Group Deal Travel

Holidays with your friends made easy. Social planning process, trip sharing, cheaper group rates and exclusive deals

Opportunity Execution Project Assignment for:Technology Entrepreneurship Course, fall 2012Professor Chuck Eesley, Stanford University

Agenda

● The Problem● The Team● The Product – Demo● The Business Model

■ Market■ Costs and Revenues■ Risks■ Funding

The TeamFerran (sales/distribution)

Annabelle (marketing/partnerships)

Gianfranco (product/CEO)

We joined the course just three days before the first big assignment (Identify the market opportunity). During the first meeting, when introducing ourselves to each other, we found out we all travelled a lot, and we all experienced the hassle in getting friends on a plane to go holidays together. We needed to pick up an idea and that was the deal: find a solution helping two big passions to get together: travel and friends.

The Problem

Booking travel online is an individual process, not ideal for group of people

Deals: no easy access to deal offers contextuals to traveller's needs

Price: no easy way to save money when in group

Organising a holidays with your friends can be a nightmare. Sms, emails, phone calls, pub nights, facebook groups...a lot of information and impossible to track who wants what and when. And wait... no offers for groups?

Our survey shows that 92% of respondents use emails to plan their group holidays and 67% organize face to face meetings

Are people satisfied with these planning options?

“No, it is very difficult to plan over email - we usually end up making huge spreadsheets and complicated documents to track all of our traveling logistics!”

Hotels can be booked (onsite) or added to the wishlist

A mix of Hotel rooms, apartments and Special group offers

Targeted Advertisement & Group Deals. Deals can be added to the wishlist and discussed with friends as an option(e.g. package all inclusive)

The Solution

The Solution

Platform is heavily integrated with social networks (Initially 100% facebook)

Facebook friends can be added and automatically invited through facebook APIs

Advertisement

The Solution

Friends can be polled to decide date, destination of the trip

Friends they can like or dislike other friend's proposal

A list of things to do is inserted and can be updated by any of the friends (connected to Trip Advisor DB)

The Business Model

The Market Size

Growing Market

The online tourism industry will experience some major trends in the coming years:

■ Mobile sales: By 2015, IDC is forecasting that mobile use will surpass traditional desktop use within the next few years. Expedia reports that 65% of hotel bookings within this last 24-hour window are via mobile. The smart devices shipments are expected to pass from 1000M to 1900M in 2016,

■ Social networks: PhocusWright found that social media use among travellers is growing far faster than the travel industry itself. Facebook users who are referred to travel booking sites are far more likely to book travel than those who are referred via search engines like Google("wisdom of friends”).

OUR RESEARCHGroup travelling is a segment that has been so far neglected. Group trips are a common form of travelling but require complicated logistics, for which there is a growing demand. Once thought of as a market for senior customers, new trends are emerging like girlfriend or sports-focused getaways. The social media trends are making it easier to create groups with common interests looking for custom trips rather than the usual mass-market offers.

Marketing Strategy

● Search engines ○ Google Ad Words . We initial focus on google Adwords. ○ SEO. We will invest heavily on SEO since Q1.

● Channel Partnerships○ Offer advanced integration functionalities to external websites in exchange of

revenue share, customer retention, traffic. We classified the potential channel partners according to potential benefit/ feasibility. We focus startup partners which might be interested on a partnership with GDT (Q3-Q8)

● Social recommendations○ Customer acquisition cost is reduced drastically when one user invites

his friend to the trip planner. Product quality->Happy travellers->lower customer acq. costs.

● Mobile○ Taking advantage of the growth of mobile travel bookings○ Taking the lead on travel applications for Windows phone

USER ACQUISITION COST.- Initial cost based on Google Adwords ($x10)USER ACQUISITION COST REDUCTION- friends invited to trips by one acquired customer (one happy user => 3+ friends) - Adwords optimisation(Q2)- better SEO positioning (Q3)- channel partnerships on place (Q3)- Social widgets launch (Q5)

Group deal travel - Initial target user * Men/Women* 18-40 years old*** No children* Students or young professionals* Living in US, Western and Northern Europe*** Spending on average USD 350 per year on holiday** City breaks - sports/ski trips - Sun holidays. * Online travel bookers

*Source: GroupDealTravel online survey** Source: Facebook campaign demographics Users

Adwords campaign resultsTesting 18-30 years segment for specific activities

Group Planner or Trips Deals emphasys

CPC (cost per click) has revelled to be in the average of the publicitary compaigns in google. CPC1 (1.06), CPC2(1.03), CPC3(0.82)

We did 3 online campaigns on ad words with a budget of €5 per day:Campaigns where redirecting to Landing page. 3 hypothesis were done:

H1: Targeting special events and groups. (1K impressions, medium CTR)H2: Group Deals (3K impressions, high CTR)H3: Travel Planner(9K impressions, low CTR)

The campaigns have underlined a particular interest on trip planning by users, but the “deals“ concept has been reinforced by its occurrence as keyword and in Landing page usage and in the domain name (groupdealtravel.com) and the application name.

Facebook Campaign Results

Demographics information from 2nd Facebook campaign:

Belgium, France and Ireland represent 83% of the clickers (top regions correspond to the capitals of these countries)

Domination of the 18-24 years old category (mostly university students or young professionals)

What can we do more?

● Simplification of the booking process● Customized search options● Easier integration and Social App Support● Smart devices support● Target particular events (University trips, stag/ hen trips...)● Partnership with existing best dealers● Offer group discounts● Post booking integration

Competitors

Revenues

Commissions/Fees - Initial estimated average commissions expected is 3%FEE INCREMENT- From Q2 to Q8 our commission share is going to increase gradually until 5% (e.g. with more traffic we can negotiate better deals. We will also start selling exclusive deals with higher commissions)

-> Online travel agencies-> Tour Operator-> Online travel aggregators-> Services (car rental, insurance, etc)-> Local Activities Providers -> Deal Aggregators/Providers-> Tour Operator (groups)

Partners

Costs and Revenues

Profitability Q3-2014

Risks

● Team Risk● Not being able to negotiate partnerships deals and

exclusive deals (mitigate with travel expert advisors on the board)

● Market Risk● Big Player on Travel Market doing the same as GDT

proposition (mitigated by quicker adaptation to market)● No interest and low attraction from end users (mitigated

by creation of social widgets/tools/product quality)● Low barriers of entry (mitigated by brand building)

Funding

* Venture Capital/Angel investments For bootstrap we are looking for an investment 50K US $ (in Q1-Q2) assuming -> 1st Year Salary for founders only living expenses + savings (to be paid end of year)-> Initial product outsourced+equity -> First employees from Q2 partially paid with equity

* Second round For running the business in Q3-Q4 we need further 300K (sales wages, mobile development, heavy marketing campaigns)

Thank You