Finns traveling

For all the innovation in travel in the Internet era, little attention has been paid to the chaotic task of traveling with large groups. Weddings, clubs, corporate retreats – it’s a far more common occurrence than one might realize at first blush, but in almost all cases making arrangements for more than a handful of people still requires a phone call.

Jetaport is a New York startup aimed at changing this reality. The two-year old company started out with a vision of adding social and collaboration features to large group travel, believing that groups of friends and family would benefit from sharing in the research and planning phase of these trips. But in early testing, one single feature within this product outperformed all others so resoundingly that the company decided to narrow its focus. That feature: booking hotel room blocks.

“The global distribution system doesn’t allow you to see inventory or pricing on reservations of nine or more rooms. Prior to Jetaport, if you wanted to book a large room block, you had to call the hotel group sales manager,” founder and CEO Jason Shames says. “Then you‘d have to wait for them to get back to you just to get a quote. And most consumers had no idea what to ask for, so they were missing out on perks like free shuttle service or free WiFi. We automate all of that.”

That “automation” bit is a bit of a stretch. It’s more accurate to say that Jetaport relieves consumers of having to do the work themselves – making it a tech-enabled group travel agency, rather than a self serve bookings marketplace. Business has been good, with the company generating more than $1 million in Q1 bookings and just shy of $2 million in Q2 and already profitable as it approaches the one year anniversary of this more focused approach.

The company has built direct relationships with many of the largest hotels, particularly in the most popular destinations, but it still has to wait to hear back about availability and pricing. The difference is that hotels are far more likely to respond to Jetaport in a timely manner than to the average consumer, and the company knows how to obtain the best available deal once it makes a connection. In cases where the company has never booked through a particular hotel, it first needs to educate that property on its service.

“Group booking is often the deepest possible discount available at a particular hotel, next only to wholesale pricing,” he says. “That’s why we don’t just pre-negotiate a flat percentage discount. We believe we can deliver better experience than traditional online travel agents.”

For consumers, the experience of booking through Jetaport consists of choosing four hotels within a given destination (e.g. Maui). The company then gathers availability, rate, and amenity details from each and delivers this information to the consumer, often within minutes and typically in the form of a non-binding “courtesy block” contract, which carries no financial obligation.

“We assign each client a personal travel advisor – these are typically people a few years out of college with strong people skills – it has to feel white glove,” Shames says.

Hotels like the service because it leads to higher conversion rates – upwards of 10 percent, versus the industry average 2 percent – according to Shames.  “Since they start out by selecting four options – as opposed to canvassing an entire market for quotes – they’re more likely to end up booking and hotels can avoid servicing so many empty requests.”

Shames promises to introduce an instant-booking product in a few weeks, without explaining how the company will overcome the group-booking limitations of the existing global reservation system. If such as system is in fact feasible, it would make the company even more unique in an already sparse group booking category.

Jetaport has found early traction in the bridal market, developing affiliate partnerships with existing online marketplaces and retailers like Loverly to capitalize on existing high-intent traffic on those sites. The next step is to expand this program to the wedding planner and blogger communities, Shames explains. The company is also looking to build similar inroads into the sports and college (think fraternity, sorority, and club) markets where it sees a lot of group booking activity occurring currently.

Jetaport has raised $1.2 million to date in angel and Seed funding from Cap-Meridian Ventures, YFT ventures’ Amer Rehman, Dominion Capital founder Mikhail Gurvich, and the Entrepreneurs Roundtable Accelerator. Shames is currently in the process of raising a follow-on round, he tells me, a process he aims to complete by year’s end.

The young company has demonstrated that there’s an unmet demand within this niche of the larger travel market. Its next task will be to prove that it can scale this service and fend off the seemingly inevitable competition from large incumbents.

“The existing platforms have not focused on this area because they’re not able to use the existing global distribution system,” Shames says. “They would have to follow more of a Booking.com model.”

But just because they haven’t dedicated resources to large group travel historically, doesn’t mean that the Expedias of the world won’t do so going forward once Jetaport proves out the demand. Of course, by that time, the startup would find itself as an attractive acquisition target for one of the majors looking to quickly expand its offering.

“Our initial goal was to prove that there was a market here,” Shames says. “We’re finally confident that we’ve found product market fit and now it’s just time to supercharge what’s working.”

As Erin Griffith wrote a year ago, the travel category is as littered with the remnants of failed startups as perhaps any other industry vertical. With most intermediaries subsisting on meager (if any) margins, there’s little room for error. At the same time, upstarts must compete for traffic with the ad dollars of billion-dollar incumbents.

To its credit, Jetaport has done better than most to find and solve a real problem largely ignored by the legacy platforms. How long it can stay ahead of the crowd is the real question.

  1. Jetaport is the best way to book group hotel rooms.

    1. Amer Rehman
      Past Investor