You could say that Hitlist was conceived out of curiosity over how travel distribution works as well as delve further into why more discretionary income doesn't go to travel.
Founder and chief executive Gillian Morris felt the best way to find out would be through building a mobile application for travel and then proved her idea during a Startup Weekend in Istanbul.
From there, she pulled in friend, (now co-founder and head of design) Timo de Winter to help build an app, which ended up winning Tnooz THack in London a couple of years ago. The pair then spent the summer developing the Hitlist app further to help users put together a list of places they'd like to go and notify them when there are good deals available.
Joining Morris and de Winter on the team are co-founder and chief technology officer Luka Kladaric, head of product Rahul Caprihan, and iOS designer and developer Tomislav Filipcic.
Hitlist has attracted undisclosed funding from investors including former Orbitz chairman Jeff Clarke and the founder of JetBlue.
While the startup is targeting many segments across the inspiration, research and booking journey, it believes its 'sweet spot' is flexible travel. Hitlist sees leisure and business travellers who know where they want to go but are flexible on dates as customers as well as those tempted to travel by a good deal.
It believes it might even increase the travel market by spurring on those who want to travel but abandon for whatever reason.
The company sees competition in a number of companies covering various elements of what it does but no one doing exactly what it does.
Hitlist is already earning affiliate revenue for flights with plans to expand into hotels and other ancillaries. It says its long-term goal is to be a 'high ROI marketing channel' for travel suppliers to distribute deals via mobile and email. It's also looking at the potential to sell anonymised user behaviour data.
Q&A with Gillian Morris, CEO of Hitlist:
What problem does the business solve?
Consumers have time, money and inclination to travel, but seldom actually buy. We’ve all heard of the studies that people visit an average of 32 websites before they complete a booking, or that families take an average of three weeks to book a holiday.
The hardest part of the process is finding attractive flights, and since this is where most people start their travel planning, it’s also the area where an increase in conversion will have the greatest impact on the ecosystem.
We increase conversion by:
- Making it easier to browse and evaluate your options, so you’ll feel more confident that you’re getting a good deal.
- Logging users’ preferences so that if prices drop in the future for a trip that interests them we can let them know.
Vendors have inventory to sell at many price points, but struggle to reach the relevant consumers, as evidenced by the fact that Priceline and Expedia spend over $4bn on ads every year. One might say that the CPCs are too damn high. This is because a large number of people browse Kayak (and its equivalents) even when they have no real intention of booking. They’re just trying to get a sense of the market.
We’re much more targeted than a search engine, and closer to the transaction. Because users register their interest in specific destinations and trip types, we’re able to understand more about where they’d like to go and help the right vendors reach the consumers most likely to convert, and thus increase overall conversion, so consumers save money even as vendors make more money.
How did the initial idea evolve and were there any changes/pivots along the way?
Timo and I spent a year working on a different project, which Luka joined towards the end. I still think it’s a cool tool, but we came to realize we were working on a really niche product. We started to consider the real problem: what keeps people from taking the trips they say they want to take?
We spent the summer of 2013 hacking at different ideas until we landed on Hitlist. Since August of that year, we’ve been focused on the same business plan, though the UX of the app has evolved from a ‘Tinder for travel’ to the more immersive experience we have now. We’ve built it to be fun way to register your travel interests and get closer to actually taking those trips.
Why should people or companies use the business?
There’s nothing else that we know out there that takes your travel preferences - as precise or as flexible as they may be - and helps you keep track of the pricing so you know if there are ever options that satisfy your personal set of constraints and desires. We think there are countless trips that are never taken because people aren’t getting the information they need. If we build this tool right then this will meet that demand.
In more detail:
Imagine you’d like to go somewhere warm for a weekend this winter from New York if you found a good deal. You search for Miami, Puerto Rico, St Thomas, Bermuda for the first two weekends in February. Nothing attractive. There’s a very small chance you’ll browse Travelzoo and find something, but they don’t usually have weekend fares. Or you may get an email from JetBlue with a fare sale at some point and actually book something. But the chances are you won’t travel.
It’s worth noting that it’s different for hotels. When you’re looking for a hotel, you can go to Google or Booking.com and see a broad range of your options. Imagine how tedious it would be if you had to search for ‘Courtyard Marriott’ and wait 10-30 seconds to see if they have availability in your price range, then type in ‘Hyatt’, ‘Super 8’, etc.
First of all, you’re gravitating to only the brands you know already, which means brands must spend massively on advertising to ensure consumer awareness. Secondly, there’s a very strong chance you’d search for five hotels, give up, and not bother to travel at all.
This is the way it works for flights now: you have to search for a specific destination, rather than a type of trip or place. The destinations that win out are the ones that spend massively on brand: Las Vegas, Miami, London, etc.
