Internet-based travel startup sees money in concierge services

Internet-based travel startup sees money in concierge services

October 16, 2007

By Allan Maurer

CHARLESTON, SC—Don Campagna wanted to figure out what to do with
the 1-800-Booking phone number he had reserved, and realized that
changes the Internet had brought to the travel industry offered a
niche. All the brick and mortar travel agencies that once offered
personal service have disappeared as online sites focus on cheap fares,
lodging, and car rentals.

Campagna believes there is a market for an Internet-based company
that provides personalized customer service to affluent travelers.
“These are frequent travelers and inclined by their experience to use
the services of professionals,” Campagna tells TechJournal South.

The company seeks a $500,000 seed round to test its offering in
three South Carolina upscale markets, Charleston, Myrtle Beach, and
Hilton Head. Campagna says, “We’ll test it four months and refine our
processes before we grow it out. Then we’ll need a good first round of
about $5 million to take it to second tier cities such as Raleigh,
Birmingham, and Nashville. When we’re ready for the top tier, New York,
Chicago, etc., we’ll look for another $5 million.”

The travel market as a whole attracts him because of its sheer
size. “I looked at my numbers and was blown away by the size of the
market and the opportunity when I did my business plan on the travel
industry,” he says. Campagna attended the Fast Trac program offered by
Charleston’s ThinkTec, a Chamber of Commerce incubator twice. “I wanted
to make sure my numbers were correct,” he says.

The travel industry is a $1.3 trillion a year business. It brings
in $16 billion a year in South Carolina alone. While he notes that the
current online travel industry is well-funded by conglomerates and the
airlines, they tend to appeal only to people seeking the lowest prices.
“That’s a good business model, but it’s built on cheap fares,” says
Campagna.

The affluent travel more

“I looked at that and asked, how could I make the most of this
economic opportunity but not compete with them,” he says. I looked at
the affluent head-of-household survey. It breaks out 26.5 million
households with an annual income of $85,000 plus. They travel often,
eight flights a year, spending $210 million on domestic travel. They
rent cars four times a year, spending $105 million.

“And 85 percent spend18 nights a year in a hotel room.” Those
figures, he says, “Helped me decide on a business model that reverses
the formula. Instead of coming back with the cheapest, come back with
the best. Provide concierge services to the more affluent traveler.”

Campagna says his firm, 1-800-Booking, will not only be able to
provide the normal air, car, and hotel services, it will also do things
such as arrange golf tee-times at its customers’ preferred courses. “If
you want to play three golf courses while you’re there, we pick three
that suit your abilities. We can have tickets waiting for you at events
and arrange for child care.”

Several income streams planned

Every client would be assigned a personal consultant who would call
up the customer’s information about preferences on each trip. “There
will be a $125 membership fee, and for that you have access to a
personal concierge who knows your likes and dislikes. So, when you
call, he knows you like only full sized cars and want a golf package.
You don’t have to go through it every time.”

The membership fee is to keep people from “Shopping us then going online to make their own reservations,” Campagna says.

The company would also make money from bookings. “You make
arrangements with a particular property that quotes an online rate of
$200 a night. They let us have it for $100 and we sell it for $150.”
The actual amounts vary.

Campagna has brought aboard Tom Dilhem, who has 40 years experience
as a CFO of various organizations. “He’ll be our CFO when we’re
funded,” Campagna says.

His sister Dorothy Campagna has 30 years experience in the travel
industry, with a New York City boutique to running travel for Bear
Sterns. “She’ll be our chief travel officer,” says her brother.

Campagna says that he hopes to grow the business into a 500-seat
call center in Charleston, which he notes already has a robust call
center sector.

He says he would like to be in business by January so the company
doesn’t miss the start of the travel selling season. “We think it will
take us until spring to make sure everything is in place and operable,
then go into growth phase for about a year. Then, in 18 months after
that, we want to be coast to coast.”

The company’s Web site is currently just a place holder at www.1800booking.com.

Leave a Reply