This 1001 startup idea from YoStartups is to create a blockchain based unified travel assistance platform helping travelers get more value from the available service providers and not being dependent on the incumbent large aggregators.
Market Definition for 1001 Startup Ideas – Blockchain based Unified Travel Assistance Platform
As per the World Travel & Tourism Council (WTTC), tourism industry generated $7.6 trillion for the global GDP in 2016; the direct contribution is stated to be around 2.3 trillion dollars. Out of this pie, the online travel market is estimated to garner $1,091 billion by 2022, registering a CAGR of 11.1% during the forecast period 2016-2022 as per a report published by Allied Market Research.
The biggest players in the industry in the online travel market are Priceline Group which owns Kayak, Booking.com, Agoda, Rentalcars.com with a market cap of $87 billion and Expedia which owns Trivago, Travelocity, Hotwire, Hotels.com, Egencia, CarRentals.com, Classic Vacations, etc. Between both of them, they own about 95% of the total online travel market in the USA.
This kind of dominant market share often puts these service providers in an unfair position to exploit their domination by controlling list prices and charging an absurdly high commission for the listings.
These legacy players refuse to innovate as there is no economic incentive to do so because of their monopoly over the market and the end users end up paying more because of the opaque pricing models by the aggregators.
Competitor Analysis for 1001 Startup Ideas – Blockchain based Unified Travel Assistance Platform
There are a few startups who are trying to decentralize travel by offering blockchain based solutions for transparency, convenience, fair pricing and real-time settlements.
Winding Tree, a Swiss-based nonprofit company is building a decentralized travel distribution platform on the principles of DAO (“Distributed Autonomous Organization”) on a public blockchain, where all the vendors, suppliers, and consumers have an equal role to play. The aim is to reduce the entry barriers and make travel cheaper, by allowing smaller companies to compete with the bigger ones. They have already tied up with Lufthansa, Swiss, Aerowings, Austrian, Brussels as partners for the air travel bookings by integrating API’s on the airline’s booking page.
The startup plans to keep 20% of the proceeds from the token sale for the team, and the balance will be held in an escrow account through a smartcontract for all future innovations on the platform.
Mitrav is a UK based startup planning to launch a blockchain based travel assistance app which can help you with travel related services like, to find like-minded travelers, change fiat currencies to local currencies at low transaction fees, language translations, hotel bookings, etc.
It is also providing travelers with innovative features like multi cryptocurrency storage vault, chat-based smart contract, secure online document vault, additional avenues of income for members by blogging experiences and guiding other travelers. They are planning to do an ICO by launching their MTR tokens on Etherium based Erc 20.
Pain Point and Target Audience for 1001 Startup Ideas – Blockchain based Unified Travel Assistance Platform
The biggest pain point a traveler faces is that none of the existing service providers or OTA’s are integrated to provide a seamless travel experience. There are instances where customer ends up double spending on the same travel, because of the absence of real-time settlement gateways and reconciliation can take weeks, blocking the funds till the OTA’s have confirmation that the customer has not availed the service. Similarly, the auxiliary travel services like forex, cabs have some intermediary involved in the transaction. Customers end up paying more for the same service as the intermediary commissions get built into the final price.
From the business perspective, small travel agencies cannot make a viable business in the current situation because the cost of accessing data for providing services is high. Airlines have to depend on Global Distribution Services (GDS) like Sabre, Travelport, and Amadeus which provide global online reservation systems to travelers through agencies.
Value proposition for 1001 Startup Ideas – Blockchain based Unified Travel Assistance Platform
Blockchain-based solutions can handle most of these pain points as they can remove intermediaries by offering services on a permissionless decentralized public platform which do not need any central authority to run them. The transaction costs come down for all the parties as there is a very negligible transaction fee charged on completion of a transaction.
All the settlements happen real-time on a decentralized transparent ledger making end users happy.