On Hitlist, you can browse a broad selection of trips and filter as much or as little as you’d like: look at all your options, or narrow down to flights to Europe this summer, or even three to five-day trips to San Francisco in a specific date range (useful for business people who need to make periodic trips – I go to San Francisco about once every six weeks, always booking when I get a Hitlist alert, and haven’t spent more than $250 on a round trip from New York this year).
And once you have these filters in place, we can keep track of them over time and alert you if one of your desired trips enters a price range that will make you book.
What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?
Social is at the core of Hitlist and we’ve got big plans to develop it further in 2015. Though the app is useful on its own for finding good deals, it’s more fun and much more informative if you can see where your friends live/have been and share your own travels. We’ve seen decent adoption (>200,000 users) through word of mouth and will continue to capitalize on social referrals by making it ever easier to invite people within the app experience.
We’re also beginning to nurture user generated content, which we hope our users will share across their own social channels. Finally, partnerships are huge for us – we have a fast growing, highly engaged user base in the prime ‘millennial’ demographic, so have lots of opportunities for mutually beneficial cross promotions.
Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?
In a few years, we’d like for people to see Hitlist as an indispensable resource for personalized travel information: a place to list their travel aspirations that then helps them turn them into reality. I don’t think we’ve nailed product/market fit yet, though we think we know how we’ll get there. So the main challenge is to convince people that this idea will work and that we’re the team to build it.
What is wrong with the travel, tourism and hospitality industry that it requires a startup like yours to help it out?
We’re convinced there’s a need for a new platform that takes advantage of the mobile experience to offer a better solution for both consumers and vendors. The differentiators in mobile are clear: devices are ubiquitous (or will be), with you all the time, and personal. What this means for us is that we can build a product that knows you and your preferences, that streamlines payment, where messaging and alerts are more real-time, and where you can book on the go. All this helps break down the barriers that lead people to delay or defer a purchase decision.
We want to make it as easy to browse through travel options and book as it is to find a book on Amazon or a song on Spotify. Our goal is to help people travel more and help vendors sell more travel by reducing current inefficiencies in the system.
What other technology company (in or outside of travel) would you consider yourselves most closely aligned to in terms of culture and style... and why?
We’re huge fans of Slack, the intra-company messaging and productivity app that started gaining serious traction last year. Like them, we try to be light-touch, simplify your life, and integrate with other services you already know and love. But more importantly, we also see ourselves as building a new type of tool that people don’t necessarily know they want yet.
Stewart Butterfield, the founder, put it well in an internal memo he later published on Medium: ‘They've [the public] never heard of [Slack]. And only a vanishingly small number will have imagined it on their own. They think they want something different (if they think they want anything at all)…Despite the fact that there are a handful of direct competitors and a muddled history of superficially similar tools, we are setting out to define a new market. And that means we can’t limit ourselves to tweaking the product; we need to tweak the market too'
We’re also fans of Spotify, which started as a sort of metasearch engine for music but has now evolved into a social network and, with Radio, a tool that does inspiration pretty well. There’s lots of investor and consumer fatigue around the ‘travel inspiration’ space, but we still think there’s huge potential in a tool that digests your current travel appetites and helps you discover new opportunities.
Which company would be the best fit to buy your startup?
We’re on our way to building a profitable business and I don’t see a reason why we would seek to be acquired. If we can nail product-market fit, we should have a significant first mover advantage as we’re building a platform that will reward loyalty and scale.
If that changed, it’s hard to say who would make the most effective partner since the large travel companies seem, from my vantage point, like six of one and half dozen of the other. I’d have to get to know the executive teams and better understand where we might be able to have the most impact.
Describe your startup in three words...
Lookers become bookers.
You've got to admire the ambition of this startup not just on the Hitlist app front but also in its desire to build a new distribution platform for travel based on browsing behaviour.
Hitlist is a great idea - knowing what consumers want and giving it to them hopefully at a price that makes it compelling enough to book.
Pinning a business on the premise that people will travel more if you make it easier for them to find what they want is very interesting. It's true that people abandon existing online sites and services because they don't find what they want but it's also true that travel is very often a large and emotional purchase. Therefore, whether there is an incremental market to be had is unclear.
It's also interesting that there are great deal of initiatives in this space but Hitlist says none combine all of what it is setting out to do. Others could surely replicate the idea in the same way that large OTAs now offer same day booking apps following startups such as HotelTonight.
The various ways it plans to earn revenue are also worthy of note from affiliate revenue to marketing and even through the sharing of data. A spread of revenue makes sense and how the split ends up will be good to watch.
Building scale will be one challenge as the OTAs continue to throw huge sums at marketing and brand awareness.
Hopefully Hitlist won't just become another deals repository but manage to create something more meaningful for travel suppliers and users alike.