Time for a holiday!
With the rapidly growing travel sector in the Middle East, HolidayME was developed to allow customers to create tailor-made holiday packages at competitive rates.
HolidayME–Holiday to the power of ‘ME’–was created to address the issue of expensive holiday packages by allowing consumers to tailor-make their own at a reasonable price. The Dubai-based online travel company was founded by Geet Bhalla and Digvijay Pratap in 2014.
According to the Phocuswright Middle East Online Travel Overview, the Middle East is the fastest growing market when it comes to travel, averaging about nine to 10 per cent against the global average of 4.4 per cent growth. When a consumer wants to book a flight or a hotel online, there are a number of players available. “The global market size is worth about $90 billion, including air travel, hotels, car rental, and cruises and approximately 35 per cent of that is leisure. that is about a $30 billion market share. The online penetration of flight and hotel bookings averages 20 per cent, depending on the country. The UAE is slightly higher at about 25-27 per cent, while Saudi Arabia is slightly lower at 18-19 per cent,” said Bhalla. With 35 per cent of global travel happening for leisure, there was a clear market for online holiday packages.
The mechanism of the travel industry allows the HolidayME team to buy flights and hotel reservations in advance and create a holiday package at much more reasonable rate than if the consumer tried to put it together themselves. This benefit can equate to savings of 25 to 45, or 50 per cent that is passed on to the customer, without compromising their holiday experience. Furthermore, the company is able to provide full support in English and Arabic.
“Many customers end up booking holidays at the last moment, when prices are generally higher. We’re able to give value to the customer from a buying standpoint. Also when going to a destination for the first time, people spend a whole lot time trying to understand what the destination is about, which hotels they should stay in, what they should avoid, where they should go, and what they should they experience. Our team of travel experts do the groundwork for them; when they buy a package from us, those guidelines are already established,” Bhalla said. Based on customers’ preferences a hotel is selected based on its proximity to the city, or the beach or a great view. Similar elements, such as what should not be missed, or what should be avoided, is taken care of by the team as well. That saved time is also passed on to the customer; they do not have to experience the hassles of building a package which would cost more money and, at the end, they still cannot be sure what the experience is going to be.
Bhalla said it made sense to set up the business in Dubai owing to its position in the Middle East as a regional hub to conduct business and to travel. Secondly, two of the world’s major full-service carriers, Etihad and Emirates, fly from Dubai as do major low-cost carriers FlyDubai and AirArabia.
“The online travel presence in the UAE is higher than anywhere else in the region, and the spend rate is higher too. In terms of a general business environment, Dubai offers a free zone structure which was critical to us from the set-up standpoint. All these considerations together make Dubai the ideal location,” Bhalla said.
The company invested a substantial amount of money in developing the product and online product management included continuously testing the model to ensure consumer needs were being met, which for the start-up turned into an expensive proposition. “We built a product that we thought was intuitive, but when it was tested actually test it was found a few elements were missing and that consumers wanted something a bit different. It meant a fairly big, expensive change–we had to turn it around without spending too much money, but we also had to be able to show traction for when we started fundraising,” said Bhalla, adding that having a dedicated team that bought into the vision of the company was essential.
Following the platform’s launch in November 2014, HolidayME secured $4 million from Saudi Arabian trading company, Al Sanie Group. In October 2016, the company raised a further $7 million in Series-A funding from a number of investors including Saudi Arabia-based F&C Overseas Investments and Accel Partners. Accel’s early stage investments include Dropbox, Spotify, Flipkart, and a 2005 funding round in Facebook. Al Sanie Group also participated, recommitting to HolidayME.
“We started getting the right traction and saw there is a demand for the product, so we did fundraising to scale in three areas. The first was to invest in technology to make the product easier to use. The model needs a lot of technology investment so that it can be constantly adapted to buying and delivered effectively. Second, we needed to get our supplier arrangement right; it takes a lot of work to ensure we are working with the right service providers. Finally, from a customer acquisition standpoint, we need to invest in marketing,” Bhalla said.
