Blog Archives

If I was going to start a travel and tourism business…

These are the first things I would do. I would start researching and educating myself as much as I could about the type of travel business I had interest in starting. I’d spend 1 month reading and learning, gathering informational resources, connecting with people and companies that could help me. Here is a list to get your started. I’ve curated the list so I am bias to these resources as I’ve visited all of them and find them valuable. Also in full disclosure I am the publisher of some listed here. If you have a resource, free or paid and it is not on the list, please email and I will add it. Free resources: T4 Blog – Travel & Tourism Technology Trends – Well you here already so make sure you bookmark this web page and come back every 30-days as I’ll be updating the list. TravelStartups.co blog. Inspiring CEOs, founder and entrepreneurs to build great travel companies. Travel Startup Founder Series, short podcasts direct from travel founders telling their story in how they started their travel company. Interviews include Steve Kaufer, co-founder of TripAdvisor and more. Open Travel – An association for learning about travel distribution and the technology now being used to build out the next generation of online travel companies. Small Fish Big Ocean – A free forum helping specialist tour operators and activity providers with e-commerce. You can post questions about travel startups here and many people will give you answers. You can download a free ebook titled, 55 Travel ecommerce tips. SECRETS of the online travel business. FREE 30-page report will provide you with insight about how the travel industry works, who makes money and how. Tnooz –A must read news site dedicated to travel and tourism with a bias towards technology travel startups. Many travel entrepreneurs and travel insiders post commentary to published articles. Eye For Travel – Travel industry news and conferences. If you can afford it, try to attend at least one Eye For Travel conference per year. LinkedIn – Join LinkedIn, join two groups that are relevant to the business idea you want to start. Start requesting connections with up to 100 people that are involved in the travel business that may be able to help you. Tourism Starter Kit  - A massive amount of information about starting a travel business. The kit is meant for Australian businesses but you can learn here. Paid Resources: How To Start A Travel Business. The Travel Startup Series, 106 pages by Matt Zito in e-book and Amazon Kindle. $24.95 Travel Business Academy – A members only website that teaches entrepreneurs how to start a travel business, includes 5 online start up, business development and marketing modules. Price from $97-$249 lifetime membership. Start Your Own Travel Business and More.  A book published by Entrepreneur Press, $19.95.

Posted in Blog, Syndicated

Sell and distribute your tour and activity inventory through the Owned Inventory Merchant Model.

The Owned Inventory Merchant Model is an inventory acquisition model and a contracting strategy used by travel wholesalers to acquire hotel room inventory.  In a nutshell the wholesaler pre-pays or guarantees cash upfront for inventory, better pricing and more favorable terms and conditions. Tour and activity providers can leverage the same strategy to their advantage by flipping the conversation with wholesalers and distributors that want to distribute your tour and activity on a free-sell basis, meaning they want to sell your inventory first then pay for it after they sell it by requesting that the wholesaler and distributor pay for your inventory first then sell it after. I’ve been consulting with travel startups for the last three years mainly OTA’s and tour operators and I’ve been amazed by the myth surrounding the idea of acquiring inventory by pre-buying it. When I talk to OTA startups about the idea they just cringe. I get this crazy look, like why in the heck would I want to do that when I can just get the inventory via an XML feed from a 3rd party or the hotel direct without having to pay for it upfront. I am sure you see the advantages for your tour and activity business in receiving money upfront for your inventory but how can you convince a wholesaler, distributor or any travel business that approaches you about distributing and selling your inventory to pay up first. Here is a quick how to that you can implement next time the phone rings or an email comes in from a distributor requesting to resell and or distribute your inventory on the free-sell model. Ask the wholesaler/distributor their monthly gross revenues. If they won’t share with you then tell them you’ll sign an NDA if needed and to do business with your company you require details about their business to make a sound business decision. If the wholesaler or distributor is small or is a startup that is fine, you just want to know what they are ringing, so you can make an offer to the wholesaler/distributor that makes sense for both parties. It has to be a win-win deal. Ask how many tour and activity providers they are representing. Determine an amount of inventory that you would sell at a discount if you got money upfront. Let’s say they are doing $2,000,000 a month and have 250 tour and activity providers, so on average $8,000 a month per activity provider. Give the wholesaler/distributor a discount on your inventory if they pay $1,000 a month pre-pay the 1st of every month. Balance due net 30 days or balance due when their client completes your trip, tour or itinerary. Tell the wholesaler/distributor that you are interested in working with their company over the long-term, that you start the relationship with a low risk investment upfront for a small amount of inventory, then you build up going forward. Try to be flexible but make them commit to some form of a monthly investment. [...]

