Jon Hayes RewardStock in Istanbul

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Jon Hayes wanted to take his wife on the perfect honeymoon, and after combining his reward program points, they were traveling in style with two first class tickets to the Maldives and a stay at a luxury resort, all within budget. 
 
Now Hayes wants to help customers do the same with his startup RewardStock.  RewardStock works off a series of algorithms that configure various combinations in order to give users the best use of their reward program points, and if users do not have enough points to make it to their destination, RewardStock suggests ways to make up the points quickly. 
 
For Hayes, his startup has two functions—it helps people better use the points they’ve earned and it helps him travel the world with his wife. (He's pictured above on rewards travel in Istanbul.)
 
But the travel and leisure industry that Hayes is trying to leave his mark on isn’t the one that your grandparents might recognize. Instead he is playing in an industry that is fiercely competitive and evolving rapidly through the use of new technology, such as the algorithms that form the foundation of RewardStock. 
 

A growing industry 

There are an estimated 750 travel startups serving both businesses and consumers today, but the problem that arises as the number of companies grows is the need for funding to help them expand. Lucky enough, funding to these companies is "skyrocketing", according to CB Insights. Through the end of December 2015, more than $5.2 billion in venture capital funded 348 travel startup deals, a 125 percent jump from 2014 funding totals. 
 
There’s so much activity today because the travel industry, like so many others, is becoming more efficient, says Chris Heivly, a managing director of The Startup Factory who co-founded and spent 15 years at MapQuest. 

To him, efficiency means a lack of the friction. Friction 20 years ago meant limited travel options because all booking and travel happened through physical agents. While that has been eliminated, there's new friction for startups to tackle today because trip planning is so multi-layered— whether it’s during the booking, planning or “getting there” process, companies have the opportunity to create their own form of disruption. 

“There’s a niche for everything, and one of the things we encourage our startups to do is grab a niche they know a lot about and then expand from there,” Heivly says. 
 
An example is Hostel Rocket, a Durham travel startup The Startup Factory funded in 2014.  It allows users to find and book hostels worldwide across any device. The app had a successful initial launch, and after stalling a bit in 2015, resurfaced earlier this year with plans to relaunch under a new team in Berlin. 
 
Despite the inherent competitiveness that comes with a crowded, diverse industry, the incentives to join are still high. 
 
In 2016, U.S. residents and international visitors are expected to spend $979.4 billion, up 3.4% year-over-year, on U.S. travel expenditures, according to the U.S. Travel Association. That number doesn’t even account for what will be spent on overseas travel throughout the year. 
 
In terms of funding, home-rental service Airbnb notably closed the year out with another $100 million in funding on a $25.5 billion valuation. That's after using its lofty valuation to help it secure $1.5 billion of capital over the summer. 
 
So while there’s a risk, there’s also room for reward. 
 

A homegrown feel 

The Triangle is known for its bustling tech and startup community, which is why the Raleigh-Durham area has its fair share of travel-dedicated startups. Here are a few Triangle travel startups to watch:

Papilia logo
Year founded: February 2015 
Founder: Sophia Hyder 
Headquarters: HQ Raleigh 
Funding: None yet. 
Papilia is an all-inclusive travel app for destination travel. Hyder created the concept for Papilia when she was traveling to Argentina for a friend’s wedding, and she wanted an app to help her pack outfits that were culturally appropriate. When she discovered such an app wasn’t available, she decided to create her own. Now Papilia can help users pack based on activities, culture and style, with the caveat that all lists are designed to fit within a single carry-on.

dogphrendly logo
Year founded: 2015 
Founder: Jeff Kaplan 
Headquarters: American Underground 
Funding: None yet. 
Kaplan’s concept for dogphrendly came after traveling across country with his now wife and her two dogs. He says finding a spot to stop with the two dogs became difficult, and he needed a trusted way to find a place to stop with the dogs—enter dogphrendly. The company’s website has 12,000 dog parks, and 1,800 are listed within a beta version of an app. As the app expands, Kaplan says it to feature hotels and restaurants that are also pet friendly. 
 
Spring Engage Logo
Year founded: 2010 
Current executives: Peter Bourne and Shawn Williams 
Headquarters: HQ Raleigh 
Latest Funding: 2012 
On average, people visit more than 30 websites before they book a hotel, and Spring Engage works to make that booking process more personalized and engaging. Spring Engage pairs with hotels to help better engage users who are booking directly on its website. They do this by publicizing the best content for each particular user, thereby creating a totally customized experience each time. The company works with management groups and independent properties across the country, and is constantly expanded its reach.

Unanchor logo
Year founded: 2010 
Current executives: Cat Crews and Norm Santos 
Headquarters: American Underground 
Latest Funding: None yet. 
Going to a completely unknown destination is one thing that makes traveling a bit scary, and Unanchor helps to make the unknown feel a bit more known. Unanchor creates specialized itineraries based on recommendations from local bloggers, Craigslist and locals. Crews says the company wants to give its users the local’s experience in whatever city they’re traveling to. The site has more than 220 itineraries that plan out a day’s adventures, with an average cost of $4.99 per guide.

Rewardstock logo
Year founded: 2014 
Founder: Jon Hayes 
Funding: October 2015, Cofounders’ Capital 
Headquarters: Cofounders’ Capital in Cary, American Underground 
Users input all the balances from their reward programs, and then the site runs algorithms to analyze the potential ways to use those rewards to travel. If users don’t have enough rewards to make it to their destination, RewardStock then suggests ways to build up their points in order to get there quicker. Hayes says the program is designed to help users take what they have and stretch it, and it’s entirely free to use.

Tripstr logo
Year founded: 2013 
Founders: Austin Cooley, Adlai Holler, Jim Kitchen and Joe Regner 
Funding: $250,000 in a single round of early seed funding 
Headquarters: San Francisco, Calif. 
Tripstr is designed to turn your travel photos into a visual itinerary of your trip. Taking inspiration from Pinterest, the app lets your followers see where you went and then save the photos in case they want to go there themselves. The app was originally created in 2013 but has been reincarnated with a new private beta on Jan. 21. And while the Tripstr team is headquartered in San Francisco, it still has strong Carolina roots—founding partner Jim Kitchen is an entrepreneur-in-residence at UNC-Chapel Hill’s Kenan-Flagler Business School. Want to join the Tripstr beta before all the spots are taken? Here’s the link.

People-First Tourism screenshot

Year founded: 2011 
Current executives: Duarte Morais, Gene Brothers, John Bass and Tim Wallace  
Headquarters: HQ Raleigh 
Latest Funding: Not yet
An online marketplace launched last Fall helps travelers find and book unique experiences provided by local experts at various destinations. The site lets experts offer up workshops, tours and activities like fishing trips off the coast of North Carolina or an arts and crafts class or cooking lesson in Costa Rica (experiences offered today). Founded by a group of researchers from NC State University's social science and computer science departments, People-First Tourism is the university's first tech-based social venture spinout. Royalties from the site are being used to fund student scholarships and additional research on how tourism can benefit local communities and people.