How cracked up is crowdfunding for travel?

Several airlines have failed in attempts to crowdfund routes, but there are some travel-related success stories. Andrew Hennigan reports

When UK-based POP Airlines turned to crowdfunding to finance new direct routes from the UK to India in June this year the response of the crowd was, at best, disappointing. In the first two months, the airline reached just 1% of its £5m goal, a disappointing sum by all accounts. Yes the crowdfunding route to launch a direct route may sound a good idea in principle, but are people really willing to pay for it?

Other low-cost airlines have tried similar crowdfunding strategies for new routes without much success. Canada’s Zing airlines tried to raise $2,5m in 2015 for point-to-point routes across Canada but barely topped $1,000. In the USA Avatar Airlines tried to raise $5m on the Indiegogo crowdfunding platform for low-cost flights across the USA but the campaign raised just $50 before it was shut down for a breach of the site’s rules about perks. Avatar’s perks were certainly creative, including even a ‘Captain for the Weekend’ option that included round trip flights, hotel, ground school, Boeing 747 simulator time and a captain’s hat to keep.

But crowdfunding does work in some cases. UK-based business-only airline Odyssey Airlines succeeded in raising its £1m crowdfunding funding goal on the Crowdcube platform in 2014 – enough to move onto the next stage in traditional fundraising. Odyssey plans to offer premium non-stop flights from London City Airport to other major cities worldwide starting in 2017. 

One of the obvious differences is that they targeted the premium, business-only market. Other, less successful attempts were all focused on low-cost flights. It’s not hard to see why someone looking for the lowest cost might not want to pay upfront just to obtain extras that they could probably do without.

Gadgets on the go

Outside of airline routes crowdfunding has proved more successful in raising money for travel-related businesses. Most of the most spectacularly successful, though, tend to be in the non-essential gadget business rather than in transportation or hospitality, which seem to prefer more traditional fundraising approaches.

Searching through the major crowdfunding platforms like Kickstarter and Indiegogo reveals numerous flops that sometimes don’t even get the basic friends-and-family level funding, but there are also many cases where a campaign is oversubscribed several times.

Chicago-based Modobag’s ridable carry-on luggage, (Ridable luggage: the smart travel accessory with a catch, EyeforTravel, 30 August 2016), is a typical example of a very successful crowdfunding campaign, reaching more than 600% of its initial funding target in an Indigogo campaign. Another product in the same category, Shanghai-based Cowarobot’s R1 robot luggage that follows its owner, has passed 250% of its target in an Indiegogo campaign and is still going strong. Another smart suitcase, the Space Case 1 by Miami-based Planet Traveler, raised more than $900,000 in a Kickstarter campaign to create luggage with fingerprint opening, global tracking and self-weighing scales.

Travel clothes and accessories are sometimes popular, too, like the unusual Woolip frontal pillow, created by a father and daughter team in France to make sleeping in economy class seats less uncomfortable. This design has raised nearly 450% of its goal in an Indigogo campaign.

But some unusual travel gadgets clearly don’t attract the same enthusiasm. The Aroo Microvac from San Diego, California, is a portable pump allowing travellers to vacuum pack luggage so they can fit more in. Aroo has reached just 3% of its funding target in an Indiegogo campaign. The idea of shrink packing clothes is probably appealing, but the product might take up more space than it saves. This may work for hotels frequented by the big shoppers who have more to take home than they came with.

If there is a lesson in these success stories it is perhaps that there are more people willing to invest in smart luggage or designer travel cushions than in the actual journey. Crowdfunding does apparently work but it doesn’t work for everybody and it doesn’t work for everything.

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