Travolution summit write-up

Interesting insights from Homeaway.com at the Travolution Summit

For those that follow me on twitter (@bencolclough) you would have seen a flurry of messages yesterday about the Travolution summit.  The summit was a fantastic event where a bunch of smart people in the world of online travel got together and listened to some great presentations.  

For me the highlight of the day was Chief Exec of Homeaway.com.  For those that don’t know it yet, Homeaway.com is a huge conglomeration of sites with over 360,000 vacation rental properties on its books.  It has serious VC wonga behind it, and has grown aggressively by hoovering up loads of smaller local vacation rental sites.  By its own admission it still has only aprox. 10% of global properties on its books.  The presentation raised three thoughts for me:

1. There are still significant untapped niches in travel: Despite the fact that travel is the second most mature online industry (I’m not mentioning the first), there are still untapped niche markets with huge value.  So whilst VCs have helped fund countless fancy travel apps and social networks, big money remains on the table for those brave enough to roll up their sleeves and get their hands dirty.  Consolidating supply of rental homes isn’t necessarily glamorous work but there is money in it, and it meets a real unmet customer need.  I would count the adventure travel market which Tourdust.com operates in as another example (and is actually a larger marketplace than vacation rentals worth aprox. $200B globally)
   
   
2. Simple is good:  I quote “our sites aren’t special”.  Homeaway.com boils down to offering as much product coverage as possible to customers.  There truly isn’t anything special about the web site.  They even stick with a tried and trusted listings model, owners simply pay aprox $300 per year to list.  They are just getting on with the nuts and bolts of meeting an unmet customer need, simply working on getting that sales and marketing machine turning over nicely.  A lot of start-ups would benefit hugely (Tourdust.com included) from looking at homeaway.com as a case study of focussing on simplicity not the latest sexy social app which might get us a cheap and dirty traffic spike from Techcrunch or Mashable.
   
   
3. M&A in online businesses:  I’m intrigued how an online business can make M&A pay.  The theory is that in an ideal market, when you acquire another company you pay fairly for the value of their future revenue streams.  So if you can’t squeeze some some extra margins by combining forces then the deal won’t cover its costs (lawyers, financiers etc.).  This would typically mean reducing staffing overhead, so combine marketing teams and support functions etc.  I can’t see these savings being significant in the online world because HQ teams tend to be very very small. Likewise it doesn’t make sense to shut the old site down due to the google link juice it will have built up over the years.  So where are the synergies?  Maybe it is simply a case of saving on the sales costs it would take for homeaway to recruit all the properties on the target’s books directly?  For example, if it costs Homeaway.com an average of $30 to acquire a new rental home to the network (via sales or marketing channels), then acquiring a site like homelidays with 40,000 properties on its books saves homeaway an investment of only $1.2m in sales & marketing (assuming there is no overlap in the portfolios).

Other highlights of the day for me included:

The presentation by Tripadvisor:  What struck me most, despite their obvious success in social media is that they still refer to their review content as "their's".  If I had contributed a review to tripadvisor, I would quite firmly believe that content was mine not tripadvisor’s.

Frommer’s research report:  The key point they tried to hammer home was that consumer’s want to see information on a destination when they are browsing online travel agents.  Add to this that Google doesn’t want you to have the same content as everyone else and you get the crazy result of a million and one different destination articles written about the same topic.  How can that add net value to the overall economy?

Social Networks: Works of art or businesses?

Are you a business or an artist if you don't have sales or marketing functions that actually create revenue?  WAYN.com, the largest travel social network by a country mile is about to relaunch their website - branding, business model, the whole kit and caboodle.   Presumably as a result of their struggles to make a decent return on their huge audience (15 million members) and some slowing in growth.  The focus on rebuilding the business model is a clear sign of the times and of common-sense returning to the market.

 

For me, the most interesting change within this announcement is the focus on building a highly targeted advertising network based on travellers answer to the question:  "What are you up for doing?".  Now, since they scrapped subscription fees, WAYN has been a site which like many others, has relied on easy (but crappy) money via the old affiliate / adwords / display ads revenue sources.  What we are seeing here is, thanks to the economy, a more realistic approach to running a business.  One that realises the most important function to insource is the bit that drives revenues.  They are focusing on driving user content and intent that is directly relevant to paying advertisers and they will presumably (hopefully!) use a sales force to sell these advertising opportunities.  If so, they will be following in the wise footsteps of Tripadvisor.com who long ago made the decision to insource their contextual advertising rather than relying on adwords (and they are about the only social network I can think off with a great revenue model).

 

This is my point, how can you call yourself a business if you are not fully in control of your revenues?  Any entrepreneurs out there ruminating a new start-up need to be aware that they're going to have to get their hands dirty and do a bit of old fashioned selling.  Unbelievably, I've met a couple of entrepreneurs recently in the London tech scene, who have founded community sites with fantastic traffic (200k - 600k per month) who have absolutely no interest in making it pay.  In the words of one, who runs a successful local listing site: "It's going ok I suppose, we've got great traffic growth but we're struggling to get the small businesses on the site to pay."  He goes on, "To be honest, I'm not really interested in the commercial side of the business, building a sales force, I just like building cool applications".  Is this not the attitude of a high minded artist than a businessman?

