As luggage fees have quickly became a mainstay in the airline business - by some estimates delivering $36 billion for airlines worldwide - interest in luggage shipping has increased exponentially.
LugLess is the latest travel startup angling to take a bite out of these fees with door-to-door delivery of luggage for travelers.
The startup's tag line "travel without the baggage" is appropriate, as consumer ire for the fee-driven growth of airlines is palpable.
The company was founded after watching the impact of baggage fees on the travel experience, says managing partner Brian Altomare:
In 2008, we saw the start of airline baggage fees. We also saw traveling through airports becoming a lot less enjoyable for people. We thought a service that helped customers bypass the hassle of checking their bags and paying to do so, waiting in long check-in lines, and waiting at crowded baggage claim by sending their luggage ahead of time would be an innovative solution to the existing baggage fee nightmare and hassle of lugging bags to and from the airport.
The 5 person team has been funded entirely by one angel investor, and is wrangling a market also addressed by Luggage Free and Luggage Forward.
Altomare took a moment to explain more about Lug Less and its market strategy.
Please explain your revenue model and strategy for profitability.
LugLess has deep discounts with UPS and DHL and we provide customers with pricing that is competitive to what customers can find from going directly to UPS and DHL, while providing white glove service and easier order process and service guarantees, while still making our margins to be profitable.
Describe what your start-up does, what problem it solves (differently to what is already out there) and for whom.
LugLess is a travel agent for your luggage. We are a door-to-door luggage shipping service that picks up a travelers luggage from their home, office, or hotel and sends it directly to wherever they are going ahead of time anywhere in USA and over 200 countries worldwide.
We allow customers to bypass baggage fees, waiting in check-in lines, help them go through security faster, and help them avoid baggage claim and prospect of lost luggage. We are sometimes less expensive that what airlines charge on the 2nd, 3rd, or 4th bag for baggage fees and we actually provide a door to door luggage service for the same price, sometimes more, sometimes less.
Why should people or companies use your startup?
Our pricing is less than FedEx or UPS on Express and international shipping. Our domestic flat rate pricing and order process is very easy and completely white glove, allowing travelers to enjoy their travel experience without lugging their bags to and from the airport.
Other than going viral and receiving mountains of positive PR, what is the strategy for raising awareness and getting customers/users?
Create large partnerships with hotel chains, airlines, travel associations, credit card reward programs, insurance companies, Professional sport teams and athletes endorsements, celebrity endorsements, and business tycoon endorsements.
How did your initial idea evolve? Were there changes/any pivots along the way? What other options have you considered for the business if the original vision fails?
Our first company was a national college storage and shipping business called BoxMyDorm.com. We decided to scale outside college market and put our 6 years of logistics experience to use in creating a disrupt brand in the travel space that could generate orders 365 days a year.
Where do you see yourselves in 3 years time, what specific challenges do you hope to have overcome?
We envision that LugLess will have major travel partnerships and be a household name, generating revenue in excess of 10 million dollars, and servicing over 30,000 customers a year.
What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?
Not many are offering this valuable add on service and travel perk to their clients. They are letting the airlines generate 6 billion dollars a year on baggage and ancillary fees without providing services like LugLess that can make the travel experience more enjoyable and help their companies retain and satisfy their customers from their from the beginning of their trip and experience.
Tnooz view:
LugLess is certainly hitting a sweet spot, and although there is ample competition, there could be enough business for all of them. With baggage fees ranging from $20 to $40, the premium for shipping is actually quite small when considering the amount of effort to haul bags to and through the airport.
Shaving tens of minutes of the journey at each end could be worth it for certain travelers, especially those who are traveling in large families, for business, or those who balk at paying $40 for a taxi due to having heavy baggage.
In fact, the cost of shipping luggage door-to-door might actually be less for those who have to spent $100 on taxis to get to/from the airport - without bags, they might be able to take advantage of public transportation instead.
Traveling by air is also becoming increasingly stratified, and segmenting price insensitive travelers who gladly trade money for convenience is a clever move. This service isn't for everyone, and that's the point.
The service will continue to grow in appeal as airports get more crowded, and overhead bins more taxed by travelers refusing to check bags due to fees. Some airlines are already considering implementing their own door-to-door luggage service to avoid losing out on this business, so there's also the small-but-real potential for an acquisition down the line.
One potential hurdle is that many of the more affluent travelers who may purchase this service have perks from status and/or credit cards, which eliminate baggage fees. So the company needs to figure out how to position itself as a "necessary luxury" that improves the deteriorating air travel experience.