Why I wouldn’t put my money into a group travel startup
Ah, group travel. What a problem it is, right? I think we’ve all been part of an optimistically created holiday Facebook group or large email chain at some point. And it’s inevitably a huge pain in the arse.
The endless notifications.
The rising price of the flights as a result of the indecisiveness.
So it’s no wonder that many a startup has tried to tackle it.
Last week I wrote about how solving a problem is not enough. This is a perfect real-world example of that in action.
Yes it’s a pain, but would someone really seek out a new service for something that they do once or twice a year? Unlikely. They’d stick to their tried and tested tools of communication that they use every day for everything else. In fact, I’m planning a ski trip right now. I’m fully aware of the startups offering group travel planning but guess what? I’m still doing it on Facebook. From my point of view the impact on my life is too small to warrant the effort of searching out a new solution.
To add to this, travel planning startups that focus on time-saving perhaps aren’t solving a problem at all. Recently Rod Cuthbert, CEO of Rome2Rio, wrote a good piece about how a speedy planner would rob people of all the enjoyment of exploring the possibilities of their trip.
Customer Acquisition Problems
The user’s journey is unlikely to start with googling “sweet group travel app”. It’s more likely to be destination-related search – which is humongously competitive – and then a copy/paste job into a Facebook group or an email to share it with the right people. The pains of group planning are only felt part way through the process and are long forgotten by the time the next trip rolls around.
Using Google’s Keyword Planner, a cursory look at monthly search volumes puts group-travel-related search terms in the tens or hundreds, rather than the thousands they need. How about building a memorable brand? Again, the problem is the service is only used once or twice a year. That’s not enough for a brand name to cut thought the thousands of others competing for space in a customer’s mind. There’s just no brand salience. Sure, there are other plausible marketing channels – like social and word of mouth – but it doesn’t seem substantial enough to achieve the hallowed hockey stick growth.
I do see some opportunity in B2B though. White-lablling and appealing to the needs of hotels is a better route to market than straight to consumers. Groupize is doing interesting things by developing the tech for hotels to handle large group bookings. They’ve already landed a licensing deal with a big hotel group and hope to succeed in white-labelling. More on them from Tnooz here.
Who’s in the Space?
I wish these guys the best of luck, and I’d be happy to see them prove me wrong:
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