2 Years of Travel Startups: Which Companies Survived and Died

Each week for the past four years Skift has been chronicling the latest travel startups to enter the market.

When we began our weekly Skiftseedlings stories on startups in December 2012 the backdrop to the travel startup landscape was different than today. In 2012, most of the world’s major economies were growing and recovering from the global recession of 2007 to 2009. In particular, the rise of mobile led to a flurry of entrepreneurs launching companies that wanted to help travelers plan their trips through mobile apps.

Four years later, while Airbnb and Uber are grabbing headlines, funding in certain sectors such as hospitality tech has been uneven. Most of the scores of trip-planning startups launched during the past few years have died, according to our analysis of travel startups, because they either ran out of funding or shut down due to lack of user engagement. Skift also found that trip-planning was one of the least funded travel startup categories in 2015.

Trip-planning startups had the daunting task of facing off against incumbents including TripAdvisor, Google, and Yelp, which claim hundreds of millions of users around the world. Based on our analysis about four out of five trip-planning or travel inspiration startups launched during the past four years have failed.

Startups initially covered in Skiftseedlings ranged from just-launched to about a year old. Skiftseedlings is not necessarily a forecast for which platforms travelers will adopt or what software hotels will buy, for example. Rather, its purpose is to highlight how entrepreneurs and venture capitalists are responding to challenges and conflicts facing the global travel industry such as hotels’ direct bookings push and how travel agents are innovating to remain relevant. Skift has covered hundreds of startups during the past four years and more than 150 are part of this analysis.

Nearly 60 percent of the 150 startups that are part of this analysis have failed and are no longer in business. We considered a startup inactive, or dead, if its website no longer exists, its social media presence went silent, and/or its product seemed like it was broken beyond repair.

We’ve seen startup trends come and go. Booking last-minute hotel rooms, as embodied in HotelTonight, seemed to be the buzz of the travel industry a couple of years ago but lately everyone’s attention turned even more intently towards Airbnb and the sharing economy, as well as messaging apps and bots.

Founders Reflect on State of Travel Startup Landscape

Skift has talked to many entrepreneurs in the travel industry during the past four years who founded companies that reflect shifts in consumer behavior. Many founders and CEOs define success differently at various stages. We talked to the CEOs of three startups, AllTheRooms, Rocketrip, and Stayful, which have managed to stick around and keep fighting the fight.

Each of these startups, like many others that have enjoyed longevity and recognition, entered a space that was ripe for disruption. Rocketrip, for example, rewards business travelers for beating their travel budgets and was founded at a time when Google was running a similar program for its own employees. AllTheRooms saw the convergence of established hospitality companies with maturing alternative accommodation sites. Stayful recognized hoteliers needed data to personalize the guest experience and stay connected while offering travelers discounted rates for boutique hotels.

Following are thoughts from each of the three CEOs who reflected on what they’ve learned during the past few years and the challenges and accomplishments they’ve had along the way.

Joseph DiTomaso, co-founder and CEO of AllTheRooms, founded in 2013: “About eight months ago we reached about 7.4 million accommodations that are bookable on our site. That’s about half of total global accommodations market.

“Our vision from day one was to go after every room on the planet and we’re one of the only sites with all traditional hotels but also non-traditional as well. We began to see that AllTheRooms was needed in the market when the Priceline Group acquired Kayak in 2013 and then when Expedia bought Orbitz. And of course the gradual surge of the alternative accommodations market. We believe these markets will converge and we’re already seeing that happen, with the irony that Expedia ended up buying HomeAway for $3.9 billion last year.

“One of our challenges is that you’re everything to everyone and nothing to no one. According to our analysis there are over 450 different types of accommodations sites out there. Search parameters for us are very different compared to, say, vacation rental sites. There’s a different booking experience depending on the type of accommodation. I think Booking.com has probably done the best job at trying to integrate their vacation rental assets.”

Dan Ruch, founder and CEO of Rocketrip, founded in 2013: “We saw the opportunity in the consumer space but nothing like what we’re doing existed in the corporate travel space. The corporate travel industry wasn’t being kept up on its toes.

“There’s just a huge opportunity to innovate and treat employees like consumers. We’re entering a phase of corporate culture where an employer will not tolerate a platform built for them that does not serve their needs.”

Cheryl Rosner, co-founder and CEO of Stayful, founded in 2013: “We didn’t foresee on-demand services becoming big as fast as they did, which is really strange to say in hindsight but that’s the reality of it. We knew in the beginning that instant within the stay was very important, but we didn’t necessarily see the on-demand in the beginning.

“We didn’t initially have a concierge service but we now have one in the new iteration in our app. Our engagement with the concierge service is 42 percent of app users.

“Hotels today are being provided a lot more information. One of the top concerns of boutique hotels and independents is the cost of payroll and a concierge service like Stayful’s provides them with some information to start to think about workflow.

“But use cases are simple to identify and really super hard to execute. Take dinner reservations, for example. We know what we know we’re good at, and what we’re not good at [so] we bring in partners to our network. We view ourselves as a market network. At the center is the user and hotel stay and there are a whole bunch of things that go around that.”

Travel Startup Failures and Survivors

We reviewed startups that were in our Skiftseedlings stories from December 2012 to December 2014 to check their pulses, discover which ones are still alive two to three years after launching, and decipher trends in the travel startup ecosystem.

Trip-planning isn’t the only travel startup category that has been hard hit. Several startup airport apps, booking sites, and hotel software platforms bit the dust as there was a glut of those types of companies chasing the same travelers, brands, and funding.

The surviving startups are perhaps even more telling. Companies like Silvercar for car rentals, LoungeBuddy for airport lounge access and Rocketrip for business travel rewards reached for market opportunities. Others such as JetSmarter for private jet bookings, Xola for tours and activities booking software and Wanderu for bus and train bookings represent niches that were always in demand but never adequately addressed.

These surviving startups shouldn’t be considered success stories, though, since simply surviving for a few years doesn’t necessarily hold promise. The spectrum of survival is broad, with some of these companies actually gaining traction with consumers and major brands while others are surviving off venture capital or barely treading water.

Below are the 150 travel startups Skift covered between 2012 and 2014 that have either died or survived. Five of the 150 startups have been acquired. This list, along with all the startups we’ve covered, isn’t totally comprehensive. These startups do, however, reflect some of the larger trends, for better or worse.

Note that the date Skift wrote about these startups, indicated below, is generally a few months after each company’s official launch date.

150 Startups Covered in Skiftseedlings From December 2012 to December 2014

Source: Skift

*Maps.me was acquired by Mail.ru Group in 2014.
**Trampolinn was acquired by GuestToGuest in 2016.
***Yoogoin was acquired by indiescapes on Dec. 6, 2013.
^ Humanity.TV was acquired by business IT provider Coupa Software on July 20, 2015.
^^CorkSharing was acquired by Mail.ru Group on Nov. 13, 2014

— Sarah Enelow contributed to this story.