Over the last few years, the travel industry has begun to undergo significant change, as startups and incumbents have fought to bring the disparate parts of a highly regulated industry online. Much of the attention from consumer web businesses has focused on making travel more “social,” improving discovery and helping travelers figure out what to do at their destination of choice. Today, there’s a laundry list of options when it comes to finding information about travel destinations, and sites like and (now part of Priceline) have changed the way we search for and book travel.
However, while the travel space (especially the social side) begins its inevitable consolidation after a flood of activity and launches, , there’s still plenty of opportunity “closer to the top of the decision funnel” — the moments after we decide where it is we want to go. , a San Francisco-based startup that launches out of beta today, is willing to bet there’s a big opportunity at the top of the funnel in one of the least-explored (but growing) areas of social travel: Group planning.
Flights With Friends wants to make it easy for families and friends to find and book flights and hotels together, allowing everyone in your travel posse to see the same results, pin their favorites and chat about different options — in realtime. The startup is on a mission to solve the kind of problems that are familiar to anyone who has attempted to arrange travel for a group of friends, like those inevitable, lengthy back-and-forths via group text, reply-all-heavy email chains and spreadsheets.
Generally speaking, to get the travel planning process moving along, one or two people will take the initiative, who ultimately organizing the whole shebang. The planners then end up resenting their lazier travel buddies, while their buddies end up being unhappy they weren’t more involved in the decisions and, when someone ends up on the wrong flight or at the wrong hotel, friendships are tested. Not to mention the fact that collecting money from a large group of friends is a horrible thing to endure.
So, Flights with Friends lets groups traveling together find the best flights, places to stay, and activities to do while discussing the options in realtime. In turn, this realtime communication tends to motivate groups to actually get the planning done, thanks to the fact that Flights With Friends offers the same sense of urgency for travelers, regardless of whether half of the group is offline.
As to how it works: Let’s use bachelor party in Vegas as an example. The best man might navigate his way to Flights With Friends to begin the search for transportation and accommodation, inviting his friends in the process.
The user would be able to use private Facebook messages or send emails and once others start joining, they could add flights if they’re traveling from different cities, pin flights and hotels they like, set shared search filters and book, while everyone else in the party gets notified. Now, the best man doesn’t have to be the hero (or the bad guy), pestering each member of the trip about different options or spamming them with email.
Co-founder Kyle Killion tells us that he sees the service’s most attractive use case as being those like the one mentioned above, along with planning associated with weddings, family gatherings and graduations. What’s more, while these use cases may seem niche when considering the travel space as a whole, the co-founder tells us that small group travel (groups between two and nine) is a $31 billion annual market, according to estimates made by Groupize.
However, there is a flip side. Although startups (and some incumbents) are working hard to bring the whole travel decision funnel online, most group travel still happens through travel agents — much of it offline. found that nearly 80 percent of travel agents booked 10 or fewer groups in 2010. So, all in all, groups account for a relatively small portion of bookings.
What’s more, there’s still plenty of competition. TripIt options, , which is similar to Flights With Friends has been in this space for awhile, Groupize offers group hotel bookings and in New York, is gearing up to become a player in group travel. That’s just naming a few.
Nonetheless, Killion is still optimistic about the opportunity in group travel. Although it’s been around since 2004, Triporama has been fairly quiet of late, Travelocity offered co-browsing options and Jetaport has still yet to launch. The other prevailing trend in social travel, he says, is that, while startups may purport to offer group travel options, they’ve mostly focused on travel inspiration functionality, a la Gogobot. And, while Gogobot keeps growing, inspiration doesn’t really need another player.
Killion says that their research has found that most groups know where they want to go, but they just need help planning. What’s more, , while the total number of group bookings remains low for travel agents, proportionately, groups already represent over one-third of all sales — a surprisingly large portion of their total business. On top of that, nearly 50 percent of agents said that they expect group travel to show strong growth going forward.
Right now, the problem for those tackling group travel is that people use a lot of different sites when searching for travel options, so startups have to offer something better if they want to become the go-to destination for search and booking.
The co-founder says that Flights With Friends wants to link directly to airlines’ “buy” buttons from results and now combs 150 sites, along with funneling in hotel information from Expedia, which offers the largest selection of hotels. Long-term, Flights With Friends wants to combine Kayak and Facebook for group travel, offering Kayak’s metasearch, along with a collaborative, group communication component as well.
As of yet, there hasn’t been a clear winner in the group travel space — or really even a clear front-runner, so the key to success starts with offering a better user interface. Most players out there stink in this regard, and simultaneous or co-browsing is still a relatively new concept, so the challenge is to give users a co-browsing experience that’s simple and easy to use. On top of that, Flights With Friends is focusing on viral growth and marketing to its audience at the moment they need this type of service.
On the viral end, the co-founders are working on changing the way the site integrates with Facebook so that people who want their friends to know they’re planning a trip can help promote the service. Killion says they’ve erred on the side of privacy in the first version of the site and are now looking to add more sharing options.
Flights With Friends bootstrapped its way through its four-month beta run — which attracted over 10,000 users — supplementing that with some revenue earned from lead-gen for flight, hotel and activity bookings. Now that it’s emerged from beta, the co-founders say they’re going to begin raising some angel funding to beef up staff and pursue further partnerships. And, , it’s critical for companies to offer a mobile experience. Flights With Friends is working on an iPad app, which the co-founders hope to launch in February, before developing for apps for the iPhone and for Android.
It also helps that this isn’t the first time around the merry-go-round for the co-founders. Killion founded Flights With Friends after serving as VP of Product for . The serial entrepreneur got his start as the eighth employee at The Geek Squad in the late nineties (which now has nearly 25K employees and was bought by Best Buy), before founding maccontrol (which sold to Pegasus) among others, while doing stints at Coupa, Yelp and Apple. Killion is joined by Arthur Klepchukov, an early engineer at Votizen and founder of Outspokes and Slipstream.
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