Posts Tagged ‘travel trends’

I read about a new one everyday: JetsetterVacationist, SniqueAwayTripAlertz, VoyagePrive, RueLaLa,  Hautelook GetawaysSecret EscapesHotelyo, and there are still many more.  Even Expedia is getting directly into the space, focusing on lower end properties with its ASAP.

Companies can’t seem to get into this market fast enough, which is fair, as all it takes is a slick website and a persistently charming sales rep to start the business.  Thousands of “luxury” rooms go unsold everyday, it’s not that hard to sign the hotels up on the promise of helping them unload some of that extra inventory.  And once you’ve got your website and your products, the economics are beautiful.  Sure there’s some sales and marketing, but for the most part you can just sit back and collect your commission as users and hotels connect on your platform.

Easy, right? No wonder there are already so many players in this market.  No, not quite. User acquisition is the hardest, and often most overlooked, step in the process.  The most successful companies in this space have leveraged big advantages in that arena.  Jetsetter, for example, was built off of Gilt Groupe’s existing userbase (1.5M at Jetsetter’s launch). SniqueAway and Vacationist are younger and as such still unproven, but they are both backed by large, well-respected brands: TripAdvisor and Travel+Leisure, respectively.

So what’s next? I think the proliferation of new entrants to this market is going to continue at least through the first half of 2011, most with some unique twist on the idea or a specific niche to target. In the long run though, this market will consolidate. Users, the critical variable in the equation, can only put up with so many daily, or even weekly, emails. In the hotel deal site space there has been no GroupOn – no company that captured the majority of the market before anyone else jumped in – but I have no doubt it will end with a similar, winner-take-most market fragmentation.

The company that will win this market will be the one that builds the largest and most dedicated userbase. While no doubt smaller companies will emerge along the way with innovative new product offerings and marketing strategies, players with pre-established userbases will quickly copy or acquire them in order to maintain their lead.  The nature of the product offerings still has a long way to go in 2011, but I think we’ve already seen the masthead of the future winner.


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