial intelligence. We also had a look at general tech trends in the travel industry.

artificial intelligence could impact the travel industry in a big way.

We don’t only write blogs about travel industry news and future trends. Sometimes we like to focus directly on those that our company was built to serve: Travel startups. This post concentrated on the art of team building and features tips on startups should construct a team. It includes an interview with Rocketrip founder Dan Ruch.

content marketing startup

As you probably know by now, we like to look ahead to the future. Of great importance to the travel industry is how the next generation of travellers, Generation Z, can be best appealed to once they come of age. We’re already aware, in general terms, of what they are interested in and how they react to certain mediums. With that in mind, we put together a few ideas that travel startups can start thinking about for the next batch of young travellers.

generation z is coming. Is the travel industry ready?

Last year we started out our ‘Gap in the Market’ series. The idea is that every so often we hone in on a particular travel niche and take a closer look. There were plenty of personal favourites, including in-depth looks at the worlds of cruise, corporate and wellness travel, but we especially enjoyed our deep dive into food tourism. This piece also featured an interview with Hugo Palomar, founder and CEO of Foodie&Tours.

food tourism

We hope you enjoyed our blog throughout 2016 – here’s to many more!

How to Choose a Travel Marketplace Niche

It’s likely that if you’ve decided to build a travel marketplace, you already have a niche in mind that you want to target. But maybe you haven’t gone about it that way. Maybe you just want to break into the travel industry, figure a marketplace is the best place to start, and are looking for some inspiration and guidance on what to do next. If so, you’re in the right place.

It goes without saying really: Choosing the right travel niche for your marketplace is going to be fundamental to your business. So how do you go about making the big decision? Do you set up in a niche that you know well? Do you take on a market with few competitors? Do you focus on a particular country or tourism sector? The possibilities really are endless.

Five factors to think about when selecting your travel marketplace niche

Here are some things to bear in mind as you go about choosing the focus of your travel marketplace.

Knowledge is power

As with any business, knowing the industry you want to work in and understanding the kind of customers you are trying to appeal to is absolutely crucial. Let’s say you want to set up a marketplace dedicated to travel in France. Do you know the country, have a good idea of its appeal and understand why tourists go there? If you can’t answer these questions positively, you might want to reconsider.

Going one step further, choosing a niche that you already have experience in is usually a good idea. If you’ve worked in the travel industry before, you may have contacts in a certain niche already. Filling up your marketplace with sellers is going to be one of your biggest challenges. Sure, you can reach out to vendors and entice them in, but if you already have a strong network, it’s a no-brainer.

Don’t underestimate enthusiasm

At the foundation of your travel marketplace is you and your team. As with any startup, there are going to be ups and downs, moments when everything feels like it’s against you, and times when you will wonder what on earth you signed up for. This is to be expected, especially in the world of travel.

Setting up and scaling your marketplace will be your biggest challenge, so enthusiasm and a willingness to go the extra mile will definitely come in handy. So how does this tie into which travel niche you are going to select?

Well, you should set up a marketplace in a niche that you’re passionate about – a market that will inspire you to get out of bed on the bad days.

Read more about team building in the travel industry

There are also some technical specifications that you should look for in any potential travel market niche…

Competition is a good thing

As a travel marketplace, competition among providers is what brings value to your platform. If there is plenty of choice for customers and vendors are fragmented, the aggregation you offer will act as a magnet.

Ideally, you want to set up an online marketplace in a sector where there are plenty of operators and customers. Choose a niche where competition is limited, and you may have difficulty persuading vendors to share their profits with you and set up in your marketplace.

Of course, if there is competition in terms of other marketplaces, you may want to assess things more closely. Other marketplaces in the niche you are considering suggests that the marketplace format is viable – it’s up to you if you want to compete and become the marketplace in that niche.

Is there any loyalty?

It’s well established that loyalty is increasingly hard to come by in the travel industry. Luckily, this is where the value of a marketplace comes to the fore. If travellers used the same operator every time they arranged a trip or chose a tour, aggregating agencies together would be pointless.

Your task is to build a marketplace that inspires loyalty by offering the best of what is available in your chosen niche. So think: Does your niche have a particularly high level of loyalty compared to travel in general? If you’re wanting to aggregate food tours or excursions, perfect – people tend to do them once and move on. Zero loyalty. Accommodation, on the other hand, might be a different story.

Do you fit into the transaction?

