SKIFT + AMADEUS PRESENT BUILDING THE FUTURE OF TRAVEL: TAKEAWAYS FOR STARTUPS SPECIAL REPORT

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1 SKIFT + AMADEUS PRESENT BUILDING THE FUTURE OF TRAVEL: 5 TAKEAWAYS FOR STARTUPS BY SPECIAL REPORT

2 BUILDING THE FUTURE OF TRAVEL: 5 TAKEAWAYS FOR STARTUPS The travel industry s landscape is changing by way of innovation and disruption from the startup world. From new ways to approach flight shopping to group bookings, concierge services to consumer media, we look across sectors to uncover insights and learnings from founders and CEOs building the travel companies of the future. This paper maps the entrepreneurial journey and lays out essential takeaways for the travel startups of tomorrow. 2 SKIFT + AMADEUS

3 3 SKIFT + AMADEUS

4 THE TAKEOFF IS AN ORIGINAL WEB SERIES FROM SKIFT AND AMADEUS, EXPLORING THE STARTUP MINDSET AND WHAT IT TAKES TO BECOME A NEXT-LEVEL INNOVATOR IN TRAVEL. CHECK IT OUT HERE. 4 SKIFT + AMADEUS

5 ABOUT AMADEUS FOR STARTUPS Amadeus is the leading global technology company for the travel industry that facilitates the entire travel journey - from initial search to making a booking, from pricing to ticketing, from managing reservations to managing the check-in and departure process. Our products, solutions and world-class account management team help improve the business performance of our customers: travel agencies, corporations, airlines, hotels, car rental companies, airports, cruise lines, travel search companies and startups. Amadeus has a long and successful track record and dedicated focus in advising and serving startups and emerging travel companies. Recently Amadeus launched Amadeus for Startups a unique program designed to equip travel startups in the North American marketplace with industry leading technology, expertise and consultative support to navigate the complexities of the travel industry and achieve success. To find out more about Amadeus for Startups please visit and com/amadeusforstartups 5 SKIFT + AMADEUS

6 TABLE OF CONTENTS About Amadeus 4 Introduction 6 1. Have a Clear Answer to the Problem You are Solving 7 2. Stay Fanatically Focused on Your Customers 9 3. Shift from Player to Coach Mentality Be Prepared to Adapt and Pivot 13 About Skift Skift is a travel intelligence company that offers news, data, and services to professionals in travel and professional travelers, to help them make smart decisions about travel. Skift is the business of travel. Visit skift.com for more. 5. Assemble the Best Minds Possible 16 The Travel Startup Journey: From Innovation to Success 19 6 SKIFT + AMADEUS

7 INTRODUCTION I n recent years, travel startups have become the foreground for industry-wide innovation, teeming with big funding rounds, high-profile acquisitions and numerous cases of young companies changing the industry as we know it. The obvious leaders, Uber and Airbnb, valued at $41 billion and $25.5 billion respectively, are creating and moving markets with such force that their incumbent counterparts are left in the wind. They ve effectively disrupted their sectors, and have drawn attention to the travel industry s need for innovation. According to CB Insights Global Tech Exits Report, travel startups have experienced 106% in exit growth year-over-year over the last two years, and in 2014, global mergers and acquisitions in tourism more than doubled in value. Looking forward, Oxford Economics forecasts that the travel industry will grow 5.4 percent annually in the next 10 years, 2 percent higher than the global GDP is forecasted to grow. The future is bright for travel tech startups. This isn t to say that it will be easy for young companies. While the digital era has lowered the barrier of entry for travel startups, there is still the immense challenge to disrupt this increasingly complex, constantly shifting industry and become a key player. Skift and Amadeus spoke with startup founders, CEOs and industry partners from across travel sectors in The Takeoff video series. The following insights are taken from these interviews, along with additional reporting, on what it takes to build the travel brand of the future. 7 SKIFT + AMADEUS

8 1 HAVE A CLEAR ANSWER TO THE PROBLEM YOU RE SOLVING 8 SKIFT + AMADEUS

9 I f you re building a startup in travel, you re joining one of the world s largest and oversaturated industries. It s an industry for those with a big vision, with a promise to make travel easier for consumers. You won t find many moonlighting travel entrepreneurs, but those in it for the long haul. It s important for young companies to determine their utility value. Where does your company fit in a constantly evolving marketplace -- especially in one where your end consumer may only use your product a few times a year? idea? asks Matt Zito, founder of TravelStartups.co, a travel startup incubator and strategic partner for Amadeus for Startups. Identifying the problem you re solving, and laying out a clear answer to that problem is the only way to survive in this crowded marketplace. And the focus should be on a true problem. Travel startups that position themselves as a Facebook for travel are likely to fade away quickly. It s the ones providing true utility value for travelers that are going to succeed. Travel is a really large industry with many companies being started every day. How is your idea unique and different? Is there market fit for this 9 SKIFT + AMADEUS

