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What are the Challenges Faced by Travel Start-ups

What Are The Challenges Faced By Travel Start Ups

The travel and tourism industry is on the verge of transition from physical offices to web platforms. Travelers from across the world can now book hotel rooms, flight tickets, or higher cars or taxis from their home using mobile devices. 

The most significant advantage of this transition is a global customer base which has encouraged start-ups in the travel and tourism industry. However, there are still many hurdles which the sector needs to overcome to remain in the 'game.' 

Amadeus travel start-up published the results of its start-up survey, titled 'State of travel start-ups 2018', conducted by Skift. According to the report, travel businesses face numerous challenges, including finding the right people, dealing with data complexity, and weak business models.

Travel portal development company like Trip Mega Mart can make a difference to the upcoming travel start-ups by helping them out in creating a B2B travel portal or providing white label portal development services. They build portals with an easy-to-use interface that responds instantly with travel agencies' software integration.

Challenges faced by travel start-ups

1. Founders' team and leadership issues - For a travel start-up to survive, especially during its early stages, it is essential that the founder team needs to have a clear vision, goal, and objective for the company. They must possess the necessary leadership skills and cool-headedness to pass on their mindset to their team.

2. Travel market knowledge limitation - The travel industry is vast and full of complexities. Availing travel data is highly challenging, and so it isn't easy to provide a simple user experience. Also, the limited knowledge of the sales cycle makes this sector all the more complicated.

3. Unprotected business models - The most common challenge in the travel industry is the business model, which requires profitable customer acquisition costs. Some travel start-ups try to balance the pros and cons with higher lifetime value per user against the acquisition cost per user. Targeting the wrong customers can be another problem.

4. Funding challenges - It is common knowledge that one requires enough time and finance to fund the growth of a travel start-up in its early stages. Undercapitalization, running out of cash, and the pressure to generate revenue for investors can divert a start-up's focus from its development.

5. Difficulties related to technology - Accepting the latest technology to provide a world-class simple user experience is necessary. One may underestimate technology challenges or data challenges and overlook these even if they want to keep the user experience simple. 

6. Facing intense competition - A travel start-up may have to face competition from companies with the same business model, hotel chains, flight integration companies, and other OTAs. This competition is further fuelled by the increasing popularity of comparing prices between sites done by the users. 

7. Getting repeat customers - It is very tough to retain customers in the travel industry. An average traveler may make 2 or 3 trips per year. To attract these travelers becomes the most significant challenge because travelers are usually on a shoestring budget, that makes them fall for attractive offers being thrown at them every day. The only way one can counter this problem is to create and implement a customer-centric business model that will help the travel start-up embark on having a loyal customer base with a high turnover rate. One needs a travel portal development company like Trip Mega Mart for providing API integration for airline suppliers.

8. Low-profit margins - The travel industry is a service sector and does not have high margins of profit. The industry attributes the low-profit margins to the Commission-based model that they work on. Also, the functioning of OTA may go haywire, and they have to bear expenses. The only way to get through this problem is by keeping the operational costs as low as possible with the intelligent use of automation and technology.

9. Acquiring data for everyday usage - Data is necessary to grow the business activities of a travel start-up. The power of big data offers actionable business intelligence while keeping track of the competition. But being on a tight budget and lack of technical expertise, travel start-ups often find themselves in a difficult situation to acquire data for their business. These start-ups can quickly solve this problem by outsourcing the web data acquisition through hiring a travel portal development company such as Trip Mega Mart. It will provide quick access to data at affordable rates, making the travel website/portal development cost low with transparent and secure portal development GDS Integration Service such as GDS, XML & API Flight & Hotel Integration


A saturation point is being arrived at by the travel industry, where companies are now choosing a one-stop destination for their customers' travel requirements. When a travel start-up becomes aware of all the challenges they have to face and overcome the rising competition, it becomes essential for them to keep track of changing trends, use the data aggregation, and make better decisions not to get affected by these challenges.

Posted on 21-Mar-2016

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