Business Model for 1001 Startup Ideas – Blockchain based Unified Travel Assistance Platform
The startup can build a blockchain based online platform, an app or just provide API’s powered by tokens through which the OTA’s, Airline companies and other service providers can be on-boarded on the platform. The tokens will be sold through an ICO to the public, investors, service providers in phases for the platform to generate revenue for the platform and sustain itself. The platform can charge a small transaction fee via platform exclusive tokens to both the consumers and the service providers accessing the platform to complete the transaction.
Way to Market for 1001 Startup Ideas – Blockchain based Unified Travel Assistance Platform
The startup after a feasibility study of the travel industry will propose an ICO by publishing a white paper. The proceeds from the ICO can be used to create the necessary infrastructure to board the clients for alpha projects like API’s nodes for data exchange, token wallets, etc. The startup will have to plan to integrate different category of service providers like airlines, cabs, forex in phases for pilot projects before the platform can integrate everything together. Once everything is integrated, the platform will have to create the necessary infrastructure for scaling up, and setting up security layers.
Milestones for 1001 Startup Ideas – Blockchain based Unified Travel Assistance Platform
The startup will have to set up a roadmap for implementation in staged phases for the first two years. The ultimate goal would be to create a decentralized exchange of trading of tokens to create a more accessible platform.
A typical roadmap would look like this as mentioned below.
Step 1: Q1- Presale of tokens and preparation of the platform for pilot projects with one of the service providers like hotels and end users by providing API’s node for data exchange etc.
Step 2: Q2-Integrating service providers directly with the platform for data exchange and creating a wallet for transactions and storing tokens.
Q3 and Q4 -Repeat step 1 and step 2 till all the other service providers are integrated, and a fully functional wallet.
Q1 and Q2- refining the search engine, integrating multi-currency wallets, smart contracts for bundling different services.
Q3 and Q4- scaling up, data privacy, security protocols, document vaults for KYC and identity verification.
Investment Needed for Prototyping of 1001 Startup Ideas – Blockchain based Unified Travel Assistance Platform
The proposed startup can approach one of the open source blockchain plat like Ethereum, for the SmartContract feature in exchange of tokens at a discounted valuation. In return, the startup can use their infrastructure for creating the token and scaling up in future. The startup can also approach other blockchain accelerators like Startereum or Synechron accelerators based on Ethereum.
The other route for raising funds is pre-sale of tokens at a discounted valuation or an ICO.
Team Capability for 1001 Startup Ideas – Blockchain based Unified Travel Assistance Platform
The team will constitute of blockchain developers with experience on Ethereum blockchain, Erc tokens, smartcontracts. Another member could be modern cryptographers or cybersecurity specialists.
On the industry side, the startup will need veterans from travel, airline or OTA’s for forging partnerships and onboarding service providers.
Investors/Expert Take for 1001 Startup Ideas – Blockchain based Unified Travel Assistance Platform
The travel industry is highly concentrated and monopolized with very few operators holding all the data for air travel reservations, hotel bookings and hotel inventory. Getting access to the inventory will be a challenge for a startup as this would disrupt the current model of the incumbent players and force them to innovate on governance and provide more transparently priced travel packages. A blockchain-based solution for travel can reduce the time taken for settlements; self-enforced contracts can fetch invoices from databases and verify them with blockchain ID’s to make payments and settlements in real-time.
Digital personal ID’s for verification, Blockchain wallets for cab booking, air travel and hotel reservations can reduce headcount, accounting for significant savings which can be passed on to the end users.
The temptation however to control the decentralized, open source, permissionless nature of blockchains to create a DAO (“Distributed Autonomous Organization”) should be avoided, which would defeat the whole purpose of decentralizing the travel industry.
This 1001 startup idea article is from Yostartups, YoStartups is a Pre Accelerator and it empowers entrepreneurs to propel their business ideas into successful ventures. Yostartups’ core mission is to take the message of entrepreneurship to 1 billion people globally by 2020.
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*Any information given in the article does not constitute any warranty of marketability or fitness for a particular business idea for any market or industry segment. It is the readers’ sole responsibility to further research and assess the market opportunity.