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Indian hospitality industry Should Complete Its Recovery By End Of FY22 In Revenue & Occupancy terms: RateGain
In an interview with Bhanu Chopra Founder & Chairman, RateGain, talks about lockdown, post-covid scenario and more
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How has the year 2020 has been, taking into consideration that most of the year was impacted by lockdown due to COVID-19?
2020 allowed RateGain to once again, go back to its strength of changing gears and pivoting their approach to deal with a challenge. 2020 was not the first challenge we have faced and it most definitely will not be the last.
Even though it was hard for us and the industry, the level of activity and engagement has been never been higher than this. 2020 was the year when we won the most awards globally, we were the most active in media, we are doing more with our partners, and building new products, and driving innovation.
This acceleration of innovation, also helped us raise a fresh round of growth fund right in the middle of the pandemic being one of the very few travel-tech companies to raise a growth fund.
Have you witnessed any major changes in the business/sector in the post-Covid scenario?
Travel has always been a high touch industry, and delivering the high touch requires a very good ability to forecast based on past trends. However, No other industry had to deal with disruption at the scale of travel.
The future of travel will not be driven by data from the past, but data from what is happening more and more in real-time for the next few years, as we continue to battle the COVID-19 pandemic. With limited revenues, increasing costs the number one focus of the industry would be to either reduce its cost of acquiring guests or maximizing wallet share.
Continued volatility in restrictions; non-uniform vaccinations, rising cases, and travel-bubbles; has made it extremely for any travel company to understand how will travel demand come back and hence making it extremely difficult to forecast recovery accurately.
Niche websites that would cater to both ends of the spectrum; the last-minute deal seeker or the traveler who wants a healthy, trusted end-to-end tailored experience will continue to rise dividing the travel community and pushing to both extremes.
Shorter Booking Window, Longer Stay
1. While the average booking window before the pandemic would range from 90 days to 15 days ; during the pandemic this has shrunk from 21 days to 7 days effectively with most travelers looking for last-minute deals on longer stay options
2. Which takes us to the next trend which is staycations driven by extended WFH practices by most organizations, allowing people to drive down to remote locations
3. At RateGain, we have seen a definite increase in LOS (length of stay) patterns within our search and booking data. Our global reservation data which includes transactions from major Hotel chains, OTA (Online Travel agencies) and GDS (Global Distribution System) indicates a 35% increase in length of stay (2020 vs. 2019) in the hotel reservations.
4. This trend has continued into the first few weeks of January which is currently trending at 60% higher LOS compared to 2019 levels although bookings being made in January do tend to have a longer booking window as some travelers plan their yearly vacations which tend to have a longer LOS. As we have reported in the past, the vaccination news and roll out has had a direct impact on search and reservation levels.
How has your company been adjusting to the new normal?
The new normal has fostered more collaboration between global teams, as it broke down silos of office spaces and our Human resources function played a key role in that.
We were determined to not let our employees be impacted as well as ensure that our customers do not leave us. The singular focus of balancing these two is visible today when we see higher ENPS and NPS scores.
Re-energizing employees through innovative virtual events, contests, as well as a 10 day of complete company shut down during festivals were some of the things, we did to help our employees adjust and cope with the new normal.While the pandemic might be on its way out , however the changes to the workplace would be permanent and investing in our employees' health is a core boardroom agenda at RateGain
The Direct Outside approach was an initiative that was driven by the marketing and business teams to align with industry experts in every region to develop and share recovery strategies as well as real-time data to help the local travel industry prepare to deal with the pandemic.
How did you strategize your operations to ensure business continuity and minimize operational losses during this phase?
From the beginning of the pandemic, RateGain took steps to minimize impact on our employees, by curtailing all operational expenses as well as sales and marketing overheads. At the same time, our sales and marketing teams worked extra hard to provide insights and advice to the industry as part of the #bettertomorrow initiative, which brought together industry leaders for webinars, as well as a 1000 hours free consulting services to anyone in need with a single objective of helping them deal with the crisis and plan for a better tomorrow.
RateGain every week started publishing insights in collaboration with leading publications to share real-time data on recovery with customers, prospects and anyone that wanted to track the industry. Due to lack of visibility through their existing systems.
Did you have to decide to let go of some of your employees? And in the post-covid scenario, how do you see your team-building and hiring?
RateGain was able to raise growth funds that are being invested in new capabilities being built by using RateGain's proprietary data lake that stores over 240 billion data points annually with a purpose of building products that help tracking the recovery of travel' and allow developers, researchers to consume the data to build new apps; data-sets or research outside of travel.
Yes, initially we had to put 250 people across the globe on furlough, out of which 130 people were from India who were on furlough. But later, we rehired them on the same salaries, and any bonuses or promotions due were followed through on.
How much time do you think it will take for the industry to come back to normal as it was in the pre-covid era?
The Indian hospitality industry, which was the worst-hit by the pandemic, should complete its recovery by end of FY22 in revenue and occupancy terms, where as in terms of bookings we are already seeing good indicators of that recovery by Q3 FY21
What role did technology play in this phase, and how do you think the future is going to be, will it increase the dependence on technology?
Hospitality was a laggard in adopting technology, being one of the slowest across all industries. However the pandemic has forced the hospitality sector to look at driving more efficiency and synergy between different functions.
The technologies powering guest acquisition continue to operate in silos with no one platform powering customer acquisitions through predictive modeling driven by a dynamic and holistic data platform.
The biggest challenge we have as an industry today is the fragmentation of the acquisition journey., the traveler's end to end journey is broken while the traveler wants to have a personalized experience - wants to be known and anticipated.
The one platform is even more crucial now as Post COVID the entire travel pattern behavior has shifted. Historically, travel companies have priced using static and competitor data. Obviously, Post COVID the travel pattern, and its behavior will change which makes it even more difficult to rely on historical data.
Unfortunately, travel companies are leaving up to $37B in revenues annually due to the fragmentation.
As these silos require each segment in the industry approaching the customer with an equal amount of focus every time, d these inefficiencies cost the industry a lot of money, which can be considered prohibitive in the worst year for the industry in the last 75 years
As the pandemic makes it even more difficult to rely on historical data, disparate systems with important acquisition related data in silos making it difficult to follow a more scientific and predictable conversion strategy.
What are your plans going ahead in the post-covid phase?
RateGain is looking to capitalize on three shifts taking place in the industry.
" Bounce back in travel after the pandemic
" Fastracking of Online Travel due to the pandemic
" Need for more reliable insights and data as historical data becomes redundant
We are at the centre of these three shifts
Thanks to COVID the self-serve, online travel models will only get fastracked. Online travel market is projected to grow from $ 570 Billion in 2017 to $1.13 trillion in 2023 at a CAGR of 13. 16 %.
In addition to this, we are building a data warehouse that is helping us create new products that will serve new use cases for the industry, as well as help power products that can drive higher revenues for ancillary products.
Any other achievement you'd like to highlight which came about in the year.
This opportunity if divided into our current lines of businesses is of a significant size i.e. $9bn. With our aspiration to leverage interoperability by providing multiple capabilities to our clients this pie is only going to grow.
The combination of this approach will help us increase our footprint with our current clients which is just 15% to expand to almost 85% with cross selling/ upselling.
RateGain was awarded the most innovative startup of 2020 as well as awarded at BW Techtors last year as the Most Disruptive Travel tech product for Smart Distribution