Increased User Interaction on Travel Startup Applications

The share of global bookings made through travel category programs has increased from 12% in 2014 to 54% in 2016. In fact, the online market share in the travel industry has overgrown. It has disrupted the order of the offline market.

The growth of users’ interaction with travel category programs from 2014 to 2016 in 4 countries is as follows:

  • Canada: + 270%
  • EU: + 150%
  • US: + 120%
  • Japan: + 50%

Growth of Sessions in Travel Startup Applications

As an indicator of the change and orientation of user habits towards mobile applications in receiving services, the session recorded a fifty percent growth in 2018 compared to 2016 in travel category programs.

The growth of time elapsed and the number of sessions is significant regarding that some of the critical services provided in this category are not the ones that users receive on a daily basis. Some of these services include airline ticket reservations, hotel reservations, and other travel services.

Electric Bike and Scooter Startups; The Next Disruptors of Transportation Industry

Mobile applications in the travel category provide the user with a set of solutions for moving between two points. These solutions include a wide range from bicycles, scooters, online taxis to buses, trains and planes, depending on the user’s preference and factors such as distance, cost, and convenience.

Among intercity transportation options, online taxis have seen a dramatic increase in the number of users in previous years and are now growing significantly but declining. At the same time, bicycle and scooter startups have snatched the lead from online taxis and are growing exponentially.

In 2018, the number of users for the top 5 online taxi programs in the United States grew 25%.  However, this growth for the top 5 travel apps for bicycle and the electric scooter was 530%.

The field has been attractive not only to users but also to global online taxi market leaders such as Uber and Lyft, as well as car companies such as Ford. A few years ago, Lyft acquired a bike-sharing company called Motivate, and Uber acquired an electric bicycle company called Jump.

In the electric scooter subscription market, the most important players of which are Bird and Lime startups, Uber, although it did not succeed in acquiring Bird, is a minor shareholder of Lime startup. Meanwhile, Ford has acquired a scooter starter called Spin.

Travel startup

The Average Income per User in the Travel Category

According to global analysis, one out of 10 travel category users makes a purchase over a 6-month period. The average revenue per purchase is $ 29.42. However, this average is $ 70.27 in the gaming category and $ 13.88 in the shopping category.

Travel Category Users’ Purchase Rates

In this category, the purchase rate of users is 13% in iPhone mobile phones and 8.5% in Android mobile phones. In the first group, the average income per user is 60% higher than in the second group.

Organic Vs. Non-Organic Users in the Travel Category

Another noteworthy point is the 2.5 times the probability of booking by organic users compared to non-organic users in quarterly intervals.

The significant difference in the probability of booking, as well as the value created by organic users, highlights the importance of increasing the number of campaigns designed based on the results of data analysis and with the aim of increasing the number of apps installed by organic users.

The Reaction of Traditional Industry Actors in This Category

Significant growth of users of online travel agency programs (such as Expedia, Travelocity, Priceline, JustFly) as well as online search programs related to air travel, hotels, rental cars, etc. (such as Hipmunk) made direct service providers such as traditional airlines react and add additional facilities to their agencies.

Traditional or offline airlines’ effort to improve the travel experience has led to stronger relationships with loyal customers. One of the results is a 10% increase in the time spent in these agencies apps by android mobile phone users in 2017. In contrast, this index for online travel agency apps has been almost unchanged.

On the other hand, many international airlines have invested heavily in mobile applications; Programs that are the most efficient channel for retaining airline customers and rebuilding direct customer relationships. However, this relationship has been eroded by online aggregators in recent years.

Organic users
Organic users

Airline brands take this approach to build the best travel experience for the customer in all travel stages. Some of these stage includes booking tickets, receiving instant travel news, in-trip entertainment, post-travel promotions, and more. Significantly, the average number of monthly active users in the itineraries of the top 5 airlines in the world increased by 55% in 2018 compared to 2016.

The efforts of airlines and offline agencies are commendable. However, the question remains whether it is enough to bridge the growing gap between these traditional actors and travel startups.

Venture Capitalists Investment in Travel Startups

Along with the significant growth of users ‘interest in the travel category in recent years, investors’ interest has also grown significantly. The volume of global venture capital investment in active startups in this category experienced a growth of 63% in 2017 compared to 2016 and was equivalent to 31 billion dollars.

Particularly in the United States, between 2012 and 2015, the growth in the number of venture capital transactions in the travel category was 200%. On the other hand, the amount of capital injected into these startups grew by 240%. In 2016, the number of transactions and the volume of investment in this category were 152 transactions and 1652 million dollars, respectively.

The Global Approach to Online Taxi Mobile Apps in the Travel Category

Global online taxi plans are expanding their revenue opportunities. To do that they enter areas such as food delivery, package delivery, financial services, and more. For example, Uber has entered the food and freight market. On the other hand, Grab and Go-Jek, Uber’s counterparts in Southeast Asia, have both joined the payment services market.

Another noteworthy thing about online taxi programs such as Grab in Singapore and Go-Jek in Indonesia is that they follow WeChat as the most successful comprehensive program. They also have entered markets such as food delivery, entertainment, online payment, financial services and health.

The online taxi apps desire to simulate WeChat because they want to turn into a comprehensive program. In other words, they can have a large number of users. They may provide them with a primary and repetitive service such as travel (online taxi), food delivery services, etc.

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