The number of worldwide tourists hit one billion last year, according to Elizabeth Becker, author Overbooked: The Exploding Business of Travel and Tourism.
“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.”
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.”
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