TLabs Showcase - Groupize

TLabs Showcase on travel startups featuring US-based group travel planning platform Groupize.

Who and what are you (including personnel and backgrounds)?

A travel industry professional with 20 years experience in group travel and Group Travel Technology.

Diverse background includes founding a rafting company, working at the Montreal CVB, president of Yankee Holidays (which ran NYC Packaging post Sept 11th), vice president product and operations for Globus and Cosmos, and SVP of biz dev for Wandrian (former train travel technology company).

What financial support did you have to launch the business?

Groupize is self-funded and some resources are being supported by another travel business of ours.

What problem are you trying to solve?

Groupize solves key issues for the group organizer (expert or novice) and for the supplier.

Our passion is to automate the processes of group travel including itinerary creation, contracting, RFPs (if yield managed), costing, pricing, proposals, confirmation, operations and finance.

In essence, Groupize allows:

• Dynamic packaging for groups
• Instant pricing (group proposals are usually returned in 48 hours)
• More transparency
• Disintermediation
• Customization
• Socializing
• Accessible for smaller groups
• Last-minute groups
• Unique experiences (as opposed to commodity travel).
• We also give group suppliers the tools to distribute more efficiently.

Describe the business, core products and services?

Our approach is to offer experiences by “Collections”, customize them with an extensive array of relevant group products available and to book them online (or via the phone) knowing that we will deliver a consistent level of service.

We are building the business from the ground up, starting with a strong foundation focused on an extensive portfolio of group suppliers.

Our strategy is also to follow and introduce best practices in operations.

Groupize is a not only an in-house tour operator, but a vertical marketplace for Group Travel Suppliers to distribute their products directly to various channels, while respecting the tiered pricing models of our industry.

Groupize offers an extranet for loading content as well as widgets, white labels and APIs for 3rd parties interested in the Group Space.

Thanks to our call center and operations department, we compliment the online efforts of our distribution partners to guarantee conversion and flawless execution.

Who are your key customers and users at launch?

We currently work with the more traditional channels for group travel such as tour operators, travel agents, group leaders and sports teams.

Post-launch, we plan on servicing consumers, schools, meeting planners and other novices making their way into group travel.

Our goal is to become the “groups” tab on the majority of travel web sites currently dedicated to individual travel.

Did you have customers validate your idea before investors?

No. We trust that we’ve known all along what customers needed from experience.

What is the business AND revenue model, strategy for profitability?

We rely primarily on the merchant model of marking-up on net rates for the group product we aggregate.

If automated properly, customized group travel can be profitable due to the high average booking value and established industry margins.

In our soon to-be-launched group vertical marketplace, we will be offering annual membership, lead generation and advertising models for suppliers.

We have introduced coop-marketing programs focused on trackable ROI for destinations interested in the group travel business.

We benefit from affiliate revenues from 3rd party software for group products we haven’t automated (air, cruises, insurance, etc) but make available on our site.

The business is structured to organically grow and be profitable until we are ready to scale up significantly.

SWOT analysis – Strengths, Weaknesses, Opportunities and Threats?

Strengths:

• A true understanding of the group space
• Flexible technology and processes built to meet the demand
• Intuitive shopping experience for customizing
• Instant pricing and proposals
• Ability to offer tiered pricing by channel
• Breadth and depth of group suppliers
• In-house packages combined with niche products from approved 3rd parties
• Brick and mortar expertise behind the product
• DMO and CVB Partnerships Model
• Third party distribution through: Widgets, White labels and API
• Ability to create micro-sites for group organizers to share with others in the party

Weaknesses:

• The usual temporary lack of resources to execute our plan faster and implement all the ideas we have

Opportunities:

• Change in demographics and travel habits favorable to group travel
• Although there is a recent boom of group travel web sites, the reality is that Online Travel has focused all its energy towards individuals, leaving an opening for group suppliers to distribute themselves
• DMO and CVB sites being converted to all FIT products due to existing technologies
• Ability for most major travel web sites to instantly add group content and convert some of the traffic
• Facebook and Social Tools easily adapted to group travel
• Offer global products
• Group travel has always had somewhat of a negative connotation, when it is in fact the best way to explore if done right.  Consumers are now realizing how a well-put together itinerary can offer experiences individual travel cannot match.  Adventure Travel is a prime example of the potential growth of the group travel industry.
• High booking value and respectable margins
• PhoCusWright estimates the North American group travel marketplace and small meetings business at $185 billion per year. ABA estimates group travel at $75 Billion annually.
• A general disinterest in groups from leading travel technology company and investors

Threats:

• A major OTA investing in group travel. Would probably take 2-3 years to come up to speed
• Another group travel technology enthusiast.  Although we saw Groople, Group Travel Planet, Adventure Travel Sites and others fail; some will succeed if they have the right model. We just want to lead the group.

Who advised you your idea isn't going to be successful and why didn't you listen to them?

Others have failed at the group travel space in the past for reasons we always understood. We’ve been told that VCs weren’t interested in our space, but were never told it wasn’t going to be successful.

Early feedback and partnerships are very encouraging.

What is your success metric 12 months from now?

Coming out of Beta, finish contracting North America, launching phase two, powering 50 travel websites for group content, powering 15 DMOs or CVBs, $12-$15 million in revenues, satisfied customers and enjoying the journey.

NB: TLabs Showcase is part of the wider TLabs project from Tnooz.