Travel startups attempting to muscle in on consumer travel will face an uphill task if they want to challenge the status quo.
That's the pessimistic view from the deputy CEO of Lastminute.com Group, Andrea Bertoli, when asked this week about the likelihood of a new business emerging to take on the likes of Expedia Inc and The Priceline Group.
Bertoli was speaking during a session at the EyeforTravel Conference in London about the role of intermediaries in the travel food chain.
"To be a B2C business, it is all about money now," he says.
Such is the spending power of the brands in the global powerhouses of Expedia and Priceline, which spent over $6 billion on advertising between them in 2015 to capture the eyeballs of consumers, that any consumer-facing startup will need to figure out a new method to attract attention or have a unique idea.
Bertoli says:
"It is difficult to start from scratch - new companies entering now will have to have something else."
Whilst there could be an argument that Bertoli is being rather protectionist about those wanting to challenge his own group of business (also including the BravoFly brand), his comments will resonate with countless brands that are struggling to unseat those with deep coffers.
Bertoli suggests that the traction for travel startups is now primarily in services to the rest of the industry, where decent technology and ideas can be sold to a wide group of potential customers.
Destination and mobile services, in particular, can scale without anywhere near the eye-watering levels of digital marketing needed elsewhere to lure in consumers.
The Lastminute.com Group spent in the region of $100 million in marketing in 2015.
Expedia Inc splashed out $3.3 billion, with its arch rival Priceline Group not far behind with $2.8 billion over the same period.
NB:Startups uphill battle image via Shutterstock.