Summer’s in full swing, which means it’s time to hit the road. And you won’t be lonely: Elizabeth Becker, author of “Overbooked: The Exploding Business of Travel and Tourism,” reports that the number of worldwide tourists hit 1 billion last year.
“The travel and tourism industry,” she said, “is poised to become the biggest business sector in the world.”
Silicon Valley, naturally, is taking notice. And in the same way technology has disrupted standbys such as guidebooks and travel agents, a new breed of startups is cropping up to offer alternatives built around social media and search.
“It’s still too hard for consumers to find a place to stay,” said Drew Patterson, CEO of Mountain View, Calif.-based Room 77. He cites the typical horror story of a traveler who books a room on discount site Priceline “and gets stuck between the elevator and ice machine.”
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Room 77 debuted two years ago to offer travelers more details about rooms before booking, including the floor plans and views. The site has since evolved into a search engine that folds in content from a number of older travel sites — like TripAdvisor reviews and rates from such vendors as Hotels.com and, yes, Priceline.
“I only have to go to one site,” said Phillip Deland of Pleasanton, Calif., a business manager at a chemical analysis company who has used Room 77 for business trips in the United States and abroad.
The site gets a cut when users book rooms via one of those older online retailers like Hotels.com. But Patterson said those “retail” travel sites are losing their edge with consumers, due in large part to the convenience factor Deland cites.
“You’re seeing this very broad shift in the market from retailers to search, because a search engine gives consumers a better answer,” Patterson said. “We’ve got an engineering team full of ex-Googlers.”
Travel search engines, he added, racked up 500 million searches last year. That goes a long way toward explaining why Priceline in November bought search site Kayak (where Patterson was an early executive) for $1.8 billion and why Expedia in January led a $30 million funding round for Room 77.
Another popular new search site is San Francisco’s Hipmunk, which focuses on flights, but also has added hotel bookings. Co-founder Adam Goldstein cooked up the idea while a member of Massachusetts Institute Technology’s debate team; arranging group travel to competitions in Turkey and Botswana, he said, “was agony. All the sites offered nearly identical prices. It didn’t make any sense.”
His solution: Rating search results using an “agony index” that shows a flight’s duration and number of stops, along with the price. The site also presents options like the cost and time needed for a plane trip versus traveling the same route via train.
“It’s a great user experience,” said Matthew Dorr, a tech investment banker in San Francisco who first read about the site in a tech blog last year. He likes the fact that when Hipmunk compares prices across various booking sites, they all appear in the same window rather than in separate pop-ups, as on Kayak.
Goldstein added that while his company’s business model mirrors Connecticut-based Kayak’s, taking a slice of each fare booked, Hipmunk also integrates your online calendar — to show, for instance, a hotel near the meetings you’ve got scheduled.
The former Apple intern freely admits he and his co-founder, Steve Huffman, knew nothing about the travel business when they started Hipmunk. But because Huffman had previously founded news-sharing site Reddit (and sold it for millions to Condé Nast), he gained access to venture backers such as Ignition Partners, which had invested in Expedia.
While Goldstein declined to specify how many people use the site, he said they perform millions of searches a month. About a third of those searches come from mobile devices, which he said reflects the “younger, technologically hip” demographic that he believes the traditional travel industry underserves.
In another effort to woo those tech hipsters, Hipmunk displays lodging options from Airbnb (a fellow alumnus of startup incubator Y Combinator) alongside those of the older hotel booking sites.
Also backed by Y Combinator is a newer entrant in the travel search space, Getgoing.com
, which offers personalized flight searches — or, if you’re not quite sure where to go, will suggest options based on queries as general as the word “beaches.”
In fact, the notion of helping travelers decide where to go and what to do is behind a growing number of next-generation travel sites and apps. One of the current heavyweights in the space is San Francisco’s Gogobot launched in 2010 by veterans of MySpace and Yahoo. The site’s 2.5 million registered users can troll their Facebook and Twitter networks for recommendations on lodging, dining and destinations.
“You can kind of see where everybody else is going,” said Karen Le, a civil engineer in San Jose, Calif., who calls the site better organized and more trustworthy than other recommendation engines like TripAdvisor and Yelp.
Becker, the author, said first-generation online travel tools like Travelocity and Hotwire have helped revolutionize the industry and driven down costs. “Now that people believe they are their own best travel agents and can book everything online,” she said, “the number of new apps will only increase.”