Trip Planning Startups: The Holy Grail we never seem to reach

The ultimate Trip Planning platform, the Perfect Trip, the One Source of Truth, the Totally Integrated Planning to Booking Process, and all of its other permutations have been one of the Holy Grails of the travel startup landscape for decades. Just watch this Expedia 1998 Video that I use in all my Trip Planning talks. The ambition is not new, nor is the belief that this new technology era brings all the missing pieces. As we all saw when GPT launched to the public 18 months ago, the first example on everyone's mind was using GPT for Trip Planning. Which is of course not the slam dunk they thought it was but that's for a different post.

In 2011, after a great trip to Europe and over a decade of learning about AI from my dad, I quit my job as a consultant (I did not last long) and started Utrip; the world's first AI trip planning platform. It is still true that more travelers used Utrip and Utrip recommendations than any other trip planning product ever built but even with our successes, and the successes of so many other founders and teams, today's traveling public still lacks a great trip planner, a single source of truth, the one stop shop.

My friend Michael Coletta and I recently hosted a Webinar aimed at sharing some of our learnings in the hope of enabling a new generation of entrepreneurs to benefit from our successes, mistakes, and learnings. Watch Here.

Below are a few of the learnings I shared with the audience. Lessons learned over 8 years and hundreds of millions of users at Utrip along with lessons I've learned from working with dozens of relevant startups where I served as a Director, Advisor, Investor, Mentor, or Friend.

Why Trip Planners Make Challenging Products to get Right

Purpose Built Tools are not used at Scale – For some reason, outside of booking, very few travelers use purpose-built solutions for trip planning, discovery, or management. Google Maps, Google Sheets, Google Calendar, and Docs are still the top trip-planning tools out there; while Social Media is the leader in discovery. Even though logic seems to imply that people who prioritize travel would desire purpose-built tools, the data does not support that. (Maybe because most travelers are so used to utilizing Google Calendar into Google Maps for normal daily plans that it's just too easy to use those generic tools for trip planning and management).

Focus Groups are Useless! – This may be true in other industries too but in Trip Planning Land focus groups are nearly worthless. When asked how people want to plan travel they tell of elaborate well thought out efforts that take many factors into account and really consider the possibilities. When in reality, travel is planned in the in-between times; in the break between work calls, on the bus, while waiting for dinner to heat up, and even on the toilet.

Focus groups and deep thinking have unfortunately led far too many of our fellow founders astray. These focus group participants mean well, they simply don't act in the way they think they will because in reality life is just too busy.

Trip planning is Non-Linear and thus not conducive to a single workflow – Actual trip planning is non-linear, both in the way we plan and in the moments when we plan. Thus, it's hard to create a product that can be in all those places at all those times and do all those things effectively.

Travelers want Multiple Sources – Sophisticated travelers, the ones who would consider using a trip planner in the first place, crave multiple sources to verify and triangulate the best options for them. Even a trip planner like Utrip that prioritized multi-sources and diverse perspectives at every turn felt to consumers like a single source and so do all the other trip planners. Thus, it may be that travelers really don't want the one-stop-shop that founders imagine.

Less is more even though it is counter intuative – trip planners are by definition productivity tools and research/discovery engines. Thus founders and product managers who build these products are typically productivity and planning junkies themselves and nearly always believe they are one great feature away from crossing the chasm. This can lead to a mismatch between the ideas of product creators and the real behavior of travelers.

Trip Planners lack enough data to be truly hyper-personalized - a great trip is about a lot more than a good selection of activities and restaurants. Thus, even if a trip planner or AI recommender does understand the traveler deeply enough to make great personalized recommendations it still falls short. A great trip is about knowing what seat you like on a plane and if there is a long layover what airports you prefer. It's about knowing how to balance your price sensitivity with your preferred airline mileage program. It's about knowing which type of ground transfer you want and how to balance that with rush hour concerns. All of that and we still have not made it to the hotel.

And the reality is, if the trip planner is only sort of smart or sort of personalized it probably does not create much more value for consumers than a good travel article from a travel writer you like.

Other Product Challenges include the infrequency of use, the data fragmentation challenges, the nearly infinite permutations of a trip, and what I call 'The Balance of Art and Science' of trip planning.

*Gen AI - on the webinar there was a great deal of pushback against some of these product concerns from Gen AI superfans. The basic point was that regardless of the challenge or concern discussed GenAI is simply so powerful and improving so quickly that within months any legitimate concerns will be addressed. My response, as a 20 year AI optimist, is maybe. Its totally plausible that this is true but this is also what past generations of founders claimed.

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Why Trip Planners Make Challenging Businesses

Trip discovery and planning may be too far from the transaction – Conventional wisdom, which is probably correct in this case, has long been that since trip planning is non-linear and multi-funneled, the chasm of time between the initial phases of the trip planning process and the primary booking is too great. Thus the company providing the trip planning tools does not directly benefit from the transactions upside. Said simply, people discover, plan, and share on trip planners but book on the hotels' site or an OTA.

The Cost of Customer Acquisition may be too high for planning revenues to sustain – Another reason trip-planning businesses are difficult to get off the ground may be the fact that in our enormous and highly competitive industry, traveler acquisition costs are so high that they can only be paid for with commissions on travel inventory sales.

The concept of Traveler Lifetime Value in consumer Travel may be a false hope - For the record, I am not 100% convinced of this, but multiple CFOs of the largest OTAs in the world have told me that the whole concept of Traveler Lifetime Value in the consumer trip planning and booking world is false. The reality is that at most OTA's travelers have to be reacquired for every transaction, sometimes multiple times for a given trip, and thus there is no true lifetime value associated with a single acquisition effort.

It's hard to build a business on a cut of a cut of a cut - In reality, there is only one sustainable business model for leisure trip planners hoping to scale and that is the sale of travel inventory; there are no big profitable B2C travel companies that do anything but sell inventory. As a trip planner, one typically has to monetize by selling inventory through an Affiliate Program; earning a cut of a cut and sometimes they even have to cut up that commission again to split with a creator, brand, or agent.

Conclusion

Believe me when I say I could go on and on. Many other learnings were left on the cutting room floor. But to finish optimistically, I still believe it may be possible. The problem is real, the tech is exciting, and consumers are turning to experiential travel more than ever. So keep me posted on your journeys!

Do you have anything to add?

Any lessons from your trip planning startup efforts?