Fascinating article by an Angel Investor who got burned investing in HouseTrip, but is prepared to share his bad experience for the benefit of others. A great lesson to any travel business which is overly reliant on paid search for it's lead generation.
Having no product differentiation and an addiction to Google Adwords isn’t a growth strategy, it’s suicide! The apartments market in Europe is a large, fragmented business estimated to be worth annually in the tens of billions. There are numerous avenues HT could have chosen to pursue, including: high-end, business, family, gay, groups etc. OneFineStay chose high-end and are now $170 million better off as a result. HT fell into the addictive trap of relying on Google AdWords to grow their business almost at any cost. Online marketing spend ate up all of their revenues but more worryingly ROI was being forgotten in the chase for top line growth. Alas, a continued poor generic strategy and a misguided foray into TV advertising driven by overpaid advertising execs sounded HT’s death knell and a desperate search for a buyer followed.