Startups in the travel industry tend to pivot their innovations for the enterprise crowd, but the blossoming B2B travel and expense management arena is getting packed. That makes for a highly competitive space.
That’s according to a new report from Skift, which profiled the B2B travel services space on Monday (Oct. 5) as part of its Skift Startups Stories series.
Startup founders are flocking to the B2B side of the industry on the assumption that there are fewer players, less competition and more room to grow. But according to Skift, that simply isn’t true, and the success stories in the market tend to be the exceptions.
[bctt tweet=”Startup founders are flocking to the B2B side of the industry on the assumption that there is less competition.”]
“In light of the torrent of consumer startup failures in travel, many newbie companies pivot to a business-to-business focus out of desperation and with the thought that this can’t be as difficult as the consumer side,” Skift wrote. “Well, it isn’t that easy.”
Angel investor Erik Blachford weighed in on the matter, highlighting marketing to businesses as a key issue for many B2B travel startups.
“Not to be a pessimist, but I think a bunch of these B2B ideas are going to run into a similar issue,” Blachford told Skift. “It will just be a sales roadblock rather than marketing.” Sales cycles for hotels and businesses are long, and the competition for their patronage of travel services is fierce.
Skift pointed to a slew of startups in the industry that have recently turned their attention to the B2B segment, including Yapta, Traxo, Getaroom, TripLingo and others.
Yapta CEO James Filsinger said that corporations’ long payment cycles were a massive hurdle for the startup in the beginning, noting that it took up to six months to establish business relationships and build up a strong sales staff. Traxo Founder and CEO Andres Fabris, on the other hand, highlighted the complexity of a B2B business model versus a B2B2C model as a common challenge to these players.
To check out what else is HOT in B2B, click here.