July 2017 Meetup – Blockchain and a few ideas how to beat the Duopoly
On a rooftop, one hot summer day in TLV, the monthly Meetup of the Israel TravelTech Startups (ITTS) was held, with participants from 100 Israeli start-ups. Perhaps one of these promising start-ups will, in the near future, be one of the leaders of the world TravelTech industry. It is certain that everyone here wants a piece of the travel industry’s yearly revenue of a few trillion dollars. Those who dare to create a trustworthy product/service that saves time and money will have a chance to reach great numbers of users looking for a vacation.
2 primary concerns:
- Blockchain, Digital Currency and TravelTech
- Cutting profit margin between the booking platforms and customers
Blockchain and the Travel Industry
Blockchain is changing the way we relate to money, from writing contracts to making payments. A $100 bill is just a piece of paper; its value comes from the trust we have in the various governmental enforcement agencies and financial institutions. This trust endows the money with credible value for which you can exchange for goods and services. Blockchain will change everything! Contracts will be B2C and P2P (peer to peer). A quick example – a customer will hop in a taxi and an online Blockchain contract will be initiated between the driver and the customer. It will be trustworthy, because the data will be placed in an online ledger that will be copied tenfold to thousands of servers and computers worldwide. The payment will be made online per every kilometer the taxi travels. This is just an example to illustrate the absence of bills, banks, or any enforcement agency whatsoever. Beware – any TravelTech company that plans to make a profit, mid or long term, as an intermediary between customer and supplier will not be needed in the sales process. In the future, a Blockchain contract will be made directly between customer and product/service, and payment will be made with bitcoin or any similar digital currency. So start-ups that are planning their path as intermediary, please re-evaluate.
Credit: Iris Friedman
Who is going to beat Expedia and Priceline?
As a rule, on the internet, 99% of users use 1% of websites. This is also true in the travel industry. Expedia and Priceline (Booking.com, Kayak etc.) took the cake and are generating together a yearly revenue of $19 billion. We met a few Israeli start-ups looking to give a better value. It is said already that the cookies raise prices according to users. The big players take a 20% commission (approximate) as part a hotel booking transaction. So between the cookie that adjusts prices and a 20% commission there is a large margin that can be cut. Here are a few examples of start-ups that are looking to give us a better, cheaper service:
- Pruvo – https://www.pruvo.net
Book your hotel room through one of the booking platforms with free cancellation. Send Pruvo your reservation. If they will find your exact booking cheaper, they will get back to you with a cheaper offer. Cancel your original booking and book through them. Apparently there is up to a 40% price drop even after reservations are made. Provu can locate this price gap between your reservation and theirs. It is worth checking out – nothing to lose.
- Better Hotel – https://www.betterhotel.com
Well, same idea different concept. Better Hotel can monitor your reservation up to the last moment. They will monitor prices a few times every day. If they find a better hotel for the same price you paid, they will book it. You have earned a free upgrade. Book your vacation through a booking platform with free cancellation and give it a go with Better Hotel for a great upgrade and a more enjoyable vacation.
3. Splitty – https://www.splittytravel.com/
Splitty have a different approach to get better prices. Give them your booking request, and they will get you a better price than the big booking platforms. Splitty splits your reservation to reservations blocks, enabling them to achieve much better results than other booking methods. Again, I would say it is worth checking this option.
Clearly there is room for improvement in price and quality between hotels and customers. In a market worth of billions of dollars, companies that can create better value for consumers will get a share. Start-ups that act quickly enough, grow fast and create a loyal base of a few million users will stand out and create big traction.
For information about Tourism at the Future see also our FB.