10 2 STAY FANATICALLY FOCUSED ON YOUR CUSTOMERS 10 SKIFT + AMADEUS

11 Consumer travel behavior changes rapidly and is increasingly geared towards online and mobile. Today s traveler values seamless experiences, immediate information, accurate pricing and actionable, real-time content. In short, modern travelers have increasingly high expectations for their travel experiences and the services they use. It s never been more important to design with the customer in mind. While early stage startups don t have the large customer-base that established travel brands tend to have, they do have the distinct advantage of being able to interact with their customers on a deeper level. Listening and interacting with your core customer base during the early days of your travel startup while you are building solutions allows the focus to remain on the user s experiences. Leverage customer feedback to mold your company in real-time and always build with the end-consumer in mind. Jetaport, a group hotel booking company, keeps its users front and center when building products. According to the company s founder Jason Shames, it s all about delivering products to consumers that makes their lives better, easier and more efficient. For travel startups, keeping that front of mind and being able to provide an initial product that s able to do just that is really at the core of what your mentality should be. Survey your audience, ask them for feedback about your latest product update or service. Figure out from them what you can be doing better and edit accordingly. When you re at the beginning stages, you can build long term relationships with core customers. 11 SKIFT + AMADEUS

12 3 SHIFT FROM PLAYER TO COACH MENTALITY 12 SKIFT + AMADEUS

13 For founders, making the shift from employee to owner comes with its own unique set of challenges. You re no longer executing on another company s vision, but your own, and you have to sell that vision to investors, colleagues, employees...the world. There s a shift in mentality when going employee to owner that needs to be accounted for. There s this idea of being an employee versus being an owner, says Dmitry Koltunov, founder and chief technical officer of ALICE App, a concierge app giving hotel guests on-demand access to on-property services. An employee cares about doing a good job but an owner cares about moving the company forward. It s a player-to-coach mentality that new founders need to embrace. It s stepping away from the day-to-day trudge work and being comfortable with guiding the big picture strategy. The idea of doing a good job changes tremendously, Koltunov continues. Nobody tells you what to do. You make good decisions, your company grows. You make bad decisions, it goes down. You re holding yourself accountable. Fundamentally, founders no longer following attack orders and crossing off action items that affect just one business line. They re charged with creating the strategy and processes that are guiding the team forward and have lasting implications for the company as a whole. That mentality shift was surprising for Bob Albert, founder and CEO of Routehappy, a platform that helps differentiate flights and de-commoditize flight shopping. One of the biggest aspects is the reality that there is no support structure of any kind when you start [a travel startup]. You have to create vision, and process, and product from scratch. It s a true creative process. And I think I even underestimated what was involved in doing that, says Albert. It s this realization that nothing really happens without the leader in a startup doing something, creating something, trying something. So you really have to go out on a limb in many ways and take chances and risks. And get really comfortable with that. 13 SKIFT + AMADEUS

14 4 BE PREPARED TO ADAPT AND PIVOT 14 SKIFT + AMADEUS

15 It s easy to get fixated on your initial idea. After all, it s that idea that drove you to founding your travel startup. But, as technology and consumer interest evolves rapidly, staying open to the idea that your core solutions will change is key. There s little chance your startup won t pivot during its early stages. Staying prepared and open to change is crucial. According to Alix Arguelles, Vice President of Amadeus North America s Online Travel Group, change is inevitable. I think if you look across all the startups we ve been working with, the most common thread is definitely change, says Arguelles. It might be something that is a huge change or full pivoting of their business model, like going from a B2C to a B2B company, or it might be something minor like the way they re thinking about how they re going to roll out a product or service to the greater audience. When I started the company I thought, I know exactly what I m doing, I know exactly what this needs to be, and we re going to be the example of the startup that won t pivot and won t change our vision, says Bob Albert, founder of Routehappy. Of course what happened is that we ve been the quintessential startup in that everything that normally happens to startups happened to us. For Albert, changing courses for Routehappy was essential for the company s success. Originally built as a TripAdvisor for flights, Albert and his team spent immense time creating a comprehensive flyer review platform and collecting hundreds of thousands of ratings from 15 SKIFT + AMADEUS

16 flyers across the world. The problem was, the data didn t always add up. Flyers are very idiosyncratic. Even a frequent flyer may say they have a stomach ache or their kid had the cold and had a bad flight. So we couldn t use data like that. The next attempt was a business to consumer metasearch site that was going to expose flight amenities and features and sort them by happiness, an idea that, while driving media exposure, was perhaps too novel to uncover Routehappy s true value proposition. It was the company s next pivot that they would find most success in, the change that led them to their current business model: platform to help the travel industry differentiate products. Don t be so tied to your product as you first imagined it. Put out your product and figure out where and why people use it, and where and why people don t. And stick to your vision in your industry, but allow your product to change within it, says Alex Shashou, co-founder of ALICE. You can be committed to an industry, you can be committed to a problem in that industry. But it s very dangerous to be committed to a solution, says Koltunov. The most successful founders are the ones OK letting go of an idea at any point as long as it takes them to a place where they re solving a real problem. Don t be afraid to test and refine your company s approach. Test out different products and services while keeping your core values intact. 16 SKIFT + AMADEUS

