Learn how to launch and grow a "real," home-based online travel business from a veteran online travel entrepreneur who has sold $3,000,000 in online travel from his home-based office.
Post Date: May 11th, 2012
Welcome to the newest members of the Travel Business Academy.
Scott R. United States
Woochan J. United States
Robyn J. United States
T. Robinson United States
Travergence Interactive – Travel Supplier Member- United States
Elisa B. United States
Robert N. Belgium
Post Date: April 26th, 2012
I just published a new article at Tnooz titled, Facebook IPO filing reveals disruption ahead for online travel. The article is being read by hundreds of people and I’ve received a dozen LinkedIn requests and three phone calls concerning my view of where Facebook is going and how the platform will effect the travel industry. Feel free to comment as well.
Post Date: April 18th, 2012
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 as hell to make it.
[1] Businessweek.com – TRAVELZOO.COM’S MYSTERY MAN RALPH BARTEL
http://www.businessweek.com/bwdaily/dnflash/july1998/nf80731a.htm
Post Date: April 9th, 2012
Welcome to the Travel Business Academy. Our newest members are travel entrepreneurs from around the world.
Felicia B. Nigeria
Christoper H. Vietnam
Art W. United States
Michael B. United States
Loris I. Italy
Mark M. United States
Kateryna L. Ukraine
Mike C. United States
Andres G. New Zealand
Post Date: April 8th, 2012
This Fall I attended the Eye for Travel, Travel Distribution Summit in Las Vegas as the expert moderator of the social group buying and flash sales session. It was a superb conference and I got to meet upcoming travel entrepreneurs including the team at Gogobot and a few wily online travel veterans. The talk of the town was Mobile Travel. Two of the world’s largest hotel chain brands presented slide’s that looked like hockey sticks showing massive growth in travelers booking hotel rooms with mobile devices.
The two hotel chains said that, 90% of the mobile bookings were either same day or within 72-hours of arrival, so the current mobile device hotel booking usage is showing that travelers are using their mobile devices for last minute lodging needs. I also met Sam Shank, co-founder of Hotel Tonight and saw a presentation about their mobile booking app. Hotel Tonight’s mobile hotel booking app is for booking hotel rooms at major U.S. cities on the same day of arrival or booking tonight. If you haven’t seen the Hotel Tonight mobile app or have not booked a hotel room with it, go to the iTunes store or Google Play (Android) and download it.
The mobile app landscape is being built out with thousands of new mobile apps coming to the market on a daily basis. Just as the Internet exploded in the mid-to-late 90’s with travel businesses needing websites and online booking engines, there are millions of travel businesses that are going to need mobile online booking apps. If you’re a hotel or travel business owner, I would start talking with a mobile app developer today as you could have a 1-2 year lead out in front of your competitors by having a mobile app to capture that short-term travel booking.
I say this because during the conference one of the moderators polled the audience of around 200 people on how many companies at the conference were going to invest in mobile technology in 2012 and less than 12 people raised their hands. I was quite amazed actually, especially after most of the people had attended the mobile travel sessions and saw the staggering growth in mobile device bookings by the big hotel brands.
Does Your Company Need Mobile Development Help? One company that I like in the mobile app development space is Red Foundry. Checkout their user friendly development platform here at http://www.redfoundry.com Another talented web and mobile developer and good friend of mine is Craig Kaminsky. You can reach him here. http://www.imageaid.net/
Join Matt Zito’s LinkedIn Network- http://www.linkedin.com/in/mattzito
Post Date: April 4th, 2012
On March 30 Facebook restructured the Fan Page design to what they now call Timeline. Your businesses landing page will now be the Timeline page. I recently added a Timeline cover for my Maine Vacation rental home and the Travel Business Academy fan pages. If you need help with making a Timeline Cover just email me and I’ll point you in the right direction really quick.
