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Top 5 Revenue models for Travel startups

The travel sector is experiencing one of the highest revenue growths with people looking for new adventurous experiences, quick business stop overs or relaxing vacations at numerous destinations all over the world. Travel start-ups are cropping up everywhere connecting the huge customer base to prospective destinations along with airfare, hotel stays and activities.
Revenue models for travel startups aim at offering services to both the customers (travellers) and the sellers (hotels, transportation companies etc) and receive income from both parties.

Innovative travel startups provide customized vacation packages, booking, activities and audio-visual guides to attract customers and succeed in the competitive environment. Most travel platforms use a variety of business to business (B2B) and business to customer (B2C) models to generate large revenues from their services.

 

1.Peer to peer networks

Type of startup:  Vacation rentals marketplace, Host-traveller marketplaces

These websites aim to create a sharing economy where travellers get in touch with property owners offering rooms or houses on rent for the duration of their stay. They provide a portal for booking these rooms and take a commission from both the buyer and the seller. They offer affordable and flexible travel opportunities making them more popular than vacation packages.
eg. Airbnb, Homeaway

 

2. Meta-search revenue models

Type of startup: Booking platforms, online travel agencies, marketplaces

Metasearch is a search engine that tells users the real time availability and pricing, along with the location, description and reviews of various hotels and travel packages across the internet.  It’s extremely popular as users can compare rooms across hotels easily and immediately book their vacation at the best prices.
eg. Kayak, TripAdvisor makes upto 70% of its revenue with metasearches along with cost per click advertisements

 

3. Subscription revenue models

Type of startup: Online travel agencies, social travel platforms

Resorts and hotels can tie up with the agency (B2B) and users can view descriptions and contact details about the hotels through the website. Airlines, local taxis etc also tie up with these agencies as customers like to plan their entire trip from their homes. Subscriptions are a recurring revenue stream which is necessary to any travel startup as customers tend to book vacations only once or twice a year.
eg. MakeMyTrip

 

4. Partnership revenue models

Type of startup: Social travel platforms, online travel agencies

Users interested in travelling to a particular destination find advice, descriptions and reviews from other travellers on social platforms. Online agencies and booking platforms like MakeMyTrip are looking to expand their customer base and stay ahead of the competition by partnering with these social travel platforms with huge communites.The partnership can provide a much needed recurring revenue stream for a startup.
eg. Gogobot, Guidoo

 

5. Display advertising revenue models

Type of startup: Online travel agencies, booking platforms, marketplaces, any

Advertising will never go out of business as the competition gets tougher and ad space is highly sought after.  In this advertising model, hotels and clients feature on the website through pages, advertisements or suggestions. When a user clicks on the link and goes to the client website, the travel website is paid a fee by the client (Cost per click – CPC). Another stream of revenue is through a cost per thousand impressions (CPM), paid by the client depending on the number of views.
eg. TripAdvisor

About the author

– Srishti is passionate about learning new things, writing and understanding the startup landscape. Currently studying computer science and interested in business and technology

About Srishti