Wednesday, September 5, 2007

Wrong build/buy/partner decision

The Sun-Sentinel reports of Palm Beach County tourism officials canceling their project to build an online travel agency. At least they stopped the project now.... But why did any of these people think that they could build a profitable online travel business around a single destination. All the major OTAs are investing millions into new platforms, and these guys thought they could do it on the cheap.

Besides building their travel site, I'm curious to know how they planned to run this business. These things just don't run themselves. In addition to keeping the technology alive, operations/fulfillment running (online and offline tasks), and the site functionality relevant, you need resources to acquire supply and market products to customers. Selling properties in one destination would never overcome the high initial investment and continued operating costs.

The only way that I can see this build decision working is if they were planning on reselling this platform as an affiliate solution to other municipalities, but I don't see any sign of this goal. They should have just partnered with an OTA (like Expedia, Orbitz, or Travelocity) and immediately started taking bookings. Some of these advanced platforms support unique functionality "out-of-the-box" that I believe would be close to their needs.

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