Boston-based startup TourMatters seems, at first glance, to be just another tours-and-activities website.
But a second look reveals that it is exclusively focused on multi-day tours and that it has taken a publisher's approach to presenting listings.
The company says that what sets TourMatters apart from its rivals is that it "curates" listings. It more or less scrapes tour information rather than makes deals with operators to profile them and list their itineraries.
The model is not unlike the original TripAdvisor one. Consumers use TourMatters to search for tours, but when they find one they like, they must deal directly with the tour operator or a travel agent.
Curation allows TourMatters to aggregate a lot of listings quickly, somewhat as GetYourGuide has also done as an aggregator.
It's a different model than being an online travel agency or marketplace, which is what is offered by many rivals TourRadar, TourDigger, AffordableTours, and Responsible Travel, among others.
Unveiled in 2013, the startup already claims to have more than 5,000 itineraries in its database, which it says represents more than half of US traveler volume with operators.
TourMatters has created a Vine to give a sense of its pitch.
Q&A with founder Jeremy Loeckler:
Tell us how you founded the company, why and what made you decide to jump in and create the business.
I worked for one of the largest tour operators in the world for over eight years and heard from travelers that they had limited choices when researching a multi-day tour. They boil down to:
• OTA (online travel agencies) – Only list contracted tour operators, which means other operators and itineraries are not represented at all. Commission models drive an operator-centric versus a traveler-centric focus.
• Direct sales – Heaps of catalogs and sales materials provide limited and un-aggregated information.
• Travel agents – Typically specialized and have narrow experience among the thousands of choices available.
• Forums – Lacking more robust tools, travelers often post reviews and inquiries in TripAdvisor or Fodors forums.
I envisioned a resource that would deliver comprehensive and unbiased information for travelers to make the best choice of operator and tour. We created an algorithm based on each operator’s performance with respect to scale and quality.
Then, we developed additional technology to interpret itinerary details so our site doesn’t have to rely on operators to provide tour content.
Size of the team, names of founders, management roles and key personnel?
• Jeremy Loeckler, Founder – Formerly Vice President in marketing and technology at Grand Circle
• Christel Shea, Editorial Director – Super traveler (7-continent club member), industry veteran, consumer advocate
• Devin Gleason-Lambert, Developer – Creative problem solver with a keen eye for pattern recognition
Funding arrangements?
We’ve raised $250,000 in seed funding to date, from a non-institutional investor.
When did you start?
We launched a very simple version of the site in July 2013 that indexed operators... adding reviews in August 2013 and the 1st itineraries in February 2014.
Itineraries are the toughest nut to crack since we had to build discovery technology that finds and interprets them.
We had the initial itineraries live in Feb 2014, but coverage has expanded greatly from 11 operators to 37 now. Our search tools have also improved. Price filters were just added in September.
The multi-day category is less popular with investors and acquirers right now in comparison with single-day tours-and-activities. Witness the recent TripAdvisor acquisition of single-day tour seller Viator for $200 million and the huge investment rounds in GetYourGuide. Why not include same-day?
Same day just isn't our game. It's a fine space, but one that has countless startups vying for position. We can't offer an expert point-of-view on the offerings or a differentiated solution right now.
Multi-day tours may not get as much attention, but still garner $13 billion in spending from 4 million US travelers annually.
Baby Boomers represent 80% of this spend. River cruising, small groups, and adventure travel have been driving growth in this area.
Do you handle customer service? If something goes wrong, for instance, with a tour that's been booked.
TourMatters is not involved in the sales transaction, and we are not involved in resolving customer service issues. We do encourage travelers to post an operator review on TourMatters to share a balanced account of their experience.
Estimation of market size?
Our initial focus is on American travelers and operators who serve them. Americans currently spend $13B annually on tours, and it costs operators over $2B to acquire 4 million of them.
The world market is obviously larger and there’s an opportunity to evangelize this style of travel, but we’ll tackle one thing at a time.
Competition?
We have no direct competition. We keep an eye on a few of the OTA players in this space, but they seem committed to a commission-centric strategy.
When you compare the quality of the operators listed on TourMatters to what’s on other aggregators, you see how a pay-to-play model limits operator coverage.
Aside from omitting other great companies, OTAs give minimal attention to helping travelers select the right tour operator. When it comes to multi-day tours, finding the right operator might be the most important decision a traveler makes.
Revenue model and strategy for profitability?
We’re exploring lead and advertising offerings that won’t compromise the editorial integrity of our content.
We do not process payments. We're not the merchant of record. We do not issue vouchers. We do not earn commissions on affiliate tour sales.
Our model does offer advertising for tour operators to get increased visibility.
We are testing a lead program where a traveler completes a form with their tour preference and contact information. The information is sent directly to the operator for follow-up. We would earn payment on the lead, whether it converts to a sale or not.
A hypothetical scenario may help explain:
- Jane & Bob are former professors that want to travel to Vietnam. They've gotten a few tour operator recommendations from friends, but want to check out the companies themselves.
- Jane and Bob come to TourMatters.com to search for and review the profiles of the companies their friends recommended
- They may also discover operators they hadn't even considered, but that do fit their tour preferences (e.g. small group, mature, luxury).
- They choose a few operators that they like and check out available tours.
- They find a tour that goes where they want and fits their budget
- If the operator is part of our lead program, Jane and Bob submit a Quote Request form. (A caveat: If the operator is not part of our lead program, then Jane and Bob will have to contact the operator, or its competitor, directly.
- A representative from the tour operator calls Jane and Bob with quote information and answers any questions they have.
- Jane and Bob book directly with the tour operator.
- All pre-trip, on-site experience, and transactional follow-up is managed by the tour operator
- Jane & Bob post a review of their experience on TourMatters to help other travelers make informed decisions.