 

So any web startups out there ask yourself, "am I asking any of my users or suppliers to pay me, if not why not?"  In most cases I suspect, it will boil down to a reluctance to do the grunt work.  With the drying up of investment funds to support the "growth now, revenue later" businesses, I suspect they are going to have to start getting their hands dirty sooner rather than later.

travel inspiration - seeing, watching or reading?

Last week I wrote about the importance of navigation and search in helping travellers find ideas and inspiration for their next trip.  Here, I want to talk about the importance of layout and media in inspiring & converting a product view to a desire to purchase.

Yesterday we visited the Shell Wildlife Photographer of the Year exhibition and it really gave me the travel bug.  In analysing what made me want to visit all these places, I concluded it was the stunning photos paired with simple well presented text descriptions that allowed me to quickly dive in and visualise myself travelling wherever the subject of the photo was.

My hypothesis is that photos and simple text create the need state.  Further information, such as long descriptions & iteneraries help convert the need state to a purchase.  So what about other media formats.

Video as a tool for travel inspiration.

I know some people really like video as a format for travel inspiration, but sometimes I find it can be too personal to the presenter.  It is almost like the presenter (and camera crew) is intruding on my imagination and somehow taking the romance out of the (potential) trip.  I think this is a very personal viewpoint (I never did like the rough guide TV series) so would love to hear other people's thoughts?  Is video more of a conversion or inspiration tool?  Incidentally, we did think about having video's on Tourdust and although it didn't make the cut it is still in the pipeline and something I would like to do.  A really great example of using video to drive inspiration and purchase is http://travelguru.tv.  In this context I can really see the value.  

Travel Writing (journalism) as a tool for travel inspiration.

I asked myself the other day, have I ever been inspired to do something after reading an article in the thousands of travel supplements I have read over the years? and the answer is surprisingly, no!  Yet it is still one of first sections I read in the weekend newspapers.  I think the main issue here, for me at least, is timeliness.  What are the odds that I will read about something in the paper that interests me when I am in that short window of trip planning?  Taking that aside I do think that quality written editorial content can work to wet your appetite and build sub-consious demand for activities or destinations that is not converted until later on when you are in the purchase window.  Likewise, the ability to search archives online and the multitude of specialist blogs is a huge resource for the traveller.

What about social media for travel inspiration?

We are now seriously considering promoting our tour operator's blogs and twitter streams against their experience listing on Tourdust.  We believe that the passion and personality of a small operator is probably their biggest selling point and what better tool to do that?  Imagine you are looking at Keith's skiing holiday on his farm in Austria and read his latest tweet (twitter.com/mtb_keith)

Have a great route planned for today, a new pub and a black run

7:26 AM Mar 8th from web

enjoying coffee and cake, a traditional Austrian past time

1:58 PM Mar 7th from web  

This timely and instant insight into Keith's life out in Austria might just be the thing to help you really visualise the holiday and get inspired to want to go.

I'd love to hear people's thoughts on what media they prefer as consumers.  I'll go first, personally I think big, striking and raw imagery (not too polished) is the key, alongside short punchy descriptions that are personally written and carry across the personality of the experience.

New tools & tricks to inspire independent travellers

Our friends at joobili.com are now in open beta and like us they are trying to move online travel beyond a transactional experience.  

Nowadays there is almost too much information when it comes to planning travel online. Generally if you go online looking for inspiration you'll be faced by a complex booking form asking you where you want to go, when you want to go etc.  Problem is, at this point you don't know yet! you are looking for something to take your fancy.

How can web-sites meet this "I'm looking for ideas" need?

We think the key is allowing fuzzy higher level browsing that throws up great results on the fly and most importantly that are displayed in a clean & inspiring visual format.  For example:

Joobili focuses on timely travel.  So you know when you want to get away but you're open to where and what.  Joobili lets you know all the cool events & festivals going on around Europe at and around that time, so you can build a trip around them.  You get a really good overview of what is available before you dive into the detail.

Tourdust on the other hand focuses on what you want to do or where you want to go.  For instance you might be planning a two week trip to South Africa, we can show you some awesome & different stuff to do there and you can then narrow down by activity type or into an area within S Africa.  Or you may be a mountain biking enthusiast and are open where you go, we'll show you all the ideas from all over the world to inspire you

The commonality is a user centric approach on travellers who are looking for something a little bit different on their travels.   When it comes to planning independent travel the old search forms simply don't work  - they're all very well if you want a package holiday to the Costas but simply don't cut the mustard if you are looking for something unique, a little authentic and exciting.

Things I really like about Joobili?

• Inspired slider nav feature that allows you to easily scope out your dates and see what takes your fancy
  
• Massive coverage of all of the events and festivals going on across Europe.  This isn't just music festivals, it includes loads of off the beaten track local cultural festivals and events too.
  
