A Glimpse of What We Are Building
I started my career in travel accidentally. It wasn't even on the list of choices I had when I was in school or even college. I wanted to become an Investment Banker; follow the money. I was on that path, then got knocked off ever so gently, & here we are. You are probably reading this because you are generally interested in travel or are curious to know what I am building in travel tech.
Travel now has become an all-consuming passion. Every trip I take is an opportunity to figure out what I can do better to solve for the traveller. Now to get back to what we are building.
Imagine if you have bought something on Flipkart or Amazon, & then they tell you that now you have to figure out the logistics of the product; I feel travel in its current avatar is something like this.
Travel tech has a rich history going back to the 60s, but that's also its biggest problem. Systems are so old that even today, airlines worldwide are the largest buyers of dot matrix printers; they have kept an obsolete industry alive. EDIFACT standards set in 1987 are still being used by major global distribution systems like Amadeus, Sabre, etc., around the world. The challenger to this has been something called NDC or New Distribution Capabilities. These new standards enable only one player in the ecosystem to create an e-commerce like experience for shoppers—no surprises for guessing that this one player is Airlines.
However, one big issue in this vision is that not all customers buy directly from airlines.
Low-cost carriers (LCC) are growing faster than Full-cost carriers (FCC); the latter isn't even dependent on GDSs, as they maintain their distribution. It is critical to understand because LCCs and their distributors, i.e., OTAs & other players, will try to provide consumers with a larger basket of choices for various services around travel. Like what Air Asia is trying to do with its super app.
E-commerce has come a long way because of technology, changes in consumer behaviour, & SaaS, which grew around it rapidly. But buying your travel is still pretty much the same & isn't an easy process unless you are ultra-rich. When I was working in travel, I always wondered how difficult it would be for a travel company to solve something like this? Why can't they help a traveller not only make them aware of the choices that they have but also help with actually buying it across their trip?
This was our starting point. While travel information is available across a broad spectrum of websites, information has not been a successful business model for anyone. Look at Culture Trip; they raised close to $100m on a narrative of building content, but in the end, they had to integrate booking to make that content meaningful beyond just information.
A typical travel planning journey looks something like this:
- Figuring out when & where to travel.
- Exact date discovery
- Best fare from the airline of choice
- Where to stay?
- What to do?
However, the above seems like an index to any travel planning. After coming back, you have successfully planned and executed an international trip, you feel like an expert of that destination. You pretend to know it better than the city that you grew up in. This happens because when you further zoom in, you start to see the various things that you did for that trip:
- Figuring out when you can take leaves & start seeding the thought to your reporting managers that you will take a block of leave soon.
- Where to travel is as personal a choice as what colour of underwear you like; sometimes, you can't justify it, but you still want to go or wear it.
- Then comes the research around requirements for entry: is it open to travel, does it require a Visa or not, how easy is it to get it, blah blah blah. For many people, this step comes before & then a place is finalized.
- I would have been a billionaire if I had gotten a dollar for the amount of time I have heard one should always search flights on incognito mode. Nonetheless, finding the airline that you are comfortable with, approx. cost of the tickets, & finding out the best dates to travel pretty much go in hand with finding out where to stay, options of staying, & whether that place is available or not.
- Once the above is booked, you look at things from #3. Getting those small things sorted can make or break your trip.
- Covid-19 compliance: RT-PCR tests, vaccine certificates, mandatory apps, etc.
- Mobile Data
- Airport Cabs
- Airport Amenities
- Lounge Access
- In-trip Assistance
- And the list goes on and on based on how deeply one likes to plan.
Most of the travel intermediaries have historically focused on point 4 & left the rest of it for the travellers to figure out by themselves. Some do provide information around it, while google search is considered the holy grail for this. For Covid-19 compliance information, many players opted for ready-made API-based solutions instead of deploying people to keep updating them.
This is where the problem lies & my above analogy comes in again.
Solving for an entire trip is an incredibly challenging issue from a business & engineering perspective. It's a collection of various small transactions that travellers end-up making, which in aggregate is more valuable from a bottom-line perspective than just selling flights & hotels.
To give a small example, currently travelling to Dubai for a holiday or work means apart from flights & hotel booking, you need to do the following:
- Visa for tourists & GDRFA approval for residents
- 48hrs prior RT-PCR
- 12hrs prior registration for Rapid RT-PCR at the airport (this can be done at the airport too, but doing it before saves 1hr of your time)
- Information about Lounge Access since people have to come 6 hrs before departure
- Airport Cabs at destination
This is just a pre-departure prep list & regulations, at times, are slightly different in different cities of the same country for international travellers. A few of these are compulsory, but collectively they provide a comfortable travelling experience in these times.
Anyone travelling would spend anywhere between Rs. 12-15k on these services while an avg. UAE return ticket is 20-25k if booked one month in advance, while during this festive season, it's going at Rs. 35-40k. Anyone selling just flight tickets would typically make 3-4% of revenue from the GMV flight, which would range anywhere between Rs. 600-1,600/-. While the revenue opportunity on the ancillaries listed above starts only at Rs. 1,800 & can go as high as Rs. 3,000/-.
The magic here is that the same customer is now 3-5x more profitable to whoever is selling them these services in addition to flights collective in a DIY & linear manner as the departure date comes closer. Sort of like a to-do list that needs to be ticked.
Just solving for the Dubai use case entails 6–7 different integrations & they aren't even the same for a country pair, i.e., India to Dubai. They change at city levels, i.e., Mumbai to Dubai or Delhi to Sharjah.
This is a very, very interesting problem that we are trying to solve. And in that journey towards solving it, we have been lucky enough to partner with a global investment fund to raise our pre-seed round, of which we will make an announcement soon.
More details to follow with that announcement. Thank you for reading!
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