When buyers and sellers use an online marketplace to exchange money for goods or services, things are happening in the background that wouldn’t be in the real world. We all know that marketplaces make their profit by handling the transaction and giving vendors their portion of the revenue with the necessary fees automatically deducted. Vitally, for both sellers and buyers, fees are easy to tolerate when that money was never really present in the first place.

So how does this impact upon which travel niche you choose? Well, first of all, are your end customers used to going through a third party for the service or products you’ll be offering? Are the vendors in your niche working with profit margins wide enough to give you room for commission? For more information on this, read our post on building a travel marketplace pricing strategy.

choosing a travel marketplace niche

Selecting a travel niche doesn’t have to be a leap of faith. There are plenty of things to consider first.

How big is the opportunity?

If this sounds obvious that’s probably because it is. But still, it needs to be said.

How much potential is there in your chosen niche? For sales right now and for sales 6 months, or even 6 years down the line? You don’t need a crystal ball to make an educated prediction. Setting up a marketplace in the travel industry with your eyes closed isn’t a good idea. You need to know the market, the changing attitudes of your would-be customers, and the potential for sales and growth

A proper analysis of these factors should be the foundation of your business plan before you get started. This is also a good point at which you can set some goals. How much of the market captured would stand for success in your opinion?

Vitally, you need to make these predictions with one crucial factor in mind: Your marketplace. The best travel marketplaces, across countries, niches and sectors always always always create new value. This might be encouraging vendors to offer combined deals, special offers and out-of-season trips, or devising your own products through picking and choosing the best bits from your sellers.

To thrive you’ll need to do more than simply offer a platform for the goods and services of others. Because of this, the current market size doesn’t necessarily reflect how big an opportunity your niche really is.

The frequency of sales

Some travel niches are always going to be held back because it’s in their nature. Honeymoons for example. Or skiing trips. Honeymoons (if all goes well) are only going to be bought once per person at the most. There’s not going to be much in the way of return buyers or repeat business. Skiing trips tend to work on a seasonal basis, so sales are not going to be made all year-round.

When choosing your travel sector, it’s important to think about the frequency of sales, and preferably select a niche that will allow you to do repeat business 365 days a year. That’s not to say that super-niche, seasonal or one-time product marketplaces can’t be a success. But startups tend to rely on regular revenue streams, so perhaps that’s something to look at further down the line.

Plenty of marketplaces go under because they target purchasing cycles that are too infrequent. As well as hitting your revenue stream, this kind of niche makes it more difficult to build brand awareness through word of mouth.

As we mentioned above, the best travel marketplaces will grow their chosen sector and create new value. Why not encourage your sellers to offer a certain tour all year round, or introduce some special out-of-season packages?

choose a travel marketplace niche

The world of travel is full of the unexpected. We can help make sure you’re as prepared as possible.

Where Travelshift comes in

So, you’re probably wondering why on earth we’re giving away this valuable travel industry information for free. Well, in case you didn’t know already, here at Travelshift we build marketplace software and platforms that really work. Just take a look at the case study of our now booming marketplace for travel services in Iceland. We take care of all the technical stuff in the background – all you need is a travel niche, a willingness to build contacts in that sector, and no small amount of dedication.

Once you’ve got all of that covered, feel free to get in touch.

Travel Marketplace Pricing Strategy – Where to Start

Deciding on a pricing strategy for your travel marketplace is at the very centre of your business model. It’s what will define your platform in the long run, and most importantly, your relationship with customers and sellers going forwards.

To begin with, let’s take a closer look at what you need to consider before potential revenue streams are even put on the table.

What you need to consider when developing a pricing strategy for your marketplace

Marginal costs

Before you place any pricing strategy in place, it’s vital that you understand how your sellers are making money and what kind of profit margins they are working with. Setting your commission at an acceptable rate is going to be key to attracting and retaining sellers as you get started.

Generally in the world of travel, profit margins are thin because the competition is so fierce. Your sellers are likely to have plenty of overheads. Food, booking fees, transport, local taxes, excursions and accommodation can all be packaged together in a single product. So in other words, it’s likely that your sellers will not have a huge profit margin that you can freely skim from.

So the key takeaway here is preparation. If you want to attract tourism sellers into your marketplace, you’re going to need to understand how they work, where they make their profit, and how much commission is going to be acceptable from their end.