Posted in Blog, Syndicated

A mobile booking platform is the next big opportunity in the $27B Tour & Activity Market.

In a recent article I wrote at Tnooz, I discuss a big entrepreneurial opportunity I see in the tour and activity market by selling 1-day activities to in-destination travelers via a mobile only booking app. This would be a pure transactional business via traveler’s mobile devices, one that I am very familiar with having successfully built and sold a youth-based ski travel agency or OTA, where we sold ski packages direct to consumers online. Why I am so excited about the opportunity is that the current in-destination traveler purchasing behavior aligns perfectly with the needs of the travel supplier to sell their services direct to the traveler. I learned the hard way as an entrepreneur in a former venture, that it is very difficult to change customer and or consumer buying behavior. You can hit the jackpot if your product or service fulfills immediate demand. Feel free to post a comment about what you think. Matt Zito is an Internet travel business consultant and entrepreneur. Matt works with CEOs, founders and entrepreneurs to help start and grow travel businesses. The Travel Business Academy is a professional online course that helps entrepreneurs start a travel business.

Posted in Blog, Syndicated

How do you start a travel business that becomes a $500M company?

As the founder of the Travel Business Academy, a professional program that teaches entrepreneurs globally how to start a travel business, I am always searching for stories about successful travel entrepreneurs that I can share with our members. Travelzoo is in the news lately, with rumors surrounding an impending sale of the company, so I did a little research online to see what the story was behind the company and how it got started. At the Travel Business Academy we teach entrepreneurs to create one-of-a-kind travel businesses. First, your start up must offer something unique that no one else is offering. We call this the unique-selling-proposition or USP. Second the consumer or business buying your travel service or product must truly want it. The story behind Travelzoo and how solo entrepreneur Ralph Bartel built Travelzoo into a $500M company. Ralph Bartel’s Travelzoo travel website, launched in the late 1990’s during the Yahoo and Netscape .com days, listing special travel discounts and last minute travel deals. Bartel launched the company with a killer USP. He offered 7 million free shares in a Bahamian holding company. As you can guess, the subscribers came rushing to his doorstep. He quickly built 700,000 subscribers, 1.5 million web site hits per day to the website generating $3,000 in daily ad revenue. [1] At the time Ralph was going up against multi-million dollar travel companies that were running similar travel websites. The key differentiator was the lure of a free stock share for subscribing. The .com craze was a wild time and the populist theme was that people all around were getting rich starting Internet businesses. What Ralph was offering was the opportunity for the average person to participate in the .com craze to acquire his or her share of Internet riches. The USP was the idea that by subscribing maybe you to could get rich like everyone else. The interesting thing here was that this had nothing to do with travel. The Travelzoo website and promoting travel deals was just an avenue for people to get what they really wanted, which was the chance to think that they might get rich by being a part of this new travel website. The free stock shares were obvious a gimmick to build a large subscriber base. The hard part was building a business and selling travel deals and offers that people really wanted to buy. Well it worked. Ralph Bartel successfully executed on his travel deal publishing business and today his company is worth close to $500M. I am not recommending that your travel start up offer free shares as I think that would be very challenging today, although there are bills in the U.S Congress and the Senate, that aim to make it much easier for entrepreneurs to sell stock as a start up. I am advising all travel start-ups that you better have a killer USP when launching and have a travel service or product that people want to buy or it will be hard [...]