Facebook’s is expanding the sharing capability for travel businesses by introducing Timeline Apps built on Facebook’s Open Graph. If you haven’t read about this go here now and read this. http://developers.facebook.com/docs/opengraph/
Travel Businesses can now create Timeline apps that publish a Facebook’s users activity and actions when they engage with your app or website. Facebook calls engagements or interactions with your website or app, social actions. The first social action app was the Facebook “Like” button that you placed on your travel website. When a Facebook user clicked the “Like” button on your website, Facebook published that the Facebook user liked your website or Fan page to the Facebook users wall and their friends news feed. The new Timeline apps move beyond the Like button action and basically create a massive distribution system for your company to share “what people do” or different actions they take when interacting with your app or website. Social actions that your travel business can now distribute, are user actions like “traveled” to Orlando, Florida, or “travelling” to Orlando, Florida.
When a Facebook user, adds a new Timeline app to their Facebook Timeline, the user has to opt-in first (accept to use the app) and then give the app permissions to access their Facebook account. The users actions, “what they do” in your app is then published to their wall and distributed to their friend’s news feed and throughout the Facebook platform.
I believe Timeline apps will have massive ramifications for the web and the travel industry. I am fairly sure that the real intent of Facebook to go beyond the Like button and enable the distribution of multi-faceted actions and engagement or “what we do” on apps is because of mobile devices.
Timeline apps are a game changer and will help travel businesses share their prospective clients and guests actions and experiences within the Facebook social platform. This will drive new travelers to use your companies Timeline app, which ultimately will bring your travel company more business.
Join Matt Zito’s LinkedIn Network -http://www.linkedin.com/in/mattzito
Post Date: April 1st, 2012
Interview with Amber Gibson, from HOTELS Magazine about the Micro-Tripper.
Amber Gibson: Do you see “micro-tripping” growing as a trend for Americans? Internationally?
Matt Zito: “The Micro-Tripper” is a term I coined to describe a new type of travel buyer on the rise. 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. The Micro-Tripper trend will continue to grow in both the U.S. and Internationally, as global economic conditions continue to deteriorate and travelers look for vacations and getaways that are shortened in length from 3-7 days to 1-3 days.
Amber Gibson: Why has micro-tripping become so popular? Does it have to do with lifestyle changes? Can you give any specific examples?
Matt Zito: In the U.S people are working longer hours and earning less money. Travelers are looking for 1N-2N getaways where they can get away, enjoy a new experience, and partake in a destination activity. The Micro-Tripper trend has been ignited by the new social e-commerce travel offerings from, Living Social, Jetsetter and lifestyle platforms like BuyWithMe. The trend has been created by 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.
Amber Gibson: From a hotelier perspective, what can hotels do to appeal more to micro-trippers?
Matt Zito: Hotels need to be open to the idea of working with the new social e-commerce travel companies. The social e-commerce travel companies and lifestyle platforms are a new distribution channel. I view the 50% off sales as a new distribution channel to not only place heads-in-beds but to build new clients for the hotel. I owned a small lodge in the early 2000’s and was able to generate a repeat clientele of between 15%-25%. Acquiring new clients is one strategy where I think this new channel makes sense. I have been working with a few of the new social e-commerce players and I have a network of over 100+ revenue managers and directors of sales at boutique hotels throughout North America. My work and analysis says that 80%-90% of Micro-Trippers are new clients to the hotel properties.
Amber Gibson: Do you have any advice for hoteliers on how to capitalize on this new type of traveler?
Matt Zito: Yes, start by partnering with a few of the social e-commerce travel players and run a few sales. Get your feet wet see how it goes. I would also start looking to create my own one-of-a-kind travel packages that are 1N, 2N in duration, include dinner or a meal, with one-to-two destination activities. Hotels talk about generating ancillary income through selling hotel owned products like spa, for example. What I don’t understand is why they can’t reach out into their destination and start creating incremental revenue streams from the many activity providers that are in their local communities. There was a recent study done by Phocuswright that concluded that the destination activity market in the U.S. is a $28B market. The majority of destination activity providers either don’t have a website and or can’t even take bookings online. Why not create an opportunity for your guests to more easily reach these businesses in your destination and make money at for the hotel? I am really passionate about this and I am currently looking to work with a few hotels to develop plans to integrate this into their business model.