Competition

As well as having a good understanding of your vendors’ profits, other competition is going to go a long way to defining your offering to prospective sellers. Sure, you can set a 40% commission rate on transactions, but if there are other marketplaces out there providing the same service for half the fee, you’re not going to get anywhere fast

Take the time to understand the sources of your sellers’ sales. Do they have arrangements with other marketplaces? Do they only sell through their own website? Do they only have a physical presence, a store that people walk into? The answers to these questions will give you a firm understanding of your sellers’ methods of distribution, and will inevitably help to shape your pricing strategy.   

Network effects

The term ‘Network Effect’ refers to the idea that a marketplace becomes more valuable to its users as it grows bigger. In travel, it’s easy to see why this might be the case. Accommodation services such as AirBnB offer the perfect example. More accommodation across more countries and cities gives a greater amount of choice to customers and therefore the platform becomes more valuable. More choice inevitably means more visitors to the platform, which, in a nutshell, is why strong network effects can justify higher commission fees. If your potential sellers will benefit from joining an expanding marketplace, they’ll be willing to pay for it.

network effects impacting your travel marketplace pricing strategy?

How will network effects impact your travel marketplace?

In the world of travel services, the benefits are not so clear for your prospective sellers. Sure, if you can offer them a huge amount of exposure then they will be willing to accept a high rate of commission, but if throwing them among a bunch of their hottest competition actually loses them sales, they may not be so keen. Every marketplace is different, and you need to decide how the structure of yours will impact upon potential sellers.

Getting down to business

Let’s suppose that your travel niche has been chosen. Now you need to approach potential sellers with an offer that monetises your marketplace without discouraging buyers or sellers.

Let’s take a look at your options. With travel marketplaces, the platform operator will generally produce revenue from the seller’s side. Customers are unlikely to accept paying for simply locating and facilitating travel and tourism services, while vendors understand that positioning themselves in front of your audience is worth paying a price for. On the other hand, attracting a good range of sellers is key to getting your marketplace off the ground. The amount of commission and the way that it’s taken need to be carefully thought through.

So how can you devise a sustainable pricing strategy that doesn’t alienate sellers or customers while driving the growth of your marketplace? Let’s take a closer look at some of the monetization models you can employ on the seller side without ruffling too many feathers.

The big question: Charge per transaction or per listing? Or both? 

So first up we have the transaction fee, which is as simple as it sounds. Every time a seller completes a transaction on your platform, the marketplace takes a small percentage. This is considered acceptable by most vendors, as they only incur fees when they’re actually making money, and can adjust their prices to account for the commission. Because of this, it doesn’t feel like they are out of pocket at any time. On top of that, the customers don’t see all of this happening in real time, so won’t therefore be put off by perceived price hikes. 

Transaction fees have a few obvious benefits. First of all, they encourage vendors to join your marketplace. Or rather they don’t dissuade vendors by charging upfront or requiring a registration fee. Secondly, your suppliers carry less risk because they only pay you when a sale has been made. The last thing vendors want is for their products to sit on your platform and burn a whole through their pocket if the sales dry up.

The transaction fee model also scales nicely in the travel industry. The more trips your vendors successfully sell, the more your revenue increases. Everybody wins.   

The difficulty comes in deciding what rate of transaction fee to go for. A small percentage is a good place to start, but you may want to arrange separate deals with each of your sellers, depending on their profit margins, the products they are selling and the quantity they are likely to sell through your marketplace. The bottom line is simple: If you can afford to offer a bespoke transaction fee to each of your sellers that takes into account all of these factors, you’ll be in a much healthier position going forwards.

So with all of that in mind, why would you even consider listing fees, which would hit all of your vendors before a sale is even made?

Well, if vendors only need to pay to list items, they are free to rake in the full amount from sales, and are therefore encouraged to offer as many options as possible to your audience. On top of that, listing fees can help to ensure that your marketplace is only populated with quality, well thought out products. Sellers that need to pay to list on your site are more likely to create convincing, well-written listings. That can only be a good thing from the customer’s perspective.   

To bring in extra revenue from the listing fee model, many marketplaces offer extra things to sellers to give them an upper hand. These features might include a highlighted listing or pride of place on the homepage. If you serve a big enough market these add-ons can be lucrative.

Of course, you could charge per listing, in an effort to keep the quality of listings high, and per transaction. But this double-edged approach, although convincing on paper, may cause potential vendors to baulk and take their business elsewhere. Perhaps it’s only something that should be introduced once your marketplace is established and has a clear offering to propose to vendors.   