What problem does the business solve?
For Travelers – TourMatters simplifies tour research. We curate and generate well-rounded, unbiased information on multi-day tours.
By consolidating the information from over a hundred operators, TourMatters presents travelers with a filtered set of choices that fit their budget and style preferences.
For Operators – TourMatters has created an open marketplace where tour operators can amplify their brand, reaching thoughtful, targeted, and well-informed travelers.
How did the initial idea evolve and were there changes/any pivots along the way in the early stages?
We certainly underestimated how difficult it was to build the technology that discovers and interprets itineraries.
It turns out, finding itineraries is relatively easy; using text analysis to understand where they go is very challenging. The development took longer than we expected, but the result is fantastic.
Another surprise was the role that editorial content would have in our offering. There’s really no media outlet that exclusively covers issues that matter to multi-day tour consumers.
It seems obvious in hindsight that solid editorial would reinforce our research tools, but that wasn’t on the radar at all when we got started.
Why should people or companies use the business?
Travelers are spending too much time aggregating this information themselves. Or, they’re skipping that research and not making the best decision.
My biggest fear is that when a traveler picks a tour operator or style that is a bad fit, they’ll be turned off to multi-day tours forever.
We see it frequently in the large group category, which tends to be a polarizing experience.
Is TourMatters curating without permission?
Absolutely. TourMatters is a media outlet. We provide search tools and information. We don't sell tours.
How do you get copyright on the text and images released by the tour operator?
We don't publish copyrighted material without permission. Nothing in an operator's profile is copyrighted. However we do use trademarked brand names and logos, which is covered by fair use.
TourMatters' interpretive technology allows us to simply list the places a tour visits rather than reproducing descriptions.
What is the strategy for raising awareness and the customer/user acquisition?
Customer acquisition is a huge challenge in this industry. Operators spend over 15% of revenue on marketing, sales, and commissions. It’s obvious why: packaged tours are an expensive and complex product.
The target consumer is typically mature, well educated, and affluent. This audience is savvy and resistant to common marketing tactics.
TourMatters shares some of these challenges, but we have a distinct advantage because we’re offering information rather than selling a product. Giving instead of “selling,” gives our content marketing, SEO, and digital advertising a huge leg up which we’ve already seen reflected in our results.
Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?
Our offering will have matured significantly with expanded depth of operators, itineraries, and editorial content. Furthermore, the tools to navigate this massive store of information will have evolved.
Tour operators will view TourMatters as the premier channel to communicate with potential travelers, and will reallocate their marketing dollars toward our offerings in order to reach them.
Most importantly, we will be a critical resource for travelers in their tour planning process.
Strong mind share will continue to grow due to the quality and usefulness of our content, and from increased traveler contributions, repeat usage, and strong word-of-mouth.
Our challenge will be the evolution of our content curation, both technologically and editorially. We must continue to move quickly to keep pace with traveler expectations.
What is wrong with the travel, tourism and hospitality industry that it requires a startup like yours to help it out?
Multi-day tours are a large, but often forgotten, travel segment. Countless resources help travelers choose a hotel, flight, car, or activity—but few cover this topic. The booking platforms that have popped up serve a role, but the research function is still wide open.
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?
I can’t speak to their internal culture, but CNET has a similar style in consumer electronics. They have a nice blend of editorial, factual, and user-generated content.
Which company would be the best fit to buy your startup?
At this stage it’s not a big focus for us, but ultimately we’re building three attractive assets:
1) The most comprehensive database of curated itineraries ever assembled. Others might have bloated itinerary numbers, but our itineraries reflect where the bulk of travelers are actually going. Existing travel datasets reflect isolated components of a trip (primarily places), but ours reflects movement and pacing. This data has applications beyond tour research.
2) A brand recognized as the ultimate authority on touring, with a loyal and engaged audience of desirable consumers.
3) A profitable business model with significant room to scale in market ripe for disruption.
When I think of companies that have demonstrated that they value these types of assets, I think of Google and TripAdvisor.
Describe your startup in three words?
Find your tour.
Tnooz view:
TourMatters is off to a strong start. But one red flag is its narrow focus.
Focus can be good. But TourMatters is focusing on a niche within a niche -- multi-day tours, while TripAdvisor aims to conquer the whole travel cycle. Is the startup's target market broad enough to build a sustainable business on?
A key factor is the typical transaction size.
The median ticket prices on multi-day itineraries can be mouth-wateringly high, making referrals potentially profitable. But TourMatters has to get eyeballs on its site and ramp up its business development to make this work -- daunting parallel tasks.
Another red flag is that its competitors have a leg up in experience.
For instance, TourRadar, which has been at the multi-day game for years, just made a bold move to become the Viator of multi-day group tours.
What's interesting about TourMatters, in contrast, is that its exclusive niche isn't the style of tour, but rather the role TourMatters is playing as an "objective" research site.
TourMatters is a research tool, somewhat similar to CruiseCritic. It aims to help travelers make an informed decision, but completing the transaction is up to them.
The startup's goal is in providing great information. But with content and media businesses struggling, one question is if TourMatters can be revenue-neutral or profitable in a rapid way.
If successful, it might be a target for acquisition for TripAdvisor-owned Smarter Travel, LMVH-owned OnBoard, or in-flight magazine powerhouse Ink Global.
Of course, the recent purchase of AirTreks, a round-the-world travel information site by blog empire BootsNAll plus the business successes claimed by Matador Network and Off Track Planet suggest that anything is possible.
TripAdvisor itself, in its role as information site and gateway to transactions (and its constellation of editorial properties), is the most obvious success story.
At the end of the day, execution matters. We look forward to seeing what TourMatters gets up to.