Amber Gibson: How can hotels convert micro-trippers into loyal customers?
Matt Zito: Micro-Trippers are people and consumers like everyone else. A hotel needs to create value, offer an amazing experience and of course be hospitable. The myth is that Micro-Trippers won’t come back and pay full price when they have previously gone on a discounted trip. This is entirely not true. It’s like anything else in travel. If you have a great travel experience and make an emotional connection to a place or people you meet, you will return and pay full price because at that point its not about the money.
Amber Gibson: Do micro-trippers tend to return to the same location(s), or are they always looking for new experiences?
Matt Zito: I don’t have the research data on the answer to this question but I am planning a big survey to my 100+ hotel contacts this Fall to gage their feedback on selling to the social e-commerce websites and I hope to have more insight to this question. If your hotel is interested in participating in my survey please contact me.
Amber Gibson: Why is it important for hotels to zero in on this new group?
Matt Zito: It’s important because, Micro-Tripper’s are not online searching a vacation to your hotel or destination like a traveler who is visiting an OTA website or visiting your hotels website and pre-planning a trip in the traditional sense. 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.
Post Date: March 27th, 2012
In October, 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 erode the OTA’s 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 spontaneous micro-tripper is led by the woman in the family. 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 venture is not about Expedia seeing this as a threat so much as an opportunity to enter into this new market, one that their current business model does not support.
My final point for this article focuses upon the lodging industry’s distribution needs relevant to the market it’s distributing into. If you’re in agreement with me that your OTA distribution channel is to reach travelers that know they want to visit your hotel or the destination your property is in, and you agree that the spontaneous micro-tripper market is a new market segment, you’ll have to view the flash-sale, private-sale and group-buying companies as a new online distribution channel. You need to think about how you value an OTA booking vs. a Micro-Tripper booking.
A successful flash-sale, private-sale or group buying sales offer is 50% off to the Micro-Tripper with the lodging property paying a 20%–40% commission. The 50%-off offer is the bait that attracts Micro-Trippers from inside their computer. A 50%-off offer with a 30% commission is an effective 65% off your best available rate. I won’t get into economics too much in this article as I realize that each lodging property is different and has its own unique needs in yielding rates. My intent here is to help you see the value you need to offer to acquire a spontaneous Micro-Tripper.
If you’re distributing to the OTA distribution channel you’re offering between 20%-35% off your best available rate, 35%+ to the opaque OTA channels. The purchaser in both channels is a pre-conditioned buyer, or has pre-planned their travel, and is highly likely looking to directly book your hotel and/or visit your destination or area. For whatever reason, this buyer is going through the OTA instead of going through your property website direct. My point here is that an OTA travel purchaser is most likely coming to your hotel or destination no matter what.
So how do you value a micro-tripper who is unfamiliar with your lodging property and possibly your destination, was never pre-conditioned or never planned on visiting your lodging property, and who, once introduced to your property through a branded and highly discounted lodging offer or package, decides to book a micro-trip of one or two nights?
I believe the answer to this question ultimately varies with each individual hotel and lodging property. As a side note, I owned a bed and breakfast, fly-fishing lodge in my earlier twenties, so I’ve had experience managing and putting “heads in beds”. Yes, on a small scale, but I’ve been there.
The new distribution channel makes sense, purely as a new client acquisition strategy, if I convert but 15%–25% of the Micro-Trippers who visit my property on 50%-off deals as repeat customers over my client lifecycle.
There are then—in my opinion—some secondary benefits; heads in beds, increased occupancy, in-house ancillary income generated, and the marketing exposure your brand will get from being displayed in 1,000,000+ email boxes.