Finding the right pricing strategy

So you’ve decided to charge per transaction or per listing, or maybe a devilish combination of the two. But how do you go about selecting an appropriate pricing strategy? Even if you’ve chosen a niche in the travel market that isn’t fully catered for, there’s still going to be an element of competition. Because of this, your marketplace needs to offer value to vendors, not simply be an expensive addition to their sales network.

Intuitively, it might seem as though you need to make as much money as possible from every transaction in your marketplace. You’re running a business after all, so that instinct is understandable. But travel marketplace owners have to be aware of how a pricing strategy will impact things in the long term.

What could happen if you set your rates too high?

Well, to begin with, you’ll quickly undermine the whole point of having a travel marketplace. Remember that an excessive take rate will always, inevitably, find it’s way to the travellers you are eagerly trying to service. It only takes a little jump in prices across the board for your marketplace to become untenable for sellers and, by association, too restrictive for customers.    

For that reason, a high rate of commission will be hugely damaging to your hopes of keeping up supply and attracting fresh buyers and sellers. Fees that are too high will encourage your vendors to look elsewhere, and your platform will, even if operating in a carefully chosen travel niche, become vulnerable to competitors with lower rates.

There is no right answer

Strictly speaking, that’s not really true. There is a right answer, but there is certainly no one-size-fits-all solution to setting up a marketplace pricing strategy. To hit the sweet spot with your vendors and still make a profit yourself, you’ll need to understand how they operate, where they sell, and what kind of prices they can tolerate before selling through your platform becomes too restrictive.

To begin with, driving supply has to be your priority. For that reason, it’s best to err on the side of caution and keep fees to a minimum as you get started.

Whether you go for a transaction fee or a listing fee, you’ll need to build a marketplace that can offer an efficient, valuable platform to vendors and customers…

That’s where we come in

Travelshift software is a proven travel marketplace solution to get you started in the industry. Essentially, we’ve done all of the hard, (often tedious) and technical work for you. All you need to do is plug in your vendors, devise great content, and build an engaged community of users. Have a closer look at our product here.

Building a Strong Team is Vital for Every Travel Startup

We’ve been writing this blog for a while now, and though we’ve looked at the ins and outs of the travel industry and the intricacies of how technology and global trends are changing tourism for the better, there’s one topic that we haven’t covered yet. Although it’s vital to every single travel startup out there, the notion of team building, of bringing together the right individuals to carry your ambition forward, is not something that’s widely discussed. Today we want to put an end to that.

So what makes for the perfect team at a travel startup? How important are the individual components in the context of the whole? How do you go about choosing the right people to join you on your journey to the top of the travel industry? These are the questions we’ll be delving into today.

The importance of a great team in the travel industry

Normally, successful startups require dedicated staff willing to go the extra mile when necessary. In the travel industry things are no different. There’s a reason that the majority of startups fail within the first two years: Setting up a new business is fraught with risk and potential mishaps. In the world of travel and tourism – which is cutthroat enough at the best of times – this point couldn’t be more pertinent. Customer loyalty is increasingly non-existent and online competition is fierce, so a strong group of individuals is key to ensuring that your startup stays on the right track.

Travel startup team build

Rocketrip

We spoke to Dan Ruch, founder of business travel startup Rocketrip, to gain some insight into the importance of a solid team when setting out in the travel industry. With Rocketrip, companies can empower employees on corporate trips by giving them a real-time ‘Budget to Beat’ and motivating them to save. This helps to keep travel costs down and gives businesses more control over their expenses.

So, what does Ruch look for when hiring new staff? Interestingly, he suggested that having experience in the industry isn’t a defining factor. Instead, it’s more about the personal qualities that a candidate can bring to the table. “Travel industry experience is less important than other attributes,” he said. Those other attributes being “a willingness to collaborate, a great work ethic, and imagination.”

travel industry building a great team

It takes a strong team effort to hold a steady course in the travel industry.

This is something that chimes with an interview we conducted recently in our in-depth look at corporate travel, with Beewake co-founder Jeremie Catez . He said that “in any corporation, but even more importantly in a startup, the team is the key to success, the same as in a relationship. Good teamwork is essential in all organisations. It signifies that people are working towards a shared purpose and common goals and in so doing they are sharing their varied skills in complementary roles and in cooperation with each other.”

