Gap 360 flies into independent Gap Travel sector

TLabs Showcase on travel startups featuring UK-based Gap 360, a new online travel agency aimed at medium to long-term overseas trips.

Who and what are you (including personnel and backgrounds)?

We are Gap 360, a UK Limited Company owned by its directors, David Stitt, Jane Mclellan and James Jeremy.

We are a new travel company specialising in gap year travel, although we prefer to call it Gap Travel, as most people go for just a few weeks or months, rather than a year.

Jane Mclellan 34, director of operations - Jane left Aston University and embarked on an 18-month round-the-world gap journey. Upon her return to the UK, she joined Real Gap at its inception and was variously responsible for Sales, Administration and Operations. Jane played a major part in Real Gap’s success, and after 7 years she left in January 2010 to embark on another gap journey to Africa and South America, but this time she wrote a book about gap years along the way, called Gapbook.
James Jeremy 31, technical director - James completed his degree in business studies at Loughborough University and took off on a gap trip to Australia and Asia. When he returned, James’ first “real job” was at Real Gap! He quickly proved indispensable and grew to become a Senior Manager, responsible for developing the websites, internet marketing and operating systems, along with the general running and planning of the IT and Web development teams. James left Real Gap in early 2010 to pursue his love of Enduro bike racing, while keeping current with the latest trends in web development and online marketing.
David Stitt, 61, managing director - David has worked in the travel industry for 38 years, 15 of which were in the USA. He has experience in operating travel programmes in many countries and has been responsible for several successful start-ups. He started Real Gap in 2003 and grew the turnover to £11 million, when it was sold to TUI Travel in 2008.

What financial support did you have to launch the business?

Entirely financed by the directors, no private equity or bank finance needed. More cash funding available from the directors if required.

What problem are you trying to solve?

The riddle of how to spend your gap year. There are so many options for people leaving school or uni, or people who simply want to take time off from their everyday lives.

We aim to provide them with simple well prepared travel solutions. “See stuff, do stuff, have fun. Fair trade, fair practise, best price".

We are taking a fresh approach whereby the customer, overseas supplier…all our stakeholders enjoy a fair share of what it takes to put these travel packages together.

Describe the business, core products and services?

It is a gap travel company as described above.

The core products are opportunities abroad for young travellers seeking to broaden their experience, do something worthwhile and relevant to their likely career, experience various adrenaline adventures (optional for some), undertake volunteer work and get paid work abroad, as well as the chance to participate in an internship that will enhance their cv.

Who are your key customers and users at launch?

School leavers, uni graduates, young people looking for interesting and worthwhile travel opportunities and older people who need some serious time off travelling.

Did you have customers validate your idea before investors?

We have no outside investors. We are having customers validate our idea by sending interns to report on our trips before we launch in October 2011.

What is the business AND revenue model, strategy for profitability?

Business model is to offer a wide variety of gap trips at affordable prices. Revenue model is pretty simple… people pay a deposit when they book, then pay in full 12 weeks before they depart.

Strategy for profitability is equally simple: keep overheads reasonable and under control, don’t be afraid to spend lots on internet marketing, aim to reach breakeven between years 2 and 3 and reach 12.5% EBITDA in year four.

SWOT analysis – strengths, weaknesses, opportunities and threats?

Strengths:

Strong experienced management team
Deep knowledge of markets
Extensive, excellent contacts will ensure the provision of good travel product
Strong web and design knowledge and contacts
Solid understanding of social networks and internet marketing
We have everything we need to start and run the business
Have the investment monies needed

Weaknesses:

UK Economy is looking difficult so is this a good time for a start up?
More, much smaller companies are entering the market as competitors (but will they survive?)
Marketing will cost more than in the past, PPC prices levels increasing
Harder to get quick SEO success now

Opportunities:

With directors’ extensive knowledge there is a big chance to grow the business fast
Will be easy and cheap to hire good people in this economy
Strongest competitors have high overheads to maintain
By appointing partners in other countries we can generate a considerable and ongoing revenue stream
Our social networking site Gapbook.co.uk will generate leads and publicity.
With no cumbersome corporate structure over us, we can react fast to changing conditions and enact ideas and solutions fast

Threats (and how to overcome them):

Economy worsens dramatically, sales targets not met (if sales do not reach targets we have the flexibility and ability to keep overheads lower than projected).
Projected investment we have proves insufficient (we have the funds to increase investment).
An operations disaster early on diverts staff attention and resources (unlikely, but if it happened would simply set us back a bit, however the publicity would cause lots of new leads to be generated).

Who advised you your idea isn't going to be successful and why didn't you listen to them?

No one.

What is your success metric 12 months from now?