The Spontaneous Micro-Tripper is a new leisure travel market segment that your hotel or lodging property will want to distribute into. I believe that this new market opens up huge opportunities for destination-based hotels, lodging properties less than a three-hour drive from major U.S cities and seasonal properties.
If your hotel, resort or lodging property is interested in participating in this new and fast growing marketplace or you would like to learn more about it, please contact me.
Matt Zito is an active online travel business consultant in the new social e-commerce travel industry, helping both online travel companies and lodging properties build and grow their businesses. www.mattzito.com, mdz@mattzito.com, 207-460-0740
Post Date: March 15th, 2012
We have 20 entrepreneurs from around the world starting new online travel companies. Italy, Spain, New Zealand, United States, Canada, United Kingdom, Ireland to name a few. If you ever wanted to start a travel company now is the time.
Post Date: February 8th, 2012
Rhonda C. is a new member of the Travel Business Academy– Start up & Growth Program. I recently spoke with Rhonda by phone about her plans for starting a tennis tour operator/trip operator business.
Professional Background: Rhonda is currently a teaching tennis professional on the East Coast, with a former product marketing background in Los Angeles, collaborating on the Serena Williams tennis line for Puma years back. Rhonda’s goal is to build an online business that she can transition into as her next full time career.
Travel Business Start up: Rhonda is pursuing a tennis tour operator/trip operator business that will take USA travelers to Spain to experience the finest facilities & in vogue Spanish teaching methodologies of today’s top pros. She is leveraging her tennis connections both here in the USA and in Spain to help jump-start her new business.
Overcoming Fear: Fear and greed are an entrepreneurs two biggest downfalls. While speaking with Rhonda she asked if it was normal to be ‘afraid’, as she is noticing fear in this new venture. I told her that if she didn’t have some fears that she wasn’t normal and fear is just part of the start up process. It will subside and even may completely remove from within, once she take action and begins to build momentum. In the Travel Business Academy we teach the Power of 100, a start up philosophy and sales goal that teaches you to build a business and start with the goal of selling 100 bookings or reservations.
When you start any new venture fear will play its part. Fear enables inaction. Fear immobilizes us from moving forward. By establishing a goal of 100 sales and or bookings we set a path in front of us thus we remove many obstacles that stop most entrepreneurs from even getting started. As you take action and move forward and gain momentum your fears will subside. But not until you take action will your fears subside and ultimately be removed from your psyche.
Current stage in the start up process: Rhonda is currently working through Module #2 of the Travel Business Academy and soon will be calling on potential travel supplier partners in Spain. As part of the membership the Travel Business Academy has a private members forum where members can post questions directly to Matt Zito. Rhonda has been utilizing this part of the membership service and Matt has been answering questions for her on a weekly basis. In addition to posting questions to Matt about building a travel business members can network amongst each other and share information about their progress.
How Rhonda found the Travel Business Academy: Rhonda read a blog post that Matt wrote on a 3rd party travel industry website then researched who Matt was professionally and his travel accomplishments in the travel industry. She said that there is nothing like the Travel Business Academy anywhere online and that the Academy is a one-of-kind start up program and membership website geared solely to entrepreneurs looking to start a travel company.
Travel Agent/Agency Home Based Programs: Rhonda said that there are many ‘cheesy home based travel agent programs online’ but they simply promote how to sell other tour operators products. Rhonda says, “The home based travel agent programs don’t teach you how to build an actual tour operator business, like the Travel Business Academy does.”
Rhonda C. is on her way to building a new career and developing the foundation for a successful travel business. Stay tuned for more developments on Rhonda and her new tennis trip/tour operator business. We wish her all the best in her pursuit of building a new travel business.
Post Date: January 31st, 2012
Recently a member of the Travel Business Academy asked a question regarding the terms inbound, outbound and receptive. These three terms related to tour operators or trip operators and what type of travelers they sell or market too.
Inbound Tour Operators receive travelers also known as receptive tour operators. Inbound tour operators receive travelers from another country that are traveling into the country where the tour operator operates. Example, a British/UK Inbound Tour operator would sell trips to USA travelers coming into the UK.
