

15 Years of Booking Travel Online: What’s Next? - ted0
http://teddy.is/travel-booking/

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_delirium
Expedia really has 8,900 employees? I guess I have no idea what they really
do, so that might be reasonable, but I would've guessed an order of magnitude
lower. I had assumed it was a mostly automated business, with all the big
infrastructure run by third parties (ITA, Amadeus, etc.).

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potatolicious
Flights are the easy part - hotels are hard. Many vendor relationships need to
be maintained, deals negotiated, etc etc, all of which is fundamentally hard
to automate.

8,900 employees doesn't mean all engineers, or even technical folk. I've
noticed that every travel company I've ever seen is incredibly sales/vendor
management-heavy, and these folk outnumber technical folk by a vast, vast
margin.

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jerednel
I think curated experiences are the way to go for profitable travel niches. A
site like AirBnB can connect people to places that are somewhat alternative,
yet desirable locations: think Williamsburg, Wicker Park, etc..but adding
experiences such as adding Free Parking, tickets to a play, or a prix fixe
dinner in to a package you can purchase with one click seems to be a good
value add on top of the accommodations.

Sites like Orbitz will recommend things, but usually AFTER you have already
expressed interest in your hotel and destination. And Jetsetter has some very
interesting deals but I don't think the average couple/family can just go on a
7 night expedition milking their own goat milk and doing yoga on the mountain
tops of Nepal or whatever experience they're pushing. Give me a nice pad in a
cool 'hood with free parking and maybe a dinner at the latest Michelin
recommended restaurant. That would be a site I would check frequently.

~~~
ted0
I agree. Room 77 is actually doing free WiFi in all of their properties this
summer, which is a pretty savvy move. As far as curated experiences go, I
think some mashup of Gilt City and Jetsetter would be a wise move for Gilt.

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potatolicious
> _"collect roughly ~13% in commission from hotel and airline bookings"_

Hotels probably, but I seriously doubt this for airlines. After all, a 13%
commission would likely put the airline _in the red_ for that booking.

Flying is one of _the_ lowest-margin businesses in existence, and makes
discount retail feel like a walk in the park.

> _"HipMunk also launched their hotel location-based mobile app this year. It
> is very well-designed but I’m really not feeling it."_

I really agree, and it's really too bad, because I love their flight-booking
product and I'm really rooting for the team, but both their hotel booking site
and mobile apps are IMO worse than the incumbents, which falls well short of
their "kicking everyone's ass" bar that they set for flights.

Confusing button placement, unclear comparison tools, incomprehensible color-
coding, and a location-centric search... I just can't get behind it.

~~~
bigiain
+1

I used to run a site that averaged ~29% after credit card fees on hotel rooms,
but we never managed to swing a deal that wouldn't have seen the credit card
companies making more money than we did on flights.

(Maybe their "13%" figure is averaged over high-margin hotel rooms and low-to-
zero margin flights?)

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ted0
I understand that in a lot of cases, the rate is higher than the 13% that I
cited. That is definitely an average that I've pulled from a few different
sources. Would be interesting to hear other averages...

~~~
bigiain
FWIW, my information is quite out-of-date, I left that industry in '08 (I
started in it in '96!
[http://web.archive.org/web/19961019065611/http://www.oztrave...](http://web.archive.org/web/19961019065611/http://www.oztravel.com.au/)
)

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andycroll
I think there's significant potential for the creation of profitable niches
(and product innovation in those niches) in the travel industry: families,
last-minute, experiences, luxury.

There is very little money in flights, so if that's your business you need to
have a long VC-backed runway (pun sort-of intended).

On the hotels side there is huge opportunity.

(Disclosure: I'm the CTO at <http://impulseflyer.com> so I have a vested
interest in the industry)

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ted0
One site that I did not mention is Gilt's Jetsetter.com. They have great
curation and a number of awesome deals.

~~~
andycroll
We're in the same ballpark.

JetSetter started as very 'Gilt' (members-only, flash sales) but they seem to
be making a huge push toward the OTA (online travel agency) model.

And they've had some internal problems recently -
[http://www.tnooz.com/2012/05/15/news/jetsetter-ceo-out-
after...](http://www.tnooz.com/2012/05/15/news/jetsetter-ceo-out-after-board-
request-and-reports-of-internal-squabbles/)

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calbear81
Airfare commissions (especially domestic) are much lower and in many cases are
on a flat fee basis like $3/ticket. Travel agencies try and push more packages
because you get to wrap in a high margin product like hotels/cars (15-20%+) or
by creating a package, they can access wholesale rates for airfare which gives
them a larger margin.

~~~
robryan
Yeah, airfare search is a really bad starting point if you want to start a
profitable business without massive startup costs. Hard to get access to data
from airlines and a stack of other services competing for the thin margins.

~~~
bigiain
Yep - it's really hard to compete with the airline's own website prices for
"simple" ticket purchases, and it's really complicated to automate "complex"
ticket purchases; and the travel industry has "corporate travel agents" who've
got enough experience to be really good at getting a "close enough to optimum"
solution to complex ticketing requirements, and they've got much of the high-
margin flight bookings market tied up.

(At least, that was the state of play back when I was last involved back in
'08…)

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calbear81
Excellent write up Teddy! Sorry about the e-mail validation strictness, I've
logged the bug and will it fixed soon so .is and any other valid domain
doesn't get marked as invalid.

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ted0
Awesome! Thanks. You're quick :)

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bung
Will mention you may have a font problem in Chrome, hard on the eyes.

~~~
ted0
On teddy.is or room 77?