Another point that Ruch made was the importance of a philosophy, of a shared goal and a team willing to invest their time and skills to make it a reality. Any startup team is going to be relatively small to begin with, so it goes without saying that each individual needs to understand what is expected of them and contribute to building positive momentum. “Conviction is one of the most important traits to look for”, said Ruch, “because at any startup, there will be plenty of long hours, moments of uncertainty, times when everyone’s stretched thin. Belief in the company and in the team is what gets people through these challenges.”

And one final factor in building a great travel startup team? According to Rocketrip founder Dan Ruch, it’s flexibility. Startups require a unique blend of people, and while Ruch emphasised the need for commitment and creativity, we liked his suggestion that “a willingness to take on new responsibilities” is vital, too. As travel startups grow, it’s only natural that job roles will evolve, so staff need to be adaptable and prepared to step up and try new things when needed.

Building the perfect travel startup team

team build travel startup

Build a great team at your travel startup

Get staff you need when you need them

In a classic Forbes article, Josh Steimle suggests that the two most important factors for building a startup team are identifying the areas you need filled and prioritising the order in which you fill them. Certain roles, such as sales and marketing, can overlap to an extent, so it might be a good idea to “find one person to take on multiple roles, at least initially,” he says.

He makes the important point that sales should be your priority. No travel startup is going to get off the ground without them, after all. “If I’m not bringing in deals, I have no reason to hire anyone else,” he says. Who comes next after a strong sales team depends completely on the situation at hand and the market you are targeting. It may be that you need someone to cover SEO, PR, or social media. If the sales are still flying in, that team might need to be expanded.

Have a meticulous hiring process

Your travel startup is your baby, the result of an idea that you’re passionate about and desperately want to succeed. Clearly, you shouldn’t take hiring lightly. So what does that entail then? Well, for a start, you’re probably going to have to interview multiple candidates every vacancy that you advertise. But just interviewing a bunch of people isn’t going to be enough. You need to interview them properly. You need to put them in different scenarios to see if they will suit your team and are a good fit for your startup.

Remember: Interviews don’t have to be formal. They don’t even have to be interviews. Just having lunch and getting to know each other, emailing or calling with a few questions – all of this can be part of an informal but thorough process. In short, you’ll probably want to spend a few hours with a potential addition to your team before you seal the deal. Depending on the role, it’s probably wise to give them a short test, too.

Why not consider freelancers?

Have you considered taking on some freelancers as part of your startup team? Freelancers offer the flexibility to suit your ever-changing startup environment. You can utilise their skills as and when you need them, developing strong working relationships with skilled professionals without having to commit to a long-term contract. For travel startups on a strict budget, freelancers can be invaluable.

Hiring a full-time member of staff at a startup is a big commitment. It also represents a risk if things don’t work out, or if you invest time and money in an individual who quickly begins to feel unsettled and wants a move elsewhere. On the other hand, if things don’t go so well with your freelancer, nobody has to get fired – you simply don’t call them again. Dynamic travel startups might be best advised to make use of contractors until there is a definite need for someone permanent in that position.

Having said this, freelancers, by definition, might not buy into your startup 100%, as they may be working with other clients and on other projects at the same time. If you want someone flexible but on board for the long run, you’ll have to search hard for a freelancer willing to stick around as you grow.

Flexible employees are relatively easy to find, with sites such as Upwork and PeoplePerHour connecting skilled freelance writers, developers, marketers and much more from all over the world. It’s up to you to discover the perfect fit!

Building a successful team doesn’t end with the hire

So you’ve put together the perfect team and you’re satisfied that all the component parts are in place to provide a strong platform that you can build on. Great. But it’s important to realise that building a team doesn’t end with the hiring process. It’s vital that you spend invest time and money in developing your staff and training them to be perfect for the roles you envisage. Unless you’re lucky enough to have uncovered the perfect employees at the first time of asking, gradually improving your staff is going to be a process requiring time and dedication. If you’ve hired well, each member of your team should have the willingness and the ambition to better themselves and improve at what they do, so it won’t all be down to you.

Travelshift: The perfect partner for travel industry startups

Our proven software helps ambitious travel startups make their dreams a reality. We give you all the tools you need to build a successful, thriving marketplace, kitted out with tried and tested solutions that help you dominate your chosen travel niche.

Having built our community-driven platform from scratch and taken the Icelandic tourism industry by storm, we’re ready to work with partners around the world, helping travel startups tackle the industry’s heavyweights.

Want to harness the power of our industry-leading marketplace software? Get in touch with us today to find out more.