In our previous first post, in this series about How to Make Money Online and Travel, we talked very openly about how our first failed experiment in making money online brought us a grand total of…zero income!
Well, all was not lost, as soon after that embarrassing disaster, we had a new project up and running that was gradually bringing in small doses of cash here and there. It wasn’t going to make us rich, but it gave us the motivation to keep trying. Our second experiment helped us to confirm what we already hoped…that there were loads of options out there to help us with our dream of becoming location independent with an online automated technology based income.
So…as you are probably wondering…
How did we make money online?
Amazingly, after just 20 days on the road, we had secured a partnership with a small, local, family-run hotel in Santa Marta, Colombia, where we negotiated to earn 30% of their future online bookings.
We offered the hotel, which had zero online presence at that point, the opportunity to build their entire web infrastructure from scratch…for FREE!.This meant building their website, integrated with an online reservation system, creating social network accounts, as well as adding their property to hotel search engines such as HostelWorld, Booking.com and Expedia, in order to increase their online visibility.
Obviously, in return for all of this free work, we negotiated a deal with the owner, where we would earn 30% of all of their subsequent online bookings. Offline booking profits would remain 100% with the hotel owners of course.
It was a win-win setup for everyone. They had long wanted to create an online presence for their hotel business but didn’t know where to begin and we had the chance to earn our first stream of online income.
How did this all happen?
We had stayed at the hotel for a few days back in January, before we headed to the beautiful Tayrona National Park. Over the course of the few days we stayed there, we inadvertently became great friends with the charismatic and friendly owner, Jorge (who we still keep in touch with today!). Jorge confessed his financial woes to us and told us he desperately needed to increase his income, which he thought would happen if he could reach a larger, international audience of backpackers, tourists etc. I have always been very business minded and as I was on the hunt for an income, I was quick to see the potential business partnership. I told Steph, and despite the fact that she knows how impulsive I am, she thought it was a great idea and helped elaborate our future plan. We secretly started analyzing the hotels daily business (which meant noting the amount of clients we saw enter the hotel on a daily basis), so we were able to very roughly work out his current income and decide whether we thought it was possible to improve the average amount of daily clients he received, by expanding his business online. We believed it was.
Suddenly, after only 20 days of travel, we had an opportunity in front of us to make money doing what we knew best…’geeking’…and while helping out a new friend.
We approached Jorge and pitched him our idea. He loved it. He instantly agreed and we got straight to work. I got to work on all the geeky website stuff, while Steph helped with content writing, taking photos of the hotel and setting up social networks/emails etc. We stayed in the hotel for an extra few days working on the project, incase we needed any extra information from Jorge, or Steph needed to take more photos.
After a few days of intense work around many various ‘office’ locations in Santa Marta, we had the website live. It took another few weeks to really get everything set up, especially adding the hotel to the online booking engines (HostelWorld, Bookings.com and Expedia).
The Beginnings of an Online Income
As with any new business, the first few weeks were slow. The SEO hadn’t really kicked in, the social media presence was weak and the hotel had no reviews yet, for customers to base their booking decisions on. Therefore, for the first few weeks, we decided we needed a Google Adwords campaign to increase awareness and, we hoped, boost sales! We also decided to personally fund the campaign, not knowing whether it would be successful or not. Advertising vacation accommodation, in very popular tourist areas such as Santa Marta, will always yield high and expensive competition. Looking back, we are not sure it was a good idea to fund the advertising out of our own pocket, but we hoped the results would be worth the investment.
Gradually, the bookings came in and Jorge would send us our share of the profits every month as agreed. While, we still think the business was a good idea, it just wasn’t enough.
One of the problems with the whole setup was that, as well as building and managing the website, social networks, advertising and registration with the booking websites, we ALSO ended up doing the customer service. This kind of happened naturally, as we just thought it would be easier for us to manage it, instead of having to teach Jorge and his staff how to do it via email.
The customer service, while not difficult, was time consuming. People would constantly email us looking for rates, discounts and with various other (often ridiculous) questions. We did a pretty good job on customer service, but still only managed to convert about 5% of the inquirers into bookers.
After a few months, we realized that we were not getting enough bookings to make it worthwhile. We had even had one complaint about the quality of the hotel by a guest who’d booked through Expedia. We had no control over how the standard of the hotel was maintained. We were not there to make sure everything was satisfactory for the guests. We weren’t sure whether our online portrayal of the hotel was living up to the real-life reality…
After a few months, Jorge called us to let us know that he couldn’t continue with the business. He was having family matters that needed to be attended to and he was willing to go back to how things used to be and his old…less favorable clientele.
As he requested, we took the hotel off the booking websites but left the website up. We still get the occasional email to this day.
Since then, Jorge has told us that he is selling the hotel as he is moving to Bogota, so who knows what the future of the hotel will be.
So, that’s how that business came to an end but once again it was a great learning experience. We managed to make some money online and after the initial work was done, there wasn’t that much to do, apart from the odd customer service email response. It was an interesting experiment but not really something that is plausible in the long-term.
We think we would have needed much more hotels, with the same business setup, in order to make any decent money from this experiment.
The positive side of this experiment to earn money online, is that for the first time we actually made some money while traveling. More over, we made money even when we were sleeping (that is the end goal of automation), since reservations could come in without us having to do any additional work. The online booking system for the hotel gave us a boost of confidence that it was possible to earn an income without being attached to a job. This taste of success was going to be crucial in the near future and we were soon going to discover that.
However, the best thing we got out of the experience was a great new friend. In the meantime, just like Adam and Eve, Steph and I left the garden of Eden and took off to our next adventure.
Our next post in this series on How to Make Money Online and Travel, talks about our biggest project yet; one that is still in business today and growing bigger by the month. Subscribe to our RSS, or LIKE our Facebook Page to be notified when it’s published!
Let us know what you think of our experiment in the comments below!