Posted in Blog, Syndicated

Does your lofty sales goal ultimately hurt your chance of success at the launch of your tour and activity start up?

This is article #4 in a 5 part Start up series for tour and activity travel businesses. In working with travel start ups a consistent theme I come across is the lofty sales expectations the founders place on themselves and their start up at launch. I believe this to be a huge mistake that reduces your overall chances of success. Money gets spent frivolously on activities that focus on attaining a large number of sales at launch and you spend four times as much time doing things that are unnecessary chasing an unattainable sales goal. The biggest challenge in a travel start up is actually starting, meaning doing business, making a transaction. In the early stages of your start up you should focus on a conservative and attainable number of tour and activity sales. The key is to have success coming out of the gate. Out of the gate its initially not about how many you sell but… -that you are selling. -what you are learning from your initial sales. -what kind of experience your client had purchasing and attending your tour and activity. -that you are making a profit on every sale. In the Travel Business Academy- Start up and Growth Program a professional online home study course and membership based website we teach entrepreneurs a start up business strategy and philosophy called the Power of 100™ that establishes your initial sales goal of 100 sales. The start up strategy prepares your tour and activity business to sell 100 bookings, trips or tours. By knowing where you want to go in the beginning and simplifying your sales goal to 100 sales you can build your business more efficiently and spend your valuable time and money marketing and advertising your new tour and activity business with an accomplishable sales goal in front of you. If you sell 100 tour and activity trips you’ll most certainly be on your way to building a successful travel business. Your next steps will then be to structure a business strategy to sell 250, 500 or even 1,000 trips. As part of your overall start up strategy look to scale down your initial sales projections. Focus on a sales level that is accomplishable. This will ultimately save you money from spending foolishly, make your start up more efficient and help you succeed in the initial stages. Matt Zito is a veteran travel industry entrepreneur, consultant and founder of the world’s first ever, Travel Business Academy, a professional member-based, home-study program that teaches entrepreneurs globally, how to start and run a travel business. To learn more visit the Travel Business Academy or email matt@travelbusinessacademy.com

Posted in Blog, Syndicated

Jump start your new tour and activity business through distribution.

5 Tips to starting a successful tours and activity travel business. This is Tip #3. In the first two articles I wrote about how to partner and package to help your start up get business in the early stages. This third article is about implementing a simple distribution system so at launch you have other marketers and or marketplaces selling your tour and activity products. There are many new tour and activity distributors and tour and activity marketplaces like Viator, TourCMS marketplace, Isango, GetYourGuide, Kijubi, Smart Destinations and Kumutu. The tour and activity distribution system has been expanding, just Google “tour and activity distribution,” to find one-to-two distribution partners that fit your business model. Depending on how you run your new tour and activity business it may be smart to allocate a % or a # of your tours and or activities solely for your new distribution partners. If you can find a partner that can resell your tour and activity in real time from your website database or online system this is the best route as this enables you to ultimately maintain all your inventory in one system. Don’t get caught up in paying a commission and or a % of your sales to your new distribution partners when you start your business. Small business owners have this mentality that they think they are loosing money on the transaction when they could be selling it themselves directly. Another way to view paying a commission and or a fee to a 3rd party distribution partner is to view it as an acquisition cost or a cost to acquire a new client. When you start a new business it takes time to determine your acquisition cost per client. A simple equation of an acquisition cost per client is your total marketing and adverting dollars spent divided by the # of clients you acquire. When you start your business you’ll most likely have a marketing and advertising budget and you’ll be spending money to get new business. If your distribution partners acquire you new clients you can use the commission cost or fee paid to the 3rd party as the basis for how much it costs you to acquire new clients. You can boost your business and get off the ground quicker by enabling one-to-two tour and activity distributors to sell your travel product. This is a quick way to get new business fast and it will help you determine the cost to acquire new clients. Matt Zito is a veteran travel industry entrepreneur, consultant and founder of the world’s first ever, Travel Business Academy, a professional member-based, home-study program that teaches entrepreneurs globally, how to start and run a travel business. To learn more visit the Travel Business Academy or email matt@travelbusinessacademy.com

Posted in Blog, Syndicated

Partner with travel suppliers in your destination to create a unique one-of-kind package for your tour and activity business.