Outbound Tour Operators send travelers from the country they operate in to another country. Example, a British/UK Outbound Tour Operator would sell trips to UK travelers looking to go to the USA.
Post Date: January 31st, 2012
In working with travel startups 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 startup you focus on a conservative and attainable number of tour and activity sales.
I believe one of the keys to building a viable travel start up is to have success early on or right out of the gate.
Out of the gate;
-It’s not about how many you sell but that you are selling.
-It’s not about how many you sell but what you are learning from your initial sales.
-It’s not about how many you sell but what kind of experience your client had purchasing and attending your tour and activity.
-It’s not about how many you sell but determining how much it actually costs to make one sale.
In the Travel Business Academy- Start up and Growth Program a professional online home study course and membership based website we teach a start up business strategy and philosophy called the Power of 100TM 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 plan to sell 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.
Post Date: January 14th, 2012
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 integrating a simple distribution system so at launch you have other marketers and or marketplaces selling your tour and activity products
Last year I wrote a 35-page manifesto I coined SECRETS of the online travel business, the PPD Strategy. PPD stands for partnering, packaging and distribution the three core elements of every successful travel business.
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.
Post Date: January 7th, 2012
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 sold a package into this room. That same room is now worth $255 per night. Multiply this by more than one room and you can see how the business became more profitable quickly.
| 2 Nights for 2 people | Package | Room only |
| Price | $790 | $350 |
| Guide expense | -$200 | $0 |
| Dinner/Breakfast expense | -$80 | -breakfast included |
| Net Income | $510 | $350 |
| Additional Profit | $160 | |
| Income Increase | 45% increase in income by selling a package vs. room only. |
As a tour and activity provider you most likely don’t own a lodging property but in your destination you can probably find at least a dozen potential lodging partners. Create a sample package with lodging as your major expense and see if by selling a package can you earn more profit on your tour or activity by selling it as a package. If yes, it’s worth trying to add at least 1 package to your tour or activity product line. It’s just a matter of finding a few lodging partners.
Geoffrey Warner a master furniture designer and creator of the famous Owl Stool in Stonington, Maine, offer’s vacationers to Maine a handmade Owl Stool workshop as an experiential destination activity. Maine is renowned for handmade products. Vacationers take a 1-day workshop at his studio and go home from their vacation with an Owl Stool, made with their own hands. This year Geoffrey plans on selling a package to vacationers that includes 1 night lodging at a local B&B and the 1-day Owl Stool workshop.
The power of packaging is that you borrow other travel supplier’s products and unlike financial leverage you have no or limited expenses to borrow as you are just forming partnerships with other travel and tourism businesses in your destination.
An increased profit is the core strength of packaging. Other benefits include the following; the client buying a package is less likely to cancel a trip, your business fosters new business relationships within your community and you create win-win deals for others. Creating packages enables you to quickly move with trends and fads in the travel and tourism industry. If something is “hot” this season you can create a package for it.
As part of your overall start up strategy to build new business, look to create a package that increases the profit of your core tour or activity product by partnering with one or more travel suppliers in your destination.
Post Date: January 1st, 2012
This is a series of 5 articles to help tours and activity entrepreneurs start a new business.
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 the business. 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 of the two 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 or area and start building peer-to-peer referral relationships.
Post Date: December 14th, 2011
Joe Hurley, the CEO of Hurley World Travel is a Travel Business Academy–Start up & Growth Program Consulting member-client. Joe is going through the consulting program to develop a golf trip/tour operator business, targeted at golfers from the Washington DC/Baltimore area. He has identified his niche travel product as a all-inclusive golf package at a high-end all-inclusive resort in Mexico.
Joe is currently in the negotiation process with a major resort working on preferred wholesale lodging rates. Utilizing the Travel Business Academy’s Start up Modules and the consulting services of Matt Zito, Joe has successfully identified his niche core targeted buyer, established a niche geo-location to sell his product into upon the launch of his travel product and he has used the sample contracts and sample pitch and solicit letters to make contact with the director of sales and USA reservation agent at the resort. He will soon be receiving his first proposal from the resort including the resorts wholesale lodging rates.
