The travel industry is bigger than you know. It is one of the largest industries in the world, aggregating around $6 trillion in direct and indirect revenue. More than 38% of travel planning is now done online instead of through a traditional travel agent. Easy online payments and 100% transparency in pricing has only added to the online travel planning rush.
Still we see very few entrepreneurs getting into the online travel industry. You certainly need not be Expedia or TripAdvisor to be a part of this growing sector. Even if you decide not to give these well established brands a run for their money, there are many better and more innovative options to take off in this industry;
Opportunity #1: Digital Accommodation Marketplace
Not very new but still an unexplored concept. This is an online platform where people rent out their homes or spare rooms like a hotel. The benefit to the renting party is obviously the money earned. Tourists on the other hand get the opportunity to live with locals in a foreign land and have an entirely new experience.
Airbnb, one of the biggest players that came up with this concept, earns through commission from both sides. Airbnb gets most of its revenue from booking fees; 3 percent is charged to hosts who list a space, and 6 to 12 percent to guests. So, on an average they earn 10% on every booking. To run such a business, you need to gradually develop a community of travelers and hosts.
You also need to provide efficient support to answer every query that your customer might have. Building an engaging website atmosphere is necessary as this is a concept that not many people have tried.
Opportunity #2: Home Exchange
The concept might seem strange to some but has been existing since 1950s. The only difference is that it is now happening online, thus reaching to a wider audience. Some might be acquainted with it because of its use in the famous Hollywood movie, ‘The Holiday’. Close to 100,000 people trade homes every year through such programs.
These websites carry powerful functionality to suggest the most suitable match according to your profile and requirements. This makes the swap easier and comfortable.
HomeExchange.com and Knok.com reach out to travelers and provide a personalized experience with their platforms. Both websites also build a brand name based on reviews about various listed members. Such platforms are also well integrated with social networks like Facebook.
Most brands in this file limit contact options until you shell out some money. This diminishes the chances of spammers and fake profiles. Membership fee ranges from $93/year for Knok and $120/year for HomeExchange.
If you decided to invest in such a platform, you will earn mainly through membership charges.
Opportunity #3: Travel Affiliate
Partner with large travel companies by becoming their affiliates. This way, you are indirectly acting as a travel booking engine based on search technology to find the best deals for flights, hotels, cruise and rental cars bookings. These websites earn high commissions in return, based on a revenue model which is a combination of pay per click and pay per booking.
You can also use advertising from third parties and sale of travel related products as an additional source of income.
Hipmunk.com is one of the most popular players which sorts flight results with a default parameter called “agony,” weighing price, duration, and number of stops for each flight into a single factor. It hides similar flights to make the buying decision quicker.
Opportunity #4: Global marketplace for Local Guides
Another business idea for the tourism industry is a marketplace for local tourist guides from all around the world. Each guide owns a personal profile which lists details about reliability, knowledge and service-quality. LocalGuiding.com is a prominent player that allows tour-guide booking by paying 10% advance on the website. This is the direct revenue earned by the website owner. Viator.com is another website catering to the same clientele.
Local guides prefer such platforms because it gives them a global reach. Because there is no intermediary, they can offer their services at a better price. Happy tourists leave reviews which help guides in acquiring more customers.
If you want to start with something simpler, there are many other innovative ideas on the block.
HotelQuickly is a mobile only application that allows you to make last-minute hotel (noon to 4AM) bookings at the best rates available across Asia. Hotel owners find this proposition profitable as otherwise these rooms would remain empty. HotelQuickly is currently active in Australia, Hong Kong, Indonesia, Macau, Malaysia, Singapore, Cambodia, Taiwan, Thailand & Vietnam.
BingDian helps hotel brands connect directly with customers through discounts and benefits. Bookings can be made directly through the app. If a traveler has a membership card for the partner hotels, he can store them in the app and avail their offers while booking. Another differentiation is that the app offers auction facility for some rooms and the best price wins.
Technology innovations have dramatically changed the way people search and book travel services. In such a scenario, opportunities are huge for anyone planning an online venture. However, along with the opportunities, there are challenges as well.
The Biggest Challenge of All
A website that informs visitors, communicates brand message, and generate maximum conversions.
Airbnb is successful because nobody it in the field of usability.
Hipmunk is loved because it makes flight search & booking seem child play
If you too want to own such a globally renowned and recommend brand, then, you have to invest in a website developed around the concept of usability and carrying functionality that simplifies complicated tasks. If you have any questions or queries about starting an online travel venture, feel free to use the comments section to share them. I would be happy to address all your issues about creating a unique travel brand.
Get in touch through any of my social profiles if you are not comfortable with communication through comments section.