9 Failed Travel Startups & the Reasons Behind
There are a lot of things to consider when building a new startup - where to get funding, how to validate your idea, and what features should the product have.
One of the challenges is finding a market that is willing to pay for your solution without even knowing what it is yet.
However, 90% of startups will fail and shut down.
In this article, you can find 9 failed Travel startups as well as analyses on why they closed down.
9 Failed Travel Startups
1) Desti
Desti was a traveling and mapping iPad app that used AI to help planning a trip. Although users found it useful, they ended up booking on other platforms.
Details of the startup:
- Founders: Imri Goldberg, Mosi Shuchman, Nadav Gur
- Country: United States
- Started in: 2011
- Closed in: 2014
- Nº of employees: 1-10
- Funding Amount: $1M-$10M
- Specific cause of failure: Bad Business Model
You can read more about their failure here.
2) Dopplr
Dopplr was a social travel network service. In 2009, Nokia acquired it for $20 million and the number of Dopplr users fell since then until shutting down.
Details of the startup:
- Founders: Dan Gillmor, Lisa Sounio, Marko Ahtisaari, Matt Jones, Taneli Tikka
- Country: United States
- Started in: 2007
- Closed in: Active
- Nº of employees: 1-10
- Specific cause of failure: Acquisition Flu
You can read more about their failure here.
3) HotelsAroundYou
HotelsAroundYou was an India service centered on last-minute and short stay bookings. They weren't capable of raising more money and had to shut down.
Details of the startup:
- Founders: Animesh Chaudhary, Harsha Nallur, Mohsin Dingankar
- Country: India
- Started in: 2013
- Closed in: 2017
- Nº of employees: 1-10
- Funding Amount: < $1M
- Specific cause of failure: Competition
You can read more about their failure here.
4) RoomsTonite
RoomsTonite was a last-minute hotel booking app for people traveling to India. They raised $1.5M in funding but the money didn't arrive and they shut down.
Details of the startup:
- Founders: Suresh John
- Country: India
- Started in: 2014
- Closed in: 2017
- Nº of employees: 100-250
- Funding Amount: $1M-$10M
- Specific cause of failure: Lack of Funds
You can read more about their failure here.
5) Stayzilla
Stayzilla, once a thriving homestay network with $33.5M in funding, closed due to unsustainable operational costs and consistent financial losses.
Details of the startup:
- Founders: Rupal Yogendra, Sachit Singhi, Sachit Singhi, Yogendra Vasupal
- Country: India
- Started in: 2005
- Closed in: 2017
- Nº of employees: 250-500
- Funding Amount: $10M-$50M
- Specific cause of failure: Lack of Focus
You can read more about their failure here.
6) Utrip
Utrip was a travel planning startup that used AI to create personalized itineraries. Keeping the recommendation engine alive was too much for them.
Details of the startup:
- Founders: Gilad Berenstein, Yair Berenstein
- Country: United States
- Started in: 2012
- Closed in: 2019
- Nº of employees: 10-50
- Funding Amount: $1M-$10M
- Specific cause of failure: Mismanagement of Funds
You can read more about their failure here.
7) WOW Air
WOW Air was the Icelandic answer to RyanAir for low-cost air travel in Europe. The cause of failure was that they wanted to become too big too fast.
Details of the startup:
- Founders: Skuli Mogensen
- Country: Iceland
- Started in: 2011
- Closed in: 2019
- Nº of employees: 50-100
- Specific cause of failure: Multiple Reasons
You can read more about their failure here.
8) Onepagetrip
Onepagetrip was a travel itinerary sharing community. Not having a plan to make money from the beginning was a stupid rookie mistake.
Details of the startup:
- Founder: Ana Santos
- Country: Australia
- Started in: 2014
- Closed in: 2015
- Specific cause of failure: Bad Business Model
You can read more about their failure here.
9) Vacation Bird
Gene founded VacationBird, a marketplace for finding your vacation rental. It was an early version of Airbnb and a VRBO competitor. Having a misalignment of incentives between co-founders and poor planning were the main causes to shut it down in 2012.
Details of the startup:
- Founder: Gene Maryushenko
- Country: United States
- Started in: 2011
- Closed in: 2012
- Specific cause of failure: Lack of Experience
You can read more about their failure here.