5 Tips to starting a successful tours and activity travel business. This is a series of 5 articles to help tours and activity entrepreneurs start a new business. I’ll post one new article each week here at T4. Tip #2: Partner with other travel suppliers in your destination to create a unique one-of-kind package for your tour and activity business. At the Travel Business Academy we teach entrepreneurs how to build online travel businesses including tour operators, destination activity providers and individual guiding businesses. Packaging is the product that trip and tour operators sell to travelers. If you’re an activity provider or a guide and only provide one type of activity you can easily partner with other activity providers and or hotels and lodging providers to create new packages in addition to your core activity or tour product. Packaging for Profits Packaging in the travel and tourism business is all about leverage. To understand the true power of packaging and how it can make your business more profitable, I use leverage as an analogy to help you really understand how packaging works and how it can make your business more profitable. Leverage is simply to borrow to improve your capacity to increase the rate of return. I define packages as two or more travel products combined to create a third unique product. Most travel packages include a lodging component and an activity component. In the tours and activity business you can earn greater profits or increase your rate of return for your business through packaging. In its purest sense you borrow other businesses travel products to increase your economic gain. Let’s look at the numbers and see how packaging works when a lodging property partners with an activity provider. In the mid 1990’s in my early 20’s, my wife and I bought a house in Pennsylvania and created a bed and breakfast named the Yellow Breeches House, next to a famous fly-fishing river. We sold two travel products. Lodging (B&B) and Fly-Fishing guided packages (B&B + guided fly-fishing). Our rooms ranged from $99-$175 per night in season. Our Fly-Fishing Getaway packages were $395 per person and included 2 nights lodging, 1-½ days of guided fly-fishing, 2-dinners and 2-breakfasts. Either a couple or 2 guys purchased the Fly-Fishing packages. At the height of the business we had up to three Fly-Fishing guides. We paid the guides $200 for 1 ½ days of guided work. We paid two restaurants $20 for each dinner and we served our own breakfasts at the B&B. Let’s analyze the numbers and compare selling a room vs. selling a package with 2 people per room on a 2-night weekend stay. A room only with 2 people would gross $350 in our most expensive room, $175 a night. A weekend Fly-Fishing Package with 2 people grosses $790, $345 a night. The package expenses were 1 guide $200, 4 dinners $80, net profit is $510. We made $160 more on the weekend or $80 more per night when we [...]


Posted in Blog, Syndicated

5 Tips to starting a successful tours and activity travel business.

This is a series of 5 articles to help tours and activity entrepreneurs start a new business. I’ll post one new article each week here at T4. Tip #1: Introduce yourself and your company’s services to the established travel business owners and tour/activity operators in the destination you plan on starting your business. A simple way to build a new client base is to reach out and build relations with the established travel businesses that operate in the destination or local area where you are launching. Small business owners in the tours and activity business have a tendency to be territorial and many don’t see the value in building complimentary business relationships with their peers. It’s a huge mistake new business owner’s make. You can implement this strategy to the extreme by reaching out to your fellow tour and activity competitors as well. Introducing your new tour & activity business is as easy as visiting the established travel owner’s place of business. Tell the business owner what your new business will do and give them a few brochures or your business card. If an established travel business compliments your new start up in any way you can ask the owner if they would be interested in establishing a referral relationship. This can be as simple as referring one another’s business by exchanging phone #, email address and or website. In my early 20’s my wife and I got started in the travel industry by building a fly-fishing guide service near the famed limestone trout streams in Pennsylvania. We introduced ourselves to two of the fly-shops in our area and told the shops we would bring in our clients to buy flies and equipment before heading to the trout streams. One shop eventually paid us a commission or % of all the business we brought to the shop. In return, whenever the fly shop referred fly-fishing guides they were for sure to mention our new guiding business. We started a Fly-fishing lodge, Bed & Breakfast shortly after our guiding business got established and again we reached out to not only complimentary lodging businesses and hotels in the area but we built a referral network with other B&Bs. One B&B operated on a higher professional level than the other B&B’s and eventually we just started referring our overflow business to one other. The referral business was taken one step further and we actually sent each other 10% of the bookings. So if we sold a $200 room that was referred by the other B&B we cut a check for $20 and sent it in the mail. When you start sending out checks as referral fees your referral relationships will change and you’ll soon see an uptick in the amount of business you receive. This tip works like magic! Don’t under estimate the power of paying for referral business. As part of your overall start up strategy to build new business, start reaching out to the local travel business owners in your destination [...]


