Find your niche by putting a spin on your online travel business.
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This story first appeared in the September 2008 issue of Entrepreneur. To receive the magazine, click here to subscribe.Expedia, Orbitz and Travelocity have dominated online travel for years, but that hasn't stopped a slew of startups from setting their sights on web travel--especially now that U.S. sales in the segment are expected to hit nearly $110 billion this year, according to eMarketer.
UpTakeis one travel startup that works outside the usual price comparison format. Started in 2006, the travel search engine brings together information from around the web and presents it in a friendly format that lets users search by themes such as "romantic getaway" or "pet-friendly." "Our goal is to aggregate and collect all the information out there, especially the unstructured content like reviews, blogs and articles," says Yen Lee, 41, co-founder of UpTake along with Gene McKenna, 38, and Elliot Ng, 40. "We analyze it and organize it so it's easier for consumers to do what they want to do naturally."
The Palo Alto, California, company targets consumers who may not know their exact travel dates or destinations and are overwhelmed by the excess of travel information on the web. "It's such a big unaddressed opportunity, and there are so many angles," says Lee. "We really wanted to focus on the biggest consumer problems first." UpTake landed $4 million in an initial round of funding in 2006, thanks in part to Lee's 12 years of experience working for web travel and search companies like CitySearch and Yahoo Travel.
Travel startups need to take an innovative approach to stand out from the crowd of social media and price-oriented shopping sites. UpTake built its search engine from the ground up and bases its revenue model on advertising and lead generation. "We're not trying to cut through the noise," says Lee. "We're not trying to build a big consumer brand. Our goal is to do this naturally." He recommends that entrepreneurs interested in online travel address specific consumer needs and uncover niches that can complement existing dominant travel sites.
Marketing can be a challenge for travel startups of any stripe, so UpTake focuses on designing pages that are friendly to the big search engines. Search for "San Francisco family vacation" on Google, for example, and UpTake (or its former name Kango.com) pops up high in the results. With the price comparison business model looking a little long in the tooth, online travel is a good place for creative entrepreneurs to build new businesses. So far, it's worked for UpTake--the company is expecting 2008 sales of between $500,000 and $1 million.
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