This eCommerce Startup Idea from the 1001 Startup Ideas collection of YoStartups is to establish a Peer To Peer Network of Agents For Travel Bookings. The startup will just provide the centralized platform with hosting and payment solutions. Using the power of the platform, locals can become the travel & tour agents and help others traveling to their location with customized travel experience.
Market Definition for Peer To Peer Network of Agents For Travel Bookings
The travel and tourism industry is one of the world’s largest industry; as per a report on statistica.com, the industry had a global economic contribution (direct and indirect) of over US$ 7.6 trillion in 2016. Let alone the direct contribution, including accommodation, transportation, entertainment, and attractions, was approximately US$ 2.3 trillion in the year.
For decades, Western European countries and the US have been consistently popular among tourists, and with the recent surge of tourism in South East Asia, Africa, and Eastern Europe, the industry is growing faster than ever.
Just alone in the US, the travel agency industry is projected to generate upto US$ 17.3 billion in revenue by 2020, up from US$ 15 billion in 2015. According to a forecast by TachNavio’s analysts, the global Travel Agency market is set to grow at a CAGR of 9.60% over the period 2014-2019.
Competitor Analysis for Peer To Peer Network of Agents For Travel Bookings
There are numerous travel agencies and online platforms around the world, but they mostly work on B2C model rather than Peer-to-Peer.
There is Netherland based company, TRVL, which is a peer-to-peer travel booking platform, where one can earn a commission on every booking either made for himself or any other group.
Canada based Trapeer is another such company, where travelers can post their service requests, from accommodation to ridesharing, to lessons, equipment hire, and activities, and local service providers can make them an offer.
Pain Point & Target Audience for Peer To Peer Network of Agents For Travel Bookings
Being a Peer-to-Peer marketplace, there will be two sets of the target audience. One would be the locals who have an extensive understanding of the local tourist attractions and would want to use this expertise to make some supplementary income. Second would be the travelers who want to experience their travel destinations with the all the prior know-how and planning.
Currently, travelers end up spending weeks in planning for their trips and go through dozens of review websites and blogs. These blogs are usually marketing gimmicks, rather than being true information which often ends up disappointing the travelers in the end.
Due to the lack of local information, the travelers also pay a huge premium for most of the bookings for accommodation, activities, transport, etc. and a large majority of this premium goes to multiple layers of agents in between as their commission. A Peer-to-Peer platform will eliminate these multiple layers providing better service at an affordable rate.
Value Proposition for Peer To Peer Network of Agents For Travel Bookings
The platform will generate value for both travelers and locals, as they would be able to connect and liaise with each other and transact through the proposed platform. The travelers would not have to spend hours in going through multiple blogs and travel sites to plan their trip and can get the complete know-how with their local peer connect through the platform.
The platform will ensure proper control over the quality and cost of the transaction happening through the platform which will enhance the trust factor among the travelers. Any new listing on the website will only happen after stringent quality control and checks
Business Model for Peer To Peer Network of Agents For Travel Bookings
This eCommerce business idea will work on the marketplace model, where the startup will charge a fixed commission from the seller for every successful transaction. The local individuals will act more like the travel agents that can use the available inventory in the marketplace and provide the customized travel plans for the travelers.
With the advancement of the internet which widens the target audience and an increase in overall tourism, the margins in the industry have grown higher. It is reported that in last one decade the profit-to-revenue ratio has increased from around 6% to 12%, and proposed startup will share some of this margin with the network of local travel agents.
Way to Market for Peer To Peer Network of Agents For Travel Bookings
The startup should start with setting up a platform which links to all the popular travel booking sites like agoda.com, Expedia, and booking.com to collate listings at one central platform. This will help users find best options at the best possible price. The startup can cut a special commission deal with these popular platforms and can pass on some of it as discounts to the users.
Once the startup has collated most of the accommodation, transportation, and other travel activities, it should start onboarding the locals to join the platform as the travel agents for their local area. These agents will further the name of the startup through word of mouth in their region. The startup should treat them well and in start should incentivize them sufficiently. All care must be taken in enrolment of the agents to avoid any fraudulent transaction or mis-happening.
Milestones for Peer To Peer Network of Agents For Travel Bookings
The startup should take APIs from all the major travel bookings and activity platforms, and collate all the listing on its platform in first four months. After that, the startup should target to establish its network of the local travel agent in atleast 10 top tourist destination by the end of the first year.
Investment Needed for Peer To Peer Network of Agents For Travel Bookings
The proposed eCommerce startup should look to raise between $50-$75K from angel investors or accelerators focused on digital and marketplace industry. The startup is not product heavy, and hence most of this fund would be spent on early marketing of the platform.
Team Capability for Peer To Peer Network of Agents For Travel Bookings
The team needs a marketing hacker as its co-founder to lead from the front. He should be an expert in content-driven marketing so that that long-term sustainable traction can be generated in the segment. The team would also need a full stack developer to develop and maintain the platform.
Investor/Expert Take for this eCommerce Startup Idea
In just a very short span of time, the shared economy has become a ubiquitous concept. Specifically, when it comes to travel industry, people tend to trust the personal opinion from an individual more above the third party businesses. A living example of the trend is Airbnb which has raised $4.4 billion in investments.
Considering the huge success of the shared economy model in travel and transport industry, from the likes of Airbnb, Uber, etc., investor community would keep a close eye on a startup implementing the mentioned concept in a scalable way.
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