London-based SpareFare has developed a mechanism and platform so that travelers can get their money back on non-refundable ticket reservations on hotels or airlines.
The system also works the other way, letting those looking for that distressed inventory snap up airline fares and hotel reservations.
Describe both the business and technology aspects of your startup?
We give people refunds for their non-refundable reservations! And we provide travellers with unique below market prices for holiday bargains.
Millions of people lose money on their unused travel bookings every year because they are not aware of any safe and hassle-free ways to resell their reservations.
But now there is SpareFare.net, an online platform connecting people who have bought flights, holiday packages or hotel rooms but can no longer use them, with people seeking discounted travel options.
By transferring their booked non-refundable reservations to SpareFare buyers, sellers are able to partially or fully recover the money they paid for the trips, while buyers get a true discount of up to 50-60% by not paying the current price of the bookings.
We offer fraud protection to both buyers and sellers and dramatically reduce the risk of transferring flights, hotel rooms and holidays to strangers by acting as an intermediary.
What inspired you to create this company?
Like most startups, this one was created out of personal need. It all started when my co-founder, Georgi Stavrev, realised he would not be able to use a flight ticket due to unpredictable work commitments.
Full of misplaced hope, he ended up changing the outbound date two times, until he eventually gave up.
None of his friends wanted the ticket and there wasn’t a scam-free marketplace he could sell it on. He saw the need for a trustworthy service which salvages costly travel tickets and gives people the chance to fly when all other options dry up.
Give us your SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of the company?
A definite strength is that this is a very much-needed service. Both for the buyers and the sellers. We have received numerous encouraging messages from users telling us how great the idea is and how they wished they knew we existed sooner.
A weakness would be the fact that this is a relatively new market, and a lot of people are still not aware that many non-refundable reservations are actually transferable.
A great opportunity is the large market size.
A current threat we are thinking about right now is Brexit because we are based in London. Running a startup involves dealing with a lot of uncertainties and Brexit just adds to the already long list.
What are the travel pain points you are trying to alleviate from both the customer and the industry perspective?
We want to create a new type of shared economy in travel.
In ten years, we want everyone to be aware that they can resell their travel reservations to other people, and for SpareFare to be the go-to site for everyone looking for a cheap holiday, flight or a hotel room.
We want to enable millions of people every year to travel cheaply and see more of our amazing world.
We want to help everyone who is not able to travel recoup at least some of the money they spent on their holidays, making travel more affordable for everyone.
So you've got the product, now how will you get lots of customers?
We have really benefited from word-of-mouth advertising. Our users are happy customers and because SpareFare is quite new and unique, it is something our clients tend to talk about with their friends.
Also, the really good thing about our marketplace is that sellers can also be buyers. A few sellers do come back as buyers in a while, resulting in organic match-making.
Tell us what process you've gone through to establish a genuine need for your company and the size of the addressable market?
Every year, there are seven million transferable flights in Europe which could be resold before their flight date. And £2 billion pounds are lost in transferable hotel room reservations globally.
It is also worth mentioning that thanks to the European Package Travel Directive, all reservations purchased as part of a package within the European Union are transferable.
How and when will you make money?
We will charge sellers a commission on the refund amount they get back when they sell their booking on SpareFare.
Right now the commission is waived, because we want to maximise the supply and demand for offers on the site in order to create liquidity quicker.
What are the backgrounds and previous achievements of the founding team, and why do you have what it takes to succeed with this business?
We are two co-founders. I am a qualified UK solicitor and I started my first business while still in high school.
Through SpareFare, I found a shortcut to what I enjoy most - negotiating and making deals, while also working on a business I am passionate about.
My co-founder is a professional financial trader. My negotiating and people skills are complemented by his quantitative and finance acumen.
What's been the most difficult part of founding the business so far?
SpareFare is facing the typical marketplace challenge.
We need to grow both the supply and the demand side for the marketplace to become liquid, at which point the magic will start to happen.
Our biggest challenge right now is growing both the supply and the demand side at equal rates.
Generally, travel startups face a fairly tough time making an impact - so why are you going to be one of lucky ones?
Our users really see the value of what we are doing! Lots of people cannot travel and many of their reservations can be resold, allowing them to recover some of the money they paid.
Meanwhile, there are many flexible travellers, who just want to travel and explore, and are not constrained by certain dates and even sometimes by a specific destination.
For these two groups of sellers and buyer using SpareFare is an obvious solution.
What question might we have missed......?
Can you really transfer your flight to someone else? This is the question we get asked most often.
You can transfer your flight to someone else if your airline allows you to change the name associated with the flight.
There is always a fee for the name change and they vary from airline to airline. Most low-cost airlines offer name changes as part of their official policy and you can do it for a minute from your airline account.
We have done extensive research and compiled a list of airlines which allow name changes, including a summary of their fees and rules.
Some regular airlines, which do not allow name changes as an official policy, make exceptions for their customers - we have seen quite a few occasions where airlines have deviated from their official policy.
It is always worth calling your airline’s customer service and trying to persuade them to allow you to change the name. They might ask you to pay a fee if they agree.
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