Article published in The Exchange on 2021-02-01
HotelOnline, leading e-commerce and digital marketing enabler for hotels in emerging markets rolling out strategic initiatives as East Africa recovers from Covid-19
For many businesses, 2020 would be a year they would not want to remember. The COVID-19 pandemic ravaged most of businesses globally with reduced sales, low cash flow, and restrictions to tame the spread of the pandemic. The situation was worse in the travel and tourism industry.
The United Nations World Tourism Organization estimates that global international tourist arrivals have decreased by 58 percent to 78 percent in 2020, leading to a potential loss of US$0.9 to 1.2 trillion in international tourism receipts. In many of the world’s cities, planned travel went down by
80 to 90 percent. More than 2.5 million Kenyans working in the tourism sector lost their jobs in the first half of 2020 due to COVID-19 related disruptions, according to the government. The travel industry in Kenya, which was equally affected by the COVID-19 disruption, is positioning itself on the recovery path as the country registers some resemblance of normalcy.
When the Kenyan authorities relaxed the rules as reported cases of the pandemic went down, many hotel owners were eager to open doors for new clients.
Apart from the concept of the restricted apartment, popularly known as ‘staycation’, most of the bookings had gone down and eateries had to contend with the high costs of establishing testing infrastructure for staff and patrons. Even the ‘staycations’ were not getting enough business due to subdued incomes from the would-be revellers.
While all this was happening, and with visible chaos in the industry, Kenya’s known travel-tech entrepreneurs Havar Bauck and Endre Opdal were busy strategizing how they can get the best from the situation.
These perennial entrepreneurs and owners of HotelOnline, leading e-commerce and digital marketing enabler for hotels in emerging markets had just acquired AfricaBookings, a travel booking company with a presence in Africa and Cloud9, a burgeoning Kenyan travel expedition experiences and activities booking start-up was ready to deploy them for the next level of dominating Africa.
They even rolled out a global multi-brand cloud kitchen Foodledoodle, the first of such in East Africa.
The hotel sector has fared better in Kenya than in many other markets. For instance, many hotels on the coast were fully booked during the holiday season. This was the high season, but this kind of occupancy is nevertheless a sign of an ongoing recovery.
According to Havar Bauck, co-founder of HotelOnline, the travel, and hospitality sector started recovering cautiously in August last year, and there has been a gradual resumption of domestic, regional, and intra-African travel.
“The rest of the world, particularly Europe and North America, is unlikely to recover until large segments of the population have been vaccinated. Realistically, we are talking about late Q2 and early Q3 for those markets,” says Havar.
Endre Opdal acknowledges that despite the challenges, the year was important in laying the groundwork. “2020 was a tough year, but we managed through the situation. With the acquisition of Africabookings and Cloud9, the restaurant business became a natural piece in the new puzzle, so it is all fully integrated as one company.”
Cloud9 brought in a new B2C focus and a strong foothold in the consumer segment. With Africabookings, the company expanded the hotel base to more than 5,000 properties, making HotelOnline a key player on the African continent. “In many ways, we are showing the world that what was previously deemed impossible in Africa can be done after all! Some of our international strategic partners are very eager to gain a stronger foothold on this continent, so our increased size is good news both for them and for us,” adds Opdal.
This has brought in an exciting collaboration with the recent one being Yanolja, the Korean unicorn best known for reinventing the concept of love hotels in Korea with a valuation of over $1 billion. Yanolja is aiming to take African hospitality to the forefront. “We are excited to work with them to offer an automated, digital user experience to hotel guests in Africa,” adds Opdal.
Havar expects more arrivals from intra-African travel than from international markets in the short term at least for the first half of the year. “As more people across the world get vaccinated, they will want to travel again, but we don’t expect to see the full effect of this until late Q2, or early Q3,” he adds.
With the market in East Africa opening up, Cloud9 has rolled out an interesting marketing concept that aims at making travelers enjoy discounted prices in different hotels. Winnie Kimathi, the head of B2C at Hotelonline notes that this is a new flagship by Cloud9, called #TerrificTravelTuesday. The concept is simple, yet powerful, Kimathi says. It consists of limited weekly offers with extreme discounts varying from 35% and some above 50% on hotels in the HotelOnline portfolio.
Kimathi notes, “We have a mailing list of 50,000 recipients, and a strong following in social media. Hotels are eager to attract guests as travel resumes, and with the exposure we offer, this is also good marketing for them. Hence, we can negotiate really good offers that in turn draw the attention of the market.”
The concept has been started in Kenya to expand to other East African countries. “East Africans stay tuned!” adds Kimathi noting that they are ready to take advantage of a constant love by East Africans to travel.
The travel-tech entity is not done yet. It has several innovations up its sleeve and plans to unleash them in 2021/22. In the short term, the company will introduce more B2C offers across the region, to make upscale vacations accessible to more people.
“People want to travel, and they crave amazing experiences. Unfortunately, they cannot easily buy their dream vacation with one month’s paycheck. We will soon be offering a solution where people can go for the trip they always wanted, and pay for it in manageable installments,” adds Havar.
In the course of 2021 and 2022, they will also be rolling out several new and exciting solutions for hospitality automation and digitization together with other strategic partners.
Havar lays out the plans to use the existing digital systems to reach out to more hotels in Africa and modernize their systems. “With the Africabookings acquisition, we have greatly increased the number of hotels using our marketing and distribution solutions. As a result, we are now helping more than 5000 hotels in 27 African countries get more bookings. Many of them are still running very analogous operations, though. Helping those hotels leapfrog into the digital era, automating their operations, and providing a streamlined, digital customer experience will be a key focus area for us in the months and years to come.”