Travel: hard to make a buck for startups – William Bao Bean

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William Bao Bean

Ctrip is one of China’s successful travel companies, but for most startups, it is a tough market to crack, said William Bao Bean, managing director of the Shanghai-based China Accelerator, last week at a travel conference in Amsterdam, according to Phocuswire.com. Bean did identify some potential success stories, though.

Phocuswire.com:

Ctrip says that orders on the Customized Travel unit increased 180% in 2018.

According to the research, travelers most likely to book the high-end travel tend to be women or couples aged 31 to 40 years old.

Ctrip’s data shows an average spend per person on a high-end customized travel package of $3,410 compared to $790 for a standard package.

Ctrip is targeting China’s high-net-worth individuals who totalled 1.67 million in 2018, according to the report.

Others are also seeing the potential in this segment with William Bao Bean, general partner at SOSV and managing director of Chinaaccelerator, investing in startups targeting these travelers.

Speaking at the Phocuswright Europe conference in Amsterdam last week, he said most people are “chasing a fraction of a fraction of a fraction” and that while the travel market is huge there is “virtually no money in it.”

He was talking about how difficult it is for early-stage investors to break in to the market and highlighted a company called Portier that Chinaaccelerator has invested in.

Portier provides high-end phones to guests in top tier hotels enabling the properties to offer them additional services.

Bao says that on average the company is increasing revenue room night by 20% and that it’s “high-margin revenue.”

He also touched on another investment in a company called Lux’Sens, which connects luxury good retailers to consumers, saying that 40% of global luxury spend is from China and that more than half of that spend is outside of China.

“50/60% of that [spend] happens outside China so why not try and capture that revenue.”

The Ctrip Customized Travel unit estimates high-end customized travel will grow by 200% in the next three years.

Phocuswire.com.

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