Wego’ s $1bn bonanza
Thirteen years after it was founded, Wego’s co-founder and CEO, Ross Veitch says the company’s leap into the Middle East in 2013 was the travel search engine’s best decision yet
Travellers from across the Middle East and North Africa are driving Wego’ s staggering anticipated bookings numbers for the next year, according to Ross Veitch, the company's co-founder and CEO.
AT FIRST GLANCE THE marketplace for online travel bookings is like any other pool teaming with activity. Closer inspection, however, reveals it’s a whole lot more complicated to decipher.
The most ubiquitous players in the industry were the Expedias and Skyscanners – online travel agencies working directly with airlines to host their inventories. Then came the accommodation bookers; think Airbnb, booking.com, and hotels.com. A few years ago airlines and hotels, tired of having to give away a portion of their profits, threw themselves into the mix with their own websites. Last, but not wanting to be left with the least, are the traditional tour operators and travel agencies, attempting to stay relevant in a digital world by inching closer to their clientele online.
Amid all of this, in 2006, is when former Tourism Australia planner, and Yahoo!’s South East Asia product and development head, Ross Veitch, came to the realisation that the online travel booking marketplace needed to be simplified.
Having spent six years at one the internet’s first major search engine successes, Veitch’s ‘life after Yahoo!’ plan led him and former IHG Hotels e-commerce executive Craig Hewett, to found Bezurk in Singapore, with the aim to “help make travel search easier.”
The company’s proposition was an allencompassing net: scour the entire spectrum of the online travel booking marketplace and carry results on a convenient and simple to use platform for customers to book their itineraries from. Called ‘meta-search’, the model was one “that didn’t exist outside of the US at the time,” says Veitch. “There was a clear opportunity to take it beyond the US.”
Unfortunately, while the company’s name aptly described how convoluted the online space was becoming, market research proved ‘Bezurk’ wouldn’t get the company very far. “People had trouble remembering how to spell it… also if English isn’t your first language, as is the case for a large majority of our target audience, then it is difficult to remember at all because the word probably doesn’t mean anything to you,” he said in an earlier interview.
That wasn’t all that the young entrepreneur had to contend with. An early start in emerging markets should have meant first-mover advantage, but in an honest interview with WebinTravel last year, Veitch conceded “we moved there too early.”
“We thought they’d develop faster than they did, and we didn’t develop cash cows which could subsidise growth in other markets, like Skyscanner did. Maybe we should have started in Australia first and grown that into a cash cow,” he said.
Among the first things the company did was re-brand to Wego, a name which caught on much faster with customers. Then, after nearly a decade waiting in the shadows, Wego noticed visitor-tobooking conversions in the Middle East spike, from a pool that had grown by a factor of 10 compared to numbers from South East Asia. This prompted it to open its second headquarters in the Middle East, as well as launch the region’s first localised Arabic travel booking site.
“We were initially focused on the Asian markets. That changed in 2014, when I realised that Mena consumers were travelling frequently and spending a lot per trip, but were poorly served in online booking options.”
The timing was crucial, says Veitch: “When we first entered the Middle East about five years ago, no single brand was dedicated to online travel at such a scale in the region.” Fast forward to today and “Mena’s online travel space is experiencing a Cambrian explosion,” he says. So much so, that Veitch now believes the company is now finally “hitting its stride.”
In 2017, Wego recorded more than $500m in bookings. “This year we’re hoping to cross $1bn,” says Veitch. The most substantial, and growing, portion of that growth has come from the Middle East. “It’s a very important part of our business,” he says.
Backed by Middle East Venture Partners, as well as a reported $12m boost from the MBC Group, Wego has been scaling up rapidly in the region. Expanded marketing efforts, growing propensity to travel, as well as key events in the region have fuelled Wego’s growth.
In 2018, the company recorded a 16-fold increase in searches for itineraries in Russia from the region, on the
“I realised that Mena consumers were travelling frequently and spending a lot per trip, but were poorly served in online booking options”
back of the World Cup that took place in June. Partnerships with Gulf Air as well as Airbnb have also helped build its appeal, as has the fact that GCC currencies pegged to the dollar are making travelling abroad much more affordable, given that emerging markets currencies have faltered over the same period. “There really couldn’t be a better time to be a travel shopper [in the region],” says Veitch.
Wego today currently covers 95 percent of airlines in the Middle East and works with all 50 online travel agencies in the region. However, there is still plenty of room for the company to grow. “The Mena online travel market is still underpenetrated; only 30 percent of travel originating in the Mena region is booked online,” say Veitch.
Key obstacles toward realising that maximum potential remain problems that the Middle East has long contended with. An indisposition toward cashless transactions, and “the sheer amount of friction that visas and airport security add to the process of getting from A to B,” says Veitch. “Travel could be so much easier, cheaper, faster, and just more pleasant, if governments, airlines, and airports simply shared information better.”
Still, that doesn’t mean Veitch is letting the gas off Wego’s drive any time soon. The company’s product roadmap extends beyond 2020, with new product line extensions and features that will soon be ready to roll out. “I think Wego has the potential to be one of the largest travel companies in the world,” says Veitch confidently.
“And I want Wego to be the very first travel app users re-install each time they set up a new phone.”
“Travel could be so much easier, cheaper, faster and just more pleasant if governments, and airports shared information better”
Wego was initially focused on the Asian market before setting its sights on the Middle East
Wego expects to cross $1bn bookings in 2018, the largest portion of which are from Mena users
Wego currently covers nearly all the airlines currently serving the Middle East market
Mamoun Hmedan is the managing director for Wego in Mena and India