NB: This is a guest article by Matt Zito, an online travel business consultant.
Is it me or are you noticing more travel startups that are really just technology businesses or media companies operating under the disguise as a leisure travel business?
These new startups are companies termed as social travel, meta-travel, affiliate-travel ventures.
Under the hood, I am not finding any real traditional travel products or services that I can purchase as a consumer. Yes, they might help me plan my trip, connect me with my friends, show me reviews of what other people think but they don’t sell me a travel product.
There's a lot of me-too in there.
These so-called travel companies are neither travel operators nor resellers of travel. So I wonder:
- Does this hurt the travel industry or help the industry?
- Why do so few want to take the transaction and, instead, perfer to just push me to a third party for the booking?
- Has building a company that truly services the traveler through the entire travel experience become to difficult or is technology driven companies and data driven companies where’s it at right now?
I believe part of the reason for this shift is because technology has made it easier to create companies. It’s just easier today to move data, users profiles and the like from one computer to the other.
It’s much more difficult, so it seems, to have relationships with travel operators and to service customers in the traditional customer service sense - phone, email and postal mail, etc.
Where is the authenticity being created with today’s new startups and, for that matter, some of the more mature travel brands like an American Express Travel that just announced it is letting go of 5,400 people?
Airbnb, HotelTonight and Mauiva AirCruise are three companies I admire that have created what I believe to be authentic travel businesses.
All three companies leverage technology but what they do different is that they service the traveler and are forging close relationships with their travel operators, suppliers and B2B customers.
We have hard a lot about Airbnb and Hotel Tonight, so I thought I would share with you a look at a real innovator, risk-taker and truly authentic travel company Mauiva AirCruise.
Mauiva AirCruise was founded by Uri Argov, the CEO of Tourico Holidays. Tourico Holidays is one of the largest B2B hotel room wholesalers in the world.
The vision was simple: "...to create a better way to travel and see the world."
The plan complex but Mauiva AirCruise in effect delivers the travel a service to the traveler through the entire consumer travel funnel. Mauiva AirCruise basically owns or controls the entire travel experience.
Travelers can book directly on their website, a tour guide accompanies you on the trip. Mauiva AirCruise has private chartered planes that pick you up, a private tour bus waits to pick you up and take you to the hotel after you land and you lodge in hotels that have been directly contracted with by the company. Mauiva AirCruise is servicing its client’s travel before, during and after the trip.
Status quo issues
CEO’s of mature travel companies, founders and entrepreneurs with dreams of entering the travel business should be thinking about how to build more travel companies like Mauiva, Hotel Tonight and Airbnb.
My entrepreneurial instinct says that companies that focus on owning the customers travel experience will be around much longer than most of the new travel technology-driven companies we see being started today.
In short: leverage your assets, innovate and service your customers
AMEX's cuts are due to competition from the Internet and their customers moving to online portals to book their travel.
Its clients are some of the most prized clientele in the entire travel industry, high net worth individuals, SMBs and corporations are booking their travel cheaper somewhere else.
CEO Chenault says:
"The company must embrace new technologies, become more efficient and position itself to invest in growth opportunities in a marketplace that's increasingly becoming defined by consumers' use of the Internet and mobile technology."
Now, AMEX has a $68 billion market cap. They have millions of business travelers. Are they just going to sit there and watch them book somewhere else or can they innovate and become more like the newbies?
I am sure AMEX has direct contracts with hotels but if they do not then this could be a start: how about take $1 billion in cash and debt and buy one business hotel in the top 25 cities in the USA, hire a major brand to manage the property.
Don’t stop there
Why not after they make 25 hotel acquisitions they also buy Uber or one of the new hot private share ride services to whisk their executive business class clients from the airport to your hotel in private limos.
AMEX travel agents, the best travel professionals in the world, now focus on driving clients to AMEX-branded hotels. When the executive checks in to the hotel he or she will of course use their credit card to earn AMEX hotel points.
Now you they a bigger part of the business traveler funnel and use technology and a powerful brand to execute the entire process.
If you’re a start up entrepreneur or a CEO of a mature travel company it's time to start thinking out of the box and, sadly, not like everyone else.
Let’s start building more authentic travel companies focusing on servicing the traveler, creating real value and have travel technology be the enabler not the travel product.
Over the long-term companies like the trio listed above are the real innovators and will help move the travel industry forward by facilitating and creating truly wonderful travel experiences for travelers.
NB: This is a guest article by Matt Zito, an online travel business consultant. The Travel Business Academy helps entrepreneurs start and grow travel businesses.