Joe and the Hurley World Travel Co. are on their way to building a golf tour business.
Are you ready to start building your own home-based travel business?
Post Date: December 12th, 2011
At the Travel Business Academy we teach entrepreneurs how to start non-travel agency type travel businesses. We teach the following 5 travel business types, all of which are considered non-travel agencies.
Member-only, Private sale, Flash sale, Group-Buying travel websites
Trip/tour operator businesses
Destination Activity businesses
Tour Guide, Guiding businesses
Travel Brokers
Note* The Travel Business Academy- Start up & Growth Program can be applied to any country in the world. Travel is a worldwide product purchased by everyone. When it comes to travel laws each country and local or region has its own legal jurisdictions.
USA Travel agencies and travel agents are heavily regulated and require licensing and certifications. The travel business types we teach have minimal licensing and or no certification in the U.S. One way to think about this easily is that if your travel business sells or packages air and or sea transportation into any of your travel products then you will be highly regulated. This is why travel agencies and travel agents in the U.S. have all the regulations and certificates because the majority of the travel that travel agents sell is air and sea travel products and packages.
In the USA & Canada there are what they call “Sellers of Travel Laws.” These are state consumer protection laws that are to protect residents of each state in buying a travel product from a travel agency or tour operator.
In the Travel Business Academy we have a 65 page PDF that was written by a travel attorney that covers “Sellers of Travel Laws” for 18 states and Canada.
Before starting any travel business you should check with your local, state and or country state licensing jurisdictions.
Post Date: December 8th, 2011
This was one of our most popular blog posts last year at my business consulting website MattZito.com so I thought I would publish it here at the Academy as well. In the Travel Business Academy we teach entrepreneurs how to build online trip/tour operator businesses. Packaging is the product that trip and tour operators sell to travelers.
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 tourism 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 leverage works in the tourism business. 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 three Fly-Fishing guides . We paid $200 for 1 ½ day of guided work. We paid two restaurants $20 for each dinner and we served our own breakfasts.
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. A Fly-Fishing Package with 2 people grosses $790. Expenses are 1 guide $200, 4 dinners $80, net profit is $510. You make $160 more on the weekend or $80 more per night when you sell a package into this room. That same room now is worth $255 per night. Multiply this by more than one room and you can see how your business becomes more profitable very quickly.
The power of packaging is that you borrow other travel suppliers products and unlike financial leverage you have no or limited expenses to borrow as you are just forming partnerships with other travel and tourism businesses in your community or area.
An increased profit is the core strength of packaging. Other benefits include the following. The client buying a package is less likely to cancel a trip. Your business fosters new business relationships within your community and you create win-win deals for others. Creating packages enables you to quickly move with trends and fads in the travel and tourism industry. If something is “hot” this season you can create a package for it.
Packaging can be implemented and sold by not only lodging properties but by tour guides and individual businesses engaged in the travel and tourism business.
Geoffrey Warner a master furniture designer and creator of the famous “Owl Stool” in Stonington, Maine, offers local Bed & Breakfasts his handmade Owl Stool workshop. Innkeepers are packaging the workshops with their lodging. Guests of the Inns take a half-day workshop at his studio and go home from their vacation with an Owl Stool, made with their own hands. This is another example of packaging. Next year Geoffrey plans on selling his own packages directly to his clients in addition to the B&Bs selling and leveraging his areas B&B rooms.
Post Date: December 8th, 2011
We launched the opening of the Travel Business Academy-Start up & Growth Program today on December 8th. I will be posting a weekly Blog post about the entrepreneurs and individuals that are building travel businesses in the Academy and I’ll be answering questions about the Travel Business Academy that some of you have been emailing in.
Thanks,
Matt Zito
Founder, Travel Business Academy