17 5 ASSEMBLE THE BEST MINDS POSSIBLE 17 SKIFT + AMADEUS

18 Scaling up while facing global competition from legacy brands and other startups is a daunting task that can t be done alone. To face the mounting complexities and challenges in the travel landscape, your team, mentors, advisors and technology partners can be the determining factor of your startup s success. The product we re building is so vast and so complex and so global, that really the only way to do this is to assemble the best possible minds and have them really engage and help us in what we ve done, says Albert. Typically a startup is the brainchild of one or two entrepreneurs. In order to bring that idea to fruition, to make it something real, they have to surround themselves with a really good team, says Arguelles. I like to say that you need to surround yourself with goodness. Whether that goodness is just your team or the partners that you deal with or even the technology that you re using...all of those play a key part in making a startup successful. For many, building a strong team -- being surrounded by goodness -- is a factor that helps early stage startups punch above their weight early and often, and get access to resources otherwise unavailable. We built a product that Google and Expedia are currently buying. We re about to make announcements for more distributors and airlines. And when you play at that level, you have to have a product that s good, credible, secure, safe, reliable, defensible. You build the people and tools to be able to act at that level. It s almost like you see yourself as the big company and you act like that, even if you don t have the same number of people, says Albert. 18 SKIFT + AMADEUS

19 We leaned heavily on advisors in the beginning. We didn t want to let the fact that we were first time founders be a negative. So we wanted to use intelligent people around us who have gone through the process before to help us avoid a lot of the mistakes of first time founders, says Justin Effron, CEO of ALICE. As we ve grown, having industry leaders and experts around us to help us guide through the space has been really incredible. Effron s co-founder, Shashou concurs. A startup is a question. It s an experiment really. You have an idea and it needs to be experimented with and what our mentors have been able to do is open up the doors for us to ask the questions we need to answer. 19 SKIFT + AMADEUS

20 THE TRAVEL STARTUP JOURNEY: FROM INNOVATION TO SUCCESS Entrepreneurs are driven to innovate for many reasons -- passion, curiosity, creativity, problem-solving, achievement, to name a few. They are inspired to take on the challenge of turning today s new idea into tomorrow s next big thing or marketplace disruptor. And that innovative, startup spirit is no more prevalent than in the travel industry. Innovation has always been the hallmark and heart of online travel. Today s travel startups run the gamut from bringing a unique idea to the marketplace to advancing an existing approach to launching a new option in an already competitive space. But regardless of the inspiration or desired outcome, the road from initial startup to relevant, profitable online travel company can be an exciting but long and complex one. Amadeus has long been a supporter of the travel startup community. We have successfully served the entire spectrum of the global travel industry -- from established, multinational travel companies to new, emerging players -- as a provider and partner for more than two decades. Many of our long-term partnerships were startups when we began working with them. Through the years we have grown together, adapting and pivoting in an ever-changing business environment. We share a commitment to innovation, and know that at any moment a great game-changing idea can come on the scene and take the marketplace in a whole new direction. 20 SKIFT + AMADEUS

21 It is with that commitment that we launched one of our most recent initiatives, Amadeus for Startups. This unique, industry-first program directly supports the entrepreneurial and creative spirit ingrained in startups and supports new travel companies in all capacities and at all stages of their journey. Our mission is clear: to provide leading technology, resources, expertise and consultative support that enable online travel startups to establish or advance their business, navigate the complexities of the travel industry and position themselves for success. At Amadeus, we look forward to continuing to help foster the innovation, energy and creativity fueled by today s startup community and the travel industry overall to deliver success and shape the future of travel together. Scott Gutz President and CEO Amadeus North America 21 SKIFT + AMADEUS

22 ABOUT SKIFT Skift is a business information company focused on travel intelligence and offers news, data, and services to professionals in travel and professional travelers, to help them make smart decisions about travel. Founded in 2012 by media entrepreneur Rafat Ali, Skift is based in New York City and backed by Lerer Ventures, Advancit Capital and other marquee media-tech investors. Visit skift.com for more. LIKE WHAT YOU SEE? Skift s new content studio SkiftX helps brands such as Amadeus, American Express, MasterCard, Adobe, Hilton, and others create thought leadership in the global travel industry, throughtrends reports, research, branded content, social media audits and other content marketing initiatives, and helps distribute throughits industry marketing platform. Contact us for more details: Rafat Ali Founder & CEO, Skift SKIFT + AMADEUS

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