Posted in Blog, Syndicated

The Micro-Tripper—short-term, purely spontaneous travel enabled by the flash-sale, group buying, and private-travel sale start-ups, the new leisure travel market segment on the rise.

In October at T4, I published, “Is the new, private-sale travel site business model the real deal? an in-depth look, into the new social e-commerce start-ups, their business model and how the deals get structured. As an active online travel business consultant in the new social e-commerce travel space (flash-travel sales), I am confirming, that yes, this new business model is the real deal and is starting to create market share. The new social e-commerce travel companies are not intruding upon the OTA’s business but are, in essence, capturing an undiscovered new segment of the travel market that I call the “spontaneous micro-tripper”.  The spontaneous micro-tripper, created via the convergence of social networking and sharing, new e-commerce technology, an extended recession, our insatiable desire to buy deals, and email marketing, the primary delivery path of the new “travel deal” product. The woman in the family leads the spontaneous micro-tripper. Micro-trippers take between three and five trips per year, on one- or two-night stays. Micro-trippers are staying at lodging properties and destinations that 75% of the trippers are unfamiliar with, and/or have never visited before, and did not plan on traveling to. The trips purchased were never consciously planned or pre-planned and an overwhelming number of the purchases by micro-trippers occurred within twenty-four hours of hearing about the trip from their friends and family, or through the email marketing that comes into their email box. The spontaneous micro-tripper is not an OTA buyer (the pre-planned travel market). The micro-tripper market is unlike any mature travel market. I believe this new market is being driven not by the 50%-off deal, like most people think, but by the power of the spontaneous purchase and the opportunity it creates for the lodging industry as a new online distribution channel. The key difference between an OTA buyer and the Micro-Tripper buyer is the pre-planned purchase vs. the spontaneous purchase. The OTA website booking model or sales process supports a traveler’s pre-conditioned itinerary through a trip-quote booking engine, where the traveler, in effect, tells the website where and when he or she wants to go by selecting a destination and arrival and departure dates. This is the main function of the OTA booking model. At every OTA website the traveler voluntarily chooses to visit the website, so in my view travelers are highly pre-conditioned to know where and when they want to travel. Whereas the flash-travel sale, group-buying and private-sale booking model or sales process supports minimal if any pre-planning, and starts out by sending an email to the prospect telling them about a travel deal, travel experience or travel destination that they may have never thought of or heard of before. I have relationships with over 100 directors of sales and revenue managers at many of the major hotels and resorts in North America.  A few have told me that their OTA business is slightly decreasing, while their new “flash-sale, private-sale, group-buying” distribution category is increasing. In my opinion, the recent Groupon and Expedia joint [...]


Posted in Blog, Syndicated

Is the new, private-sale travel site business model, the real deal? I get underneath the hood and reveal how it works.

In this month’s Travel Business Profits e-letter, I look at how the private-sale travel site business model works and why I believe it will be a powerful business model in the online travel industry. As an online travel business consultant, and an intrigued entrepreneur, I have been researching the new private-sale travel websites that have [...]

Posted in Blog, Syndicated