This article was also published in Phocuswire.
If you take a look at Travel Weekly’s top 50 travel companies there are a few familiar names.
We all know Priceline, Expedia and Orbitz. But if you are shocked to find FC USA on that list (ahead of Orbitz in fact), join the club. I was shocked at how few of the names I recognized. There were BILLION dollar companies in this industry, operating successfully for decades, that I hadn’t even heard of.
Many other travel startup founders enter the industry with a similar naivete. They think that, as an avid traveler, they understand the travel industry. They come in completely oblivious to the underlying infrastructure, and our industry does not do a good job of bringing them up to speed quickly.
To help future travel industry newcomers figure out how things work quickly, we are releasing our Online Travel Landscape.
I spent my first Phocuswright and ITB Berlin wandering around, asking companies with booths what they did, often leaving more confused than when I got there. My second Phocuswright this past year was much more useful because I finally understood which companies worked with each other, and was able to set up valuable meetings.
Over the past year we have been assembling a list of all the potential companies we could partner with. Oddly enough, ground transportation (what we do at Mozio) is pretty well placed to gain this perspective on the entire industry: getting people to and from airports and ports to hotels means 90% of the industry are potential partners.
We decided to prettify what we were using internally into a chart, inspired by the famous Lumascapes. When I started my first job after college at an advertising startup, a Lumascape of the advertising industry was handed to me to help me decipher the major players in the industry. If our chart can help a few travel industry newcomers shorten their learning curve then we’ll be happy.
Some disclaimers: you don’t make classifications like this without realizing it will make someone unhappy. I’m sure there will be spirited debate about which categories companies belong in.
Keep in mind that many companies straddle four or five categories. We tried to include industry leaders, and categorized them mainly based on what role they were widely known to play in the industry, even if they also played in four or five other pools.
But lines have been blurred.
Room 77 is a metasearch engine that can accept bookings, traditionally a role that metasearch doesn’t fulfill. TripAdvisor has moved into metasearch, and there is rarely a flight search engine that doesn’t also include a hotel search engine. And, the public impression of a company’s place in the industry may be very different from how they’d like to define themselves.
The arrows are also very simplified: if we tried to draw arrows for every company that works with a particular section of the industry, we’d probably cloud out the logos. Frankly, we need a few extra dimensions to truly depict the confusion that is the travel industry.
That said, if we have missed anyone obvious or miscategorized anyone, and I’m sure we have, please contact us at info@mozio.com, we’d love to add them.
Takeaways for newcomers
Corporate travel and traditional travel agencies hold an importance that isn’t appreciated to the casual traveler.
There is a whole part of the travel industry that the normal leisure traveler rarely sees. Corporate travel and traditional travel agencies still make up a huge portion of the industry, and don’t neglect them.
Everyone knows about Concur and Travel Leaders, but there are another 40 or so companies with revenue in the hundreds of millions.
While this may seem obvious to many long-time readers of Tnooz, to newcomers it isn’t. Over the past couple of years I was continuously introduced to companies I had never heard of, only to later find out that they did billions in business per year, and they were in corporate travel and traditional travel agencies.
The Plumbing: Merchandising Solutions, Airline Booking Software, Hotel Channel Managers and Property Management Systems.
It took a while before we found out about merchandising solutions like Farelogix, iSeatz andDatalex. These companies make it possible for an airline to add travel insurance, car rentals and many other ancillary revenue opportunities to the airline booking flow, and manage other aspects of the airline booking engine. I remember the first time I heard about Datalex I was under the impression they were a competitor of ours, as a partner told me that they were going to use Datalex to supply their transfers. I didn’t understand that just meant that they were going to use Datalex to access whatever transfer solution they decided to use, and that could very well be us.
We weren’t aware of airline booking solutions like Navitaire and SITA until some advisors pointed out that we could integrate with them as well.
The corresponding companies on the hotel side are property management systems/hotel booking engine software, and channel management companies that facilitate the inclusion of independent hotels into various OTA channels. Examples include TravelClick and SiteMinder.
Don’t neglect these companies, they are the plumbing that run much of the airline and hotel booking process, and can streamline cooperation with those entities if that is something you are interested in.
The backend technology of the travel industry consists of much more than just Global Distribution Systems. Don’t neglect the other plumbing.
International Travel Search Engines
Don’t neglect international OTAs and metasearch engines.
We have found our most interested partners have actually been OTAs and airlines in Canada and Latin America.
Many times these markets are more competitive, as there is still a landgrab for travelers who don’t have established loyalties and habits quite yet. They are more willing to innovate to try to get the upperhand and have less to lose.
These can be great testing grounds for a new startup, assuming you have international coverage. We have tried to include travel companies from the Middle East/India (Musafir, MakeMyTrip, Cleartrip), Europe (Lastminute.com, Trivago, Momondo, Odigeo), Asia (Qunar, Ctrip), Australia (Webjet), Russia (Ostrovok, Oktogo) and Latin America (Despegar, BestDay, PriceTravel).
New Travel Startups
Most of the new travel startups are in a few categories, namely peer-to-peer marketplaces, travel inspiration and discovery, and multi-modal. Peer-to-Peer has had a level of success with Airbnb and FlightCar/Relayrides. “Rideshare” companies like Sidecar/Lyft and Uber deserve a mention too, though my personal opinion is that these barely qualify as “travel” companies, and are more innovations in taxi dispatch, not the travel industry.
Peer-to-peer hasn’t been very successful in the tours and activities space, with Gidsy being acquired and then shut down, and Vayable pivoting into more of a concierge service.
My views on travel inspiration and discovery can be seen here and my views on multi-modal are here.
My advice would be for new travel startups to be more cognizant of the opportunities to innovate in other parts of the industry that aren’t so consumer facing and sexy.
Be aware of all the underlying plumbing as you innovate and have some self-awareness of where you can fit in in the industry.
Focus on the un-sexy, and study up!