The travel tech industry is booming. It might have something to do with the fact that we are traveling more than ever before and we rely heavily on technology to make our travel experience seamless.
Unfortunately, most traditional brands aren’t doing a good job of making that online experience hassle-free for the modern consumer, which leaves a lot of room for anyone to come in and steal the spotlight (assuming they know what they’re doing).
But I’m realizing the issue doesn’t lie purely with the hotel brands. They too are finding themselves stuck between a rock and a hard place when it comes to integrating technology into their current systems.
According to a hotel technology study by Fuel Travel, 52% of hoteliers are not satisfied with their Property Management System (PMS) provider. That means there are a huge gaps and a lot of areas for improvement in this industry.
It’s no wonder travel startups are on the rise!
With new entrepreneurs targeting ever narrower niches within each sector of the industry establishing your startup in this industry might not be such a bad idea.
This doesn’t come as a surprise though, given the research-based facts that continue to be reported. Statista shows that the direct economic contribution of travel and tourism amounted to $2.57 trillion in 2017, proving the steady increase and growth over the past decade. They also say digital travel sales will reach $818 billion by 2020.
This forms the backdrop for the growing trend of tech startups no doubt.
With companies such as Airbnb coming into the industry and setting an example of what’s possible when one executes on an idea people resonate with, even the little guy stands a chance at winning big.
The profit pie is pretty huge for those interested in the travel and hospitality industry, so innovative startups can quickly gain momentum and get both investors and consumers very excited.
But before you take the leap of faith and try to make your idea as disruptive as Airbnb, there are some key things to consider. It is true that for the most part, the travel and hospitality industry is lagging behind when it comes to seamless customer experience and innovative technology.
There is definitely lots of room for growth. Some entrepreneurs see this as an opportunity waiting to be seized, while others simply want to take their love for travel to the next level by starting a business and solving a problem that enables them to keep experiencing their dream lifestyle.
For the sake of simplicity, let’s assume that you’re not a greedy fool jumping from one industry to the next looking for the next big opportunity to manipulate. Let’s assume the travel lifestyle is your passion.
Taking your passion for travel and experience as a backpacker and turning it into a profitable business sounds great, but do you actually have what it takes to see it through?
Not everyone can be an Airbnb, regardless of how big your passion is or how much capital funding you can accumulate. In fact, there’s a growing frustration among first-time entrepreneurs as their passions quickly turn into dying flames. In general, we are finding out that most tech startups end up in failure. Small business trends say only 3% ever make it to the fifth year of successful operation.
This is quite sad.
In travel and hospitality, where things change rapidly from season to season, chances of long-term success for a small startup are really low. This isn’t an easy industry to conquer. It won’t be a breeze, but if you can crack the code, it is one of the most rewarding industries.
Whether you’re launching to serve the consumer directly or the brands, gaining traction, finding and keeping the right connections and talent won’t come easy. Embrace that from the get-go, and half the battle is won.
The next bit is clearly understanding that even as a tech startup, certain things must be prioritized when dealing with this industry. So let me share with you some of the essentials for success.
3 Essential things you must know and do if you want your tech startup to succeed in the travel and hospitality industry.
1. It’s not about your product; it’s about the solution that enhances the client experience
One of the key differentiators between the hospitality industry and any other is the fact that guest experience sits at the core of every solution.
You might have the best software out there, but if it doesn’t clearly demonstrate an enhanced client experience, neither the hotelier not the consumer will be interested.
So make sure when you build and pitch your product that it is completely customer-centric. Not many tech startups are getting this right. If you do, your business will rapidly gain traction.
2. Sales are everything for your business. Make it a priority
This doesn’t mean you start manipulating or taking advantage of people. It means offering something so good that people feel that the most logical thing to do it just buy. But here’s a quick cautionary story that seems to be recurring in this industry…
Adam has been running a PMS system for several decades now. His clients (hotel brands) now require him to provide a more efficient system that can integrate with the latest technology. In service to his clients, he starts hunting for a small tech startup that’s already built what he wants to provide for his clients, with the intention of a mutually beneficial partnership. Of course, he receives proposals from various entrepreneurs, some of whom have really great tools already in place.
One particular candidate caught his attention. so he invited this passionate former backpacker to come demo for Adam’s team. Unfortunately, the pitch was a total flop, and his insecurity and lack of salesmanship lost him a huge deal.
Don’t be that guy.
If you have any issues with selling, get some training and master the skills necessary for executing a great sales pitch. At the end of the day, people don’t buy the best product, they buy the product they best understand. You need sales to grow a successful business.
Let your sales help you improve your product and scale your business. Daymond John says the product is king, and sales is the proof that your idea is viable. I’d borrow that same mindset if I were you.
3. Build strong third-party relationships
A perfect follow-up from the previous tip is this – you need to start building genuine third party relationships. As early on in your startup as possible, connect with and add value to people who can vouch for your work.
These relationships will not only make it easier for you to gain access to the right deals, they can provide on-going value for your company and the technology you’re building.
Being a lone wolf in an industry that deals with serving people, connection, and human interaction will drive your business to the ground.
In the travel and hospitality industry, the big players have been dominating for many years. Even if your solution is needed, you still need a way in, especially if you’re dealing with the hoteliers rather than direct consumers. Which means that you’ve got to prioritize relationship building and client nurturing. It can’t be rushed, and please don’t be phony with your methods.
Make a list of a dozen people or brands you want to be associated with and figure out ways of initiating a conversation. Then do your best to generously add value to them. Let the relationship naturally unfold until these people see you as a strategic partner. This will take some effort, but trust me, it’s worthwhile.
Having strong relationships with third parties even as a new player will underscore your credibility in the eyes of your prospect, and it will certainly extend your reach faster than if you just try to go at it alone.
Conclusion:
Many first-time entrepreneurs come into the travel industry with no connections or prior experience. As such, they have no real idea of what they are getting into or the mindset needed to make their idea profitable.
I’m not saying that you need to have prior experience. Far from it. We have enough proof across every niche market that anyone can develop the necessary skills and strategies to win big-time.
What I am emphasizing here is that having the right perspective and mindset will be crucial for your success. There’s nothing you can do about lacking in business experience, but you definitely have control over your mindset, the structure of your business, and the game plan you wish to execute.
Fuel your ambitions with a solid frame of mind and these essential ingredients and you’ll be able to jump into the deep-end with the confidence that you can figure it out as you go along and turn your small idea into a big empire.
