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

Arabian Business English - - CONTENTS - BY SHAYAN SHA­KEEL

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

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