Summary: Travel is a sexy category and many startups have tried to turn a passion for exotic locales into an enormous business, but most have struggled. The travel industry is massive, with $7.6 trillion dollars of economic impact, but the opportunities to meaningfully take money from that pie is small. TripAdvisor co-founder/CEO Stephen Kaufer’s brilliant original insight was to stay close to the money. In this case, the money amounts to the fees that hotels bake into their pricing structure. Travel agents used to benefit from these fees. OTAs made their fair share in the transition to digital, but TripAdvisor locked onto that piece of the revenue pie. Kaufer realized that hotels are a honeypot, while ancillary services like flights, restaurants and activities are businesses fraught with low margins, huge amounts of competition, and low loyalty. TripAdvisor didn’t ignore these areas. Even with low revenue potential they represent a big piece of the customer experience, but they were looked at critically in relation to the core business. One of the reasons TripAdvisor has thrived while competitors like Yelp have struggled recently is that it has prioritized the parts of the market that had the highest payoff. Photo Credit: http://bit.ly/1VmPFrU