• Nice community features

Hitting Milestones

I can hardly believe that it is now close to the end of February.  It doesn't seems like a second since Christmas and at the same time, I feel a bit like I've aged about 10 years since starting work on Tourdust last summer, most of that since we launched about 6 weeks ago!  But, now that the snow has melted and spring feels like it is well and truly on the way, it feels like a good time to take stock and look at some of the milestones that we have reached...

1)  We now have over 200 local experience providers on Tourdust offering over 270 individual experiences. For those of you who have been following our progress, you will know that we have pretty much contacted each and every one of these providers ourselves! (In fact, I just found one of my first tweets from 27th November proudly announcing our 20th experience on the site.....).  Anyway we now really need to prioritise the development of the referral channel.  It will be an interesting experiment to see if businesses will refer other businesses in the same way individuals do on facebook et al.  We have seen it happening already with Tourdust informally so fingers crossed.  We believe it will work because there are already established networks within the world of small & passionate operators.  

2) Had our first piece of press coverage in the Guardian a couple of weeks ago.  Not a huge mention, but a mention all the same.  

3) Have been covered in several blog reviews, including Alex Bainbridge, Travel Rants

SandWagon, Ineffable and New Bamboo 

4) Been showcased as website of the month for Travel Notebook  and website of the day for Enterprise Nation.  

5) On a personal note, metaphorically speaking we are giving birth to our 'second' baby this year in a couple of weeks.  We are expecting our third little girl, making that three kids under 4 plus a start-up.  I think we need a holiday!

ALTERNATIVE HALF TERM IDEAS

Half term already? It can’t be. Not all of us can afford to go ski-ing this year, so how about some day trips out in the UK which might be fun for the family and won’t break the budget….

Alternative London Sight-Seeing – What better way to bring history alive in half term, than with Simon on his silvercane tours of the capital. His vivid tours take you through the scenes of politicians, murderers and scientists and he brings the past alive as he walks. All tours can be totally bespoke, giving you a truly unique experience. Prices start from £90

Winter Wildlife Watching on Mull – Take the family to Mull and spend some time in the company of passionate wildlife guide, David. Your three night stay will be in eco-accommodation, where Joy, David’s wife will cook you delicious breakfasts and dinners. During the day, David will spend the day exploring with you pointing out the hidden and beautiful visitors to this magnificent island. Prices from £270

Rail & Cycling Trips in the North West – Enjoy a ride on the famous Settle Carlisle Railway to its most famous landmark, Ribblehead Viaduct, where your guide will be waiting at the station with  bikes and everything you need for your trip. You have the whole afternoon to enjoy the ride back down Ribblesdale but before setting off you might like to visit the fascinating museum, on the station platform, which charts the history of the line and its construction - in particular the building of the famous Ribblehead Viaduct. Prices from £35

All quiet at the Travel Technology Show

What struck me most from a day spent wandering around the stalls at the travel technology show was how quiet it felt compared to last year.  Still, I managed to speak to loads of interesting people and found out about a couple of interesting projects.

Most interesting find: yourtour.com a hugely ambitious project that is the result of years of mathematical research.  The site appears to build itenaries on the fly from a database of visitor attractions (sourced from Lonely Planet) and accommodation (sourced from booking.com).  You put in your starting point, tell them whether you want a one way trip or round trip and how long and it builds a detailed daily itenerary.  It even offers an array of sliding bars to indicate your interest in topics like history, art, nature etc. and ammends the itenerary accordingly.  If it works well I can really see this site being a success, but they set very high expectations in their users and the challenge will be in not letting them down.

Most interesting observation:  Talking to Alex Bainbridge at the TourCMS stand, a chap came round with a bunch of quotes for booking systems that varied from 6 figure sums down to £50 per month for TourCMS.  Makes you realise there is still a lot of fat in the travel technology industry.  One assumes the more expensive options offer more functionality in some way but then TourCMS is hardly light on functionality.  The Software as a service model (SAAS) is clearly the future - and there must be plenty of disruption to come in this industry.

Most amusing sight:

After an insigtful presentation on building a startup Hugo Burge was swamped by startups wanting to chat.  A faint plea of "I'm not looking for investments" was the last thing I heard. Seriously though, Hugo made a strong case for bootstrapping and minimising investment in the early days, citing examples of startups who are distracted by both the funding process and the investment.  I do agree, but still think that having investment and 'name' backers can help a lot in getting the press to take you seriously - and press is rather important for start-ups.

The best bit of all:

The best bit had to be the opportunity to chat with interesting people.  At one point I was sat at a table with a bunch of other startups: Sally from Yoursafeplanet.co.uk, Jared from Joobili.com and James Dunford Wood from WorldReviewer.com.  Later on there was bunch of bloggers hanging out at the TourCMS stand: Alex Bainbridge,  Kevin May, Guillame Thevenot, Edd McArdle and myself albeit slightly out of place.  Which made it worth the train journey alone.

By the way if you're interested all of the above people are on twitter if you want to follow them:

http://twitter.com/worldreviewer

http://twitter.com/travolution

http://twitter.com/alexbainbridge

http://twitter.com/eddmc

http://twitter.com/yoursafeplanet

http://twitter.com/joobili

http://twitter.com/hotelblogs

http://twitter.com/hugoburge