4 May, 2017

Ex-beauty queen, Buddhist economics deployed to confront OTA oligopoly

Imtiaz Muqbil

Bangkok – A former Canadian-Russian beauty queen, a Dutch convert to Buddhism, a hotelier driven by a passion to put justice back into the travel booking system and a high-powered techie have teamed up to create a portal that will give the “oligopoly” of giant online travel agents a run for the money.

traveliko Brand Ambassador Natalie Glebova, the Miss Universe 2005

Set for a mid-May launch, traveliko is designed to resolve what Yann Gouriou, COO and Co-Founder calls “all the acute pain points” plaguing the current hotel reservations turf — from the huge commissions being raked in by unnamed OTAs to the customer being forced to choose from hotels which are paying those high commissions rather than those which actually match the customer’s requirements.

The traveliko design incorporates philanthropy, sustainability and Buddhist economics — loyal customers will earn “Karma Points”, traveliko will give 20% of the net commissions it earns to charitable causes, and the hotels will be rated according to a Green Index that measures their commitment to sustainability.

The most important “acute pain point” it will combat is the much abhorred commission structure — the source of constant complaints by hotels worldwide, especially small and medium sized operators struggling to survive amidst intense competition from multinational hotel chains and Airbnb.

traveliko levies a 10% flat commission, as compared to 15-17% by mainline OTAs. Hotels are encouraged to pass on the savings to customers via incentives such as a free bottle of wine, late check-out, massage or something similar. That builds customer loyalty for both the hotel and traveliko.

The current crop of OTAs began by levying commissions of 5%, lower than the 10% being paid to travel agents at the time, and gradually raised them as their volume and distribution power grew.

“If hotels want more visibility, they have to pay more which can go up to 30%. So what’s left for the hotels?” asked Mr. Gouriou. “You should see the amount of money they make on the back of the hotels. I know how much they make. I don’t want to say it in public, but it’s in the nine figures.”

Mr Gouriou, 40, founder of Unicorn Hotels and Resorts, a boutique hotel management company, said he set about three years ago to find ways of alleviating his growing frustration. He partnered with Co-Founder and Chief Technology Officer Bjorn Harvold to get it going with seed funding of US$100,000.

When Finance Director and Co-Founder Martijn Dekker, 56, came on board, the funding grew to US$350,000. With a background in other sectors such as energy and industrial products, Mr. Dekker also brought with him experience in running companies and business development.

A convert to Buddhism, Mr. Dekker said that traveliko needs only 500 bookings per day to break even.

traveliko is valued at about US$15 million upon start up, but could rise by very conservative estimates to thrice that amount in three years. It’s HQ is in Singapore but launched in Thailand due to the country’s tourism appeal. Mr Gouriou said traveliko is looking for about 7,500 hotels to sign up from Thailand alone, and an average of 7,000 hotels from each of the other ASEAN countries.

Describing it as a “platform by hoteliers for hoteliers,” Mr. Gouriou said research and content development was guided by input from a roundtable of executives from the Centara and Anantara groups and Absolute Hotel Services. In addition to these, it has signed agreements with Dusit International and Red Planet Hotels as well a number of smaller chains and independent hotels in Thailand, Sri Lanka and the Maldives.

He said the mainstream OTAs are aggressively luring customers into buying a product they don’t want, that does not match their requirements nor their preferences and only benefits the OTAs. It leaves very little space for independent operators to market their property online.

He said, “We are trying to rebalance the system, and give power back to the hoteliers so that they can get on with their prime job of servicing their guests. They can monetise and sell their services and capture the customers at a higher price point. Hotels will pay less, and consumers will get more.”

From left: Bjorn Harvold, Ms Glebova, Martijn Dekker and Yann Gouriou.

traveliko will also eliminate the front-page visibility advantage. Said Bjorn Harvold, “Surprisingly few customers are aware that the hotels they see on the first page of a search when using one of the big OTAs, are not necessarily the hotels that would fit them best. They are simply hotels that are commercially more interesting and more profitable to the OTA. traveliko breaks that paradigm by providing a non-partial map display with all the hotels equally visible and categorised by filters that the user controls. It’s mobile friendly, easy to use and offers a truly tailored booking experience”.

Although the media release was headlined “Reshaping the Sharing Economy”, Mr. Gouriou said, “Sharing means giving without expecting anything in return. We are giving a new angle to the sharing economy. We will also share data analytics with the hotels so that they understand their customers better. The OTAs share nothing.”

He said it will be easy for hotels to sign up, and they will find it costing them less than running their own direct distribution channel. He called on them to “give us good content.” It will also have hotel reviews, like Airbnb.

“We have a cause to defend. We are starting a movement to change the way we do business, make the hotels happy and give back to the environment at the same time. Every stakeholder is a part of the story.”

On the marketing side, in addition to the visual impact presence of Brand Ambassador Natalie Glebova, 35, who won the Miss Universe 2005 pageant in Bangkok, traveliko will be engaging in heavy-duty storytelling, use of social media, PR and communication referral program, word of mouth and strategic partnerships.

Said Mr. Gouriou, “We will be buying loyalty through great user experience, not by buying ads on Google. We don’t want to compete against our hotel partners via pay per click. I don’t think Google will invite us to their Christmas party.”

The Press release quotes Finance Director Dekker as saying, “traveliko will also donate 20% of the net commission earned on each booking to project-oriented charities selected by users in the countries they plan to visit. The system tracks these contributions to charity, awarding the Karma Points to users every time they book and donate. Karma Points are also earned through referrals, reviews and other online engagement.

“When you book through traveliko, you can allocate a donation to the type of charity you feel most strongly about – Animals, People or the Planet. We partner with organizations such as Socialgiver in Thailand, as well as global charities including UNICEF and WWF to help fund projects we can commit to and report back on to our customers,” explains Mr. Dekker.

Added Mr. Gouriou, “As the points pile up, the person who earns the most Karma Points will be rewarded in a big way.”

Ms Natalie Glebova was quoted as saying, “If all the existing OTAs gave back 20% of their commissions to worthy causes, the travel industry could make an enormous difference in terms of helping the world’s underprivileged people, protecting endangered animals and preserving the natural environment. With traveliko you can Travel with your Heart.”

In addition to Mr. Horvald, the portal was developed by a multinational team of people from Thailand, Pakistan and the United States.

Mr. Gouriou said the founders had tried hard to keep the project under wraps during the long gestation period. Now that it is out, he said, “I know they (the OTAs) will come after us. We are ready for them. I want them to come after us.”

Asked how they plan to resist efforts to buy them out just to put them out of business, Mr Gouriou said, “We are an independent operator and will always remain so.”

Hotels looking to join traveliko can visit https://hotelier.traveliko.com