TLabs Showcase on travel startups featuring UK-based cruise metasearch engine CruiseCompare.
Who and what are you (including personnel and backgrounds)?
CruiseCompare will hopefully change the way users search for a cruise holiday. We are a comparison website that allows consumers to search prices from multiple travel agents instantly.
We work completely independently from any cruise brands, meaning we are entirely impartial in all aspects.
We want to position the site as a web savvy money saving service that allows people to find their next cruise holidays faster and simpler.
What financial support did you have to launch the business?
- Danielle Fear, managing director (starts January 28 2010), is an experienced online marketer with ten years of cruise ships writing knowledge.
- Tom Fotheringham, director.
- Andy Hindmarch, head of web development, developed Lastnightoffreedom.co.uk, the UK’s leading stag and hen online company with more than 15,000 stag holidays booked.
We have had proof of concept funding from Northstar - a venture capital company dedicated to building successful high growth businesses across the North East of England, plus personal investment and plenty of sweat equity.
What problem are you trying to solve?
Internal research shows that users visit an average of five websites before finding and buying their cruise. We want to simplify their journey, making sure they need only visit one website, making buying easy and fun.
The current cruise market is fragmented with no easy way to find the ideal cruise that meets potential customer’s requirements.
With hundreds of different cruise options from £49 to £49,000, the market requires a champion brand that can provide a trusted, unbiased market place for consumers.
We are trying to cut through the noise of the current crowed market by helping customers make an informed decision of what is perceived value and what is real value, by providing customers with live prices from leading travel agents.
Other traditional cruise agents search features are quite restrictive & slow by having to select brand, ship and departure month, where CruiseCompare allows users to search as widely as they wish, then narrowing selections down - ideal for people who are part of the growing first time cruiser market.
Web savvy serial cruisers who take multiple cruises per year might have more flexible requirements, but may only want 5 star cruises, staying in a suite with a £3K budget. CruiseCompare allows users to deliver prices for their requirements from the market.
The website is also getting ready for the shift from telephone to online bookings by being very clean and simple to use.
The site will also allow cruise brands to grow their direct business by adding their last minutes deals on our top 10 weekly newsletter and adding last minute unsold departures on the 24hr flash sale feature.
Describe the business, core products and services?
CruiseCompare is a travel price comparison website that searches thousands of cruise deals from all over the world. The website provides the information to the potential customer in an easy-to use, user friendly display and sends them directly to the source to make their booking.
CruiseCompare is unique and first to market for the cruise sector and follows highly successful similar business models for insurance, fight, car hire, mobile and finance.
The business model is based on commissions earned from travel agents and then direct from cruise operators as well before generating further revenue from related services.
CruiseCompare will provide comparison of tens of thousands of cruise holidays each year in order to find the perfect cruise for users.
Who are your key customers and users at launch?
Serial cruisers that may be used to dealing with multiple travel agents will be great supporters of the product.
People who are new to cruising will also be key to our success. We have spent a lot of time trying to ensure that the site has a very open friendly feel without the aggressive hard sell messaging you often find on comparison websites.
We have started to build a cruise presence on Facebook with 3,000 fans in three weeks, further helping us identify potential customers.
Did you have customers validate your idea before investors?
We spoke to many cruise partners, key people in the online comparison sector and the cruise brands direct. The feedback was that there was a place for a professional comparison site in the cruise market, due to the shift of cruises being a one off experience to a commodity product.
We gained insight from the cruise community on forums and social media sites.
We also built a test site, to ensure the speed & function of delivering multiples prices from over 10,000 sailings, which was critical to get the buy in from leading cruise agents and the cruise brands.
What is the business AND revenue model, strategy for profitability?
Essentially, we earn affiliate commission on every sale made through the site. We will monetise the top 10 weekly newsletter when we have a sizable database, and the 24hr flash sale which allow cruise brands to work direct.
We will also have sponsorship opportunities and competitions for under cover cruise reporters to our user base.
SWOT analysis – strengths, weaknesses, opportunities and threats?
- An excellent and valuable domain name
- Proven business model in other sectors (e.g. insurance, flights, car hire)
- Can become the cruise ‘public service consumer champion’ tool
- Excellent strategic partnerships with both agents and cruise organisations
- Strong website design, function and technology
- Exceptional technical team with experience of building stable, scalable platforms
- Very low cost base
- An established, successful and growing market which fosters supply and demand
- Scalable business model via expandable cruise agent partners.
- Relatively low profile and awareness in the market place at present
- Limited intellectual property
- Not all cruise brands can see the value of a comparison site
- Reliant on a trusting relationship built with the strategic partners and their payment of earned commission
- CruiseCompare can be replicated in other countries,
- Massive new capacity in the market due to new ship builds. Average ship builds cost $400m - $900m – 42 new cruise ships on order between 2008-2012
- Cruise market is set to double within next ten years
- Introduction of supporting services/products
- Changing customer profile, younger & families
- Community support - the surge in online social networking could be leveraged to CruiseCompare.co.uk’s advantage because the business model is community based
- The cruise market expanding to a wider demograophic market such as families and younger couples
- The high growth in web savvy silver surfers
- The later introduction of supporting services/products.
Who advised you your idea isn’t going to be successful and why didn’t you listen to them?
- Cruise brands could see that we are adding value and driving volume in the new business model for the cruise sector and seek to encroach on our target market
- Cruise brands might not feel 100% happy about their £50,000 cruises sold as a commodity rather than an experience
- CruiseCompare is 100% dependent on a single product (cruise holidays) so there is a risk of adverse market conditions affecting the business
- A major competitor appearing on the scene that could replicate our service with larger marketing budget
A couple of cruise brands told us we are two years too early or we would damage the market by not adding any value or crushing margins.
We have tried to address these issues, by having a rich buying experience including features like: large lightbox images of all areas on every ship, user generated reviews, deck plans, destination guides, cruising guides, video and a community where people can share their cruise experiences.
Many people told us that we have a great concept but the cruise market is not a commodity product and people buy on trust not on price.
People have tried before, but stopped at people submitting a form for a quote and then getting a call back. We tried to come at this project from a user point of view, by providing live pricing.
What is your success metric 12 months from now?
We want to create a website that people love using, give great feedback, engage with and want to share by becoming mini brand ambassadors of our free service.
We hope to ensure that we have enhanced and improved the website with plenty of new features.
Then the following will happen:
- Become Profitable.
- Rank in the top three in Google for competitive terms like: cruise deals.
- Strong pre qualified leads for our travel partners which convert at 15-20% from call to booking.
Here's a clip:
NB: TLabs Showcase is part of the wider TLabs project from Tnooz.