Taking into account the might of the mighty Expedia et al, who would launch a brand new online travel agency these days?
Well, two chaps from the UK are going to have a go when they finally unleash LoveHolidays out of its current beta version to trippers in January 2013.
Founders Alex Francis (CEO) and Jonny Marsh (COO) already tried tackling the travel sector with search site TravelMatch [TLabs Showcase - TravelMatch] in 2010, but their idea has lot more meat on the bone than its predecessor.
Advised and backed by Brent Hoberman (founder of Lastminute.com), Jon Moulton (founder of Alchemy Partners and Better Capital), Roger Flynn (ex-Virgin Group and BA), David Scowsill (president and CEO WTTC), John Hays (founder and MD of Hays Travel) and Kingsley Duffy (founder of Hostelbookers), LoveHolidays currently has a team of 12 people in its HQ developing and running the website and another team in Newcastle who provide offline sales and customer service (outsourced to Hays Travel).
LoveHolidays say it is doing the OTA thing differently, trying to position itself as a place to go when destination is not the primary motivation for the initial, rather using type and quality of accommodation and price as the starting points
With dynamic packaging coming in 2013, LoveHolidays currently acts as a retailer for major tour operators (Thomas Cook, Thomson, etc) and takes a commission from each sale.
Like its current call centre outsourcing, LoveHolidays also uses Hays to host its consumer protection (ATOL) arrangements.
LoveHolidays insists it is a technology company simply trying to spin the process of holiday search (the booking part is the same as most other OTAs) in a new direction.
Q&A with CEO Alex Francis:
How is the way you are solving this problem more special or effective than previous attempts you or the market has seen before and how different do you have to be to succeed?
Currently, the major UK OTAs require you to enter a destination before you can look for hotels, flights, availability and prices.
We think this model is partially flawed, indeed research shows that over 70% of people who purchase holidays online know what they want to do, rather than where they want to go.
We have developed a platform that allows customers to search for a holiday without having to choose a destination or a date as a prerequisite; they can search across a wide range of choices such as holiday type, budget, facilities, star rating or TripAdvisor rating amongst many others.
As the customer chooses their requirements, the results automatically update to display hotels / resorts / destinations that match their requirements.
Why should people or companies use your startup?
Our platform not only allows the user the ability to search without the constraints associated with APIs, but offers price comparison as well to ensure our customers get good value for money.
We believe we are the only site in the UK that offers both price comparison and direct booking on the same site whilst providing the customer with competitive pricing as well.
A fundamental focus of Loveholidays is to provide the best search experience possible by providing detailed information about the hotels.
Customers are able to view a large amount of information about each hotel that has been recommended to them, including photos of the hotel and the resort area, details of the hotel facilities, up to date weather reports (and historical climate graphs), area guides and TripAdvisor ratings. Customers are also able to search on TripAdvisor ratings, alone.
Other than going viral and receiving mountains of positive PR, what is the strategy for raising awareness and getting customers/users?
Here at LoveHolidays, we believe in using multiple marketing channels to create the right marketing mix so we can achieve a positive ROI. We are conscious of the fact that we shouldn’t rely on just one source i.e. Google especially with the current changes in Google’s SERPs.
Apart from SEO and SEM via Google, we have an affiliate programme, email marketing, numerous social media platforms, display advertising and will be launching a voucher/reward scheme. In the longer term, we will also be looking at offline channels.
What other options have you considered for the business and the team if the original vision fails?
We’ve been fortunate that we have been able to test the platform in Beta and although we still have a long way to go, early KPI’s suggest that our customers understand and like the flexibility of our site.
That said, there have been some pretty frantic moments! but we’re lucky that we are a small dynamic company with the ability to adapt, and that in the startup world we know that being ready to adapt is key!
What mistakes have you made in the past in business and how have you learned from them?
In the case of LoveHolidays we have learnt quickly that listening to the customer is the most important thing you can do to ensure conversion; be it customer services, deposit schemes or usability – it’s pretty obvious stuff, but if you don’t get the simple things right in the highly competitive world of online travel, you are likely to fail.
We are also fortunate to have a very solid dynamic team here at LoveHolidays who are able to adapt and develop rapidly and efficiently ensuring that when mistakes are made they are rectified quickly as well!
What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?
Research has shown that over 70% of people who purchase holidays online know what they want to do on holiday but not necessarily where they want to go and they also want to go somewhere they’ve never been before.
However, despite this, the majority of existing travel sites are destination oriented so the customer needs to decide on the destination before they can even begin searching for their holiday.
As a result, we felt the industry needed a revolutionary site that could offer a search function that wasn’t solely destination specific.
Tnooz view:
Entering a busy marketplace with a brand new online travel agency takes some doing, but LoveHolidays has a dizzying array of backers who have clearly bought (literally) into the idea that it will do and achieve something different.
Whether altering the process of how to inspire users to select a product will work is another matter entirely. Certainly airlines have tried to create different ways of doing so (British Airways and Lufthansa, for example) as well as Ebookers.
But such tools have not crossed into the mainstream and still only feature as, well, alternative features alongside the existing and standard model of "from", "to" and "date".
As Francis says, LoveHolidays is in it for the long haul (no pun intended) and will eventually try to break away from the model of using other provider's stock of hotel inventory and have direct relationships with many of the hotels it currently features on the site.
Business-wise this is a crucial element of how it will develop going forward.
But scale is everything in OTA-land, especially in Europe where there are countless destinations and resorts, so it may be relying on third parties for quite some time yet.
And at least if the plan to introduce dynamic packaging of products in early-2013 turns out to be a damp squib (depending on who you believe, DP is a declining trend), it does have the existing model to keep things ticking over.
That's the idea at least. The ongoing question will be around customer acquisition (as always, "creative ideas" is the mantra), especially as SEO is far trickier these days than ever before and buying keywords is far from cheap for many of the terms it will be looking to get in on.
Snap poll:
[poll id="69"]
NB: TLabs Showcase is part of the wider TLabs project from Tnooz.