This week, WiT chats to Galena Stavreva, CEO of SpareFare.net – a startup on a mission to help people resell their unused travel reservations to online bargain hunters.

Describe the business, core products and services in one paragraph.

SpareFare.net connects people who have bought flights, holiday packages or hotel rooms but can no longer use them, with people seeking discounted travel options. By transferring their booked non-refundable reservations to SpareFare buyers, sellers are able to partially or fully recover the money they paid for the trips, while buyers get a true discount of up to 50-60% by not paying the current price of the bookings. We offer fraud protection to both buyers and sellers and dramatically reduce the risk of transferring flights, hotel rooms and holidays to strangers by acting as an intermediary

Who are your key customers?

For the supply side if the marketplace, our customers are everyone who has a travel reservation, but cannot go on their trip. Our buyers are young and flexible people, who love to travel and explore new cultures.

Who are your key partners?

None.

What business are you most likely to be compared to?

eBay (but specifically for travel and more secure).

What problem are you trying to solve for your customers?

Millions of people lose money on their unused travel bookings every year because they are not aware of any safe and hassle-free ways to resell their reservations. On the other hand, many people want to travel more but can’t afford it! SpareFare has created the perfect win-win situation for our customers.

What financial support did you have to launch the business?

Personal savings. My two co-founders and I have worked very hard for a long time to finance the startup and help us avoid the pressure of investors at an early stage.

Who validated the idea first – investors or customers?

Customers. The feedback we get is very encouraging and proves what we already knew – that this kind of service is very much needed. People love the idea and the feedback we often hear is “If I new abut you sooner, I would have saved so much money!”

What is the revenue model and strategy for profitability? 

We charge sellers a commission on the amount they recover when they sell their reservation. Without us they would lose everything they paid for the trip, so this is a total win for them. Listing on the site is free and if travellers do not sell their ticket, it won’t cost them anything.

What is the market opportunity? How scalable is this business? 

The market is big and, as most marketplace models, the opportunity to scale is great. Over 60 airlines officially allow ticket transfers for their flights. These airlines carry 700,000,000 passengers per year. These are mainly low-cost carriers and their market share is increasing every year. The value of the non-refundable hotel reservations which can be re-sold for a profit every year is £700,000,000. The retail value of the global hotel industry is £400 billion.

Competitive analysis – strengths, weaknesses, opportunities and threats.

• Strength: The service we provide is very needed and we have achieved excellent growth by word-of-mouth.
• Weakness: Our team is still small and we need experienced team members to join our exciting family.
• Opportunity: The market is new and we have a first mover advantage.
• Threat: We (and travellers) are at the mercy of travel providers – if airlines and hotels decide to ban transferable reservations, we won’t have a business.

Who are the team members and advisors?

There are six people in our team and if you include the outsourced functions we are nine. We work with four advisors, who have years of experience in the travel sector. We are also supported by an ex-Goldman Sachs investment banker, who advises us on financing and strategy.

Why do you think you are the best people to make this vision happen? 

Because we have been running the business successfully for over two years and it has grown from strength to strength. Everybody is very passionate about SpareFare and we dare to dream big.

What’s the motivation behind doing this? 

I want to create a new type of shared economy in travel. In five years, I want everyone to be aware that they can resell their travel reservations to other people, and for SpareFare to be the go-to site for everyone looking for a cheap holiday, flight or a hotel room. I want to enable millions of people every year to travel cheaply and see more of our amazing world. I want to help everyone who is not able to travel recoup at least some of the money they spent on their holidays, making travel more affordable for everyone.