Having Accel Partners on board as an investor has not only provided financial support. The Silicon Valley investor has also provided valuable input regarding structuring the organisation as it has grown as well as insight into building the company’s next level of technology, given its portfolio of tech companies.
“This business is about constantly testing various metrics. Accel Partners has a big team with really intelligent people who know how markets behave, offer sound business advice and are up to date on technology. We’re not likely to make the same mistakes other companies have made. If we need to reach out to an expert in a certain field, it becomes so much easier when an investor such as Accel Partners is involved in the process,” said Bhalla.
The other challenge facing the founders was hiring the right team of people. The company started with three people and now has a team of 150 across three offices: Dubai, a technology development centre in Pune, India, and their recently opened office in Saudi Arabia. “When you’re a start-up, you’re not really in a position to offer people high salaries to join your team. It is essential to get them to buy into the company vision, particularly if you’re targeting top talent. They will take that leap of faith when they are convinced that the leadership in the organisation has a clear vision as well as a plan to achieve that vision,” said Bhalla.
He added that when selecting staff members, it’s important to look at what motivates people, since money is not the only driver. The right people joined the tech division, for example, because they wanted to use the platform wherein HolidayME has invested some of the latest framework technology.
Motivating the right people to stay also doesn’t necessarily have to include financial remuneration. “We’re a holiday company and being able to send staff members on holiday is a nice incentive. It may not have a high monetary value, but it can provide a high level of satisfaction, which keeps them engaged in the organisation,” he said.
Having just expanded into the Saudi Arabian market, the HolidayME team has had to adapt their offerings. Compared to the UAE market, which is dominated by expats, the Saudi population is predominantly Saudi nationals and they have different preferences and prefer to travel to different destinations. When Turkey recently experienced instability, the UAE-based customers wanted to visit different destinations, while it remained a popular destination with the Saudi market. Saudi customers also like to travel to Morocco and Egypt, which are not as popular with clients from the UAE. UAE-based customers tend to prefer direct flights, while Saudi customers do not mind flying on a one-stop route.
“To accommodate the UAE market, we take into account buying behaviour of different nationalities as well as the fact that certain nationalities can move around more freely, without requiring visas. Food and accommodation preferences also differ. Larger families might prefer serviced apartments while smaller families might be happy to stay at a hotel. Some families might want a beach destination; others might want a beach destination that is more private. Once we know what a customer wants, we can easily tailor the products accordingly,” he said.
The team will continue to focus on these two core markets and try to acquire more customers while expanding the products and destinations offered. Investing in technology will remain an ongoing activity, following the launch of a new product–Discover–a technology platform that allows customers to create a holiday package and have it delivered simultaneously.
“Buying a holiday can take a few days. This technology allows us to showcase our products to our customer, make their customisations and changes and create the package within 10 minutes. We’ve invested a lot in this platform and we will continue to develop it in 2017,” said Bhalla.
Travel and Trump
In light of recent media attention around President Trump’s proposed travel restrictions, Bhalla doesn’t think this will make people stop travelling in spite of any political or social upheaval; they may simply change destinations. Trends over the last couple of years have seen newer destinations emerge, such as Georgia and Armenia, which were not previously visited and are now gaining popularity. He added that he is optimistic that the travel sector will continue to grow because people tend to spend less money on material goods, and more money on having valuable experiences, which travel facilitates.
The Middle East lacked an online model that allowed consumers to created holiday packages that were tailored to their needs, despite being the region with the fastest growing travel market.
HolidayME developed a suitable online platform that allows customer to purchase tailor-made holidays at a reasonable rate. By monitoring consumer behaviour to make immediate changes as needed, the company created enough traction for investor interest. In 2016 the company raised $7 million is Series-A funding to invest in improving the technology used as well as further develop relationships with suppliers such as hotels and airlines.
Currently customers can select 400 holiday packages from over 200 destinations, and can choose over 8,000 activities. Customers are able to make bookings at over 300,000 hotels and can use the company’s flight booking platform which offers competitive options.
To date the company has served over 50,000 customers.