Unless you go mobile, your online travel business will be dead in five years

The online travel industry is not only about search these days. The world is increasingly social and mobile – think smart-phones, tablets, e-readers – and the number of tech-savvy consumers is rising. Social and mobile are not going away, so, now more than ever, travel companies must keep pace.

Understanding , influencing and delighting a customer during all stages of the travel experience will also be key to survival in the travel industry.  The New York Times recently published a list  of top 10 travel websites. It offers good examples of companies that provide services that modern travellers want.

The travel industry is about mobility and collaboration, necessitating API adoption. Networks of hotels, airlines and rental cars along with the need to reach a diverse range of travelers on the go means that providers need to integrate more disparate data sources into a wider variety of apps and platforms.

APIs hold the key to seamless, rapid integration and broader reach. Mashery offers some examples of how APIs are used in a smart way in travel industry.

I interviewed Barbora Novosadova from Tripomatic, the winner of the last API Mashup Contest (of which I am the organiser). Tripomatic not only combines great APIs but also makes money thanks to a good knowledge of online travel trends. Barbora shared her view with us.

What works in the online travel business? 

With online travel it is the same as in any other industry – making a great product that people love. Even though the online travel market is very crowded, there are still areas that work in a very rigid and old-fashioned way and they are waiting for disruption. A good example is the global distribution systems (GDS) for air ticket bookings. They are very inflexible and costly. Innovative services that enable getting along without GDS would be very well received.

What do people want in travel? 

With all the travel information available online, even people who used to rely on travel agents book their holidays themselves. They can feel overwhelmed with all the options and they look for services that make their decision-making easier. However, they do not believe that one size fits all and they seek tailor-made recommendations.

Also, as people are used to daily deal sites and other services focused on sales, they want to get better value for their money. They know good deals are available everywhere and they want to find them.

Where can you make most money in online travel? 

Competition in the travel sector is fierce, and prices for advertising are very high. Because of that it is possible to make good money on displaying PPC ads or banner advertising. Affiliate websites can get high commissions on travel packages, accommodation or car rentals. On the other hand, we have witnessed a decline in commissions for air tickets over the last few years. This year the trend has been even more visible and it will probably not get better any time soon. The airlines themselves try to sell more packages such as flight-and-hotel, and they incentivize their affiliate partners to do the same.

What is your opinion on affiliate marketing in the travel industry? 

Affiliate marketing works very well in the travel sector if you have a sufficient amount of visitors and you use it to provide additional service to your users. If, for example, you compare prices from various sources or provide great product reviews, people will appreciate it and you can make money on it. On the other hand, if your site only uses affiliate marketing to display advertising, you will be better off with PPC ads.

How will the industry look like in 5 years?

I believe that in five years you will be dead unless you provide great mobile services. When we launched the Tripomatic iPhone app, we assumed that people would plan their trips on a computer and use their phone to check the itinerary or the map on the go. We were pretty surprised when our users started using the app mostly for travel planning even though it is not as convenient as the website. We have learned that you have to offer the full package on mobile devices. Users  will not  settle for an app with restricted functionality and in five years they will probably be even more demanding.

Platform and device fragmentation are currently the main reasons holding back the mobile boom. Building for five and more platforms adds so much complexity and cost. I expect further consolidation on the market as some will fail to hop on the trend and ultimately lose. It is hard enough for a travel startup now and it will be even harder as the entrance barriers are rising.

What are the challenges of a startup that works in a very competitive area and focuses on the whole world (as far as travel destinations are concerned)?

Startups generally deal with restricted resources and have to laser-focus on things that bring the biggest value. We had to learn to be very data-oriented – we cannot cover all interesting destinations around the world, but we have to focus on the ones our users really search for. In our case the 80/20 principle works perfectly – 80% of our users visit 20% of the destinations. We would love to add some kick-ass features, but unfortunately we know they would only be used by a minority of people. We measure as many things as possible to get the data we need for the best possible decision-making.

What instruments of online marketing do you recommend (or not) using? 

I would definitely not recommend using any black hat techniques such as buying new fans on Facebook from dubious sources, or black-hat SEO. They can work in the short-term but they will backfire later on.

What works for us really well is infographics, such as our Shoestring Budget Travel Guide, which was widely spread and hit mainstream media around the world. Although the immediate traffic spike is short-lived and non-converting, the backlinks we gained boosted our organic traffic by more than 15%. On that note it is important to mention that it comes for a price – we spent more than six weeks creating the infographic.

We have not been satisfied with Facebook ads. We used them among other things to attract new fans to our Facebook Page. They did bring us the fans but they were inactive and probably not interested in what we do. So if you want to work with your Facebook page, and the number of fans is not just a vanity metric, I would recommend using other ways such as building a community.

What what you recommend for building a community? 

Building a community is neither fast nor easy, but you can get incredibly valuable insights from your users. We send an email to every user who created an account on Tripomatic and ask them what we can improve or help with. People appreciate that we are interested in their opinions and they are really helpful. We make most of our new features based on these suggestions. It has also helped us build a strong relationship with our users, because we find out what they struggle with and help them quickly.

How does Tripomatic work? Do you grow as you planned or faster? 

We started as a website travel planner in June 2011 and in the first year we struggled a bit to get the traction. We underestimated the importance of mobile devices in the travel industry, which set us back a few months. However, since the launch of the Tripomatic iPhone app in May 2012, our user base has grown significantly and we are back on track. We believe that an improved version of the iOS app together with an app for Android, which should be available in few weeks, will help us grow even faster. We are investing heavily into product development and have some amazing things up our sleeves.

Image credit: Phil Walter / Getty Images