Ithaka CEO Rahul Singh EXCLUSIVE on Thomas Cook investment and aim to become first global travel product from India
Ithaka hopes to tap into this by expanding its presence in up to 50 destinations by the end of 2019, allowing Indian travellers to go anywhere in the world. The platform is currently present in 20 destinations across Europe, South East Asia and Central Asia covering most popular destinations like Thailand, Bali, Switzerland as well as unique and upcoming destinations like Turkey, Croatia, etc.
Driven by better spending ability and aspirations of the youth, the Indian travel market is set to reach $48 billion by 2020, according to a Google-BCG report, providing massive opportunity for various platforms to flourish. Ithaka hopes to tap into this by expanding its presence in up to 50 destinations by the end of 2019, allowing Indian travellers to go anywhere in the world. The platform is currently present in 20 destinations across Europe, South East Asia and Central Asia covering most popular destinations like Thailand, Bali, Switzerland as well as unique and upcoming destinations like Turkey, Croatia, etc.
The platform recently secured an investment from Thomas Cook, which its Co-founder and CEO Rahul Singh believes, can be a game changer for travel industry in India. In an exclusive interview with Zee Business Online, Singh said that the synergies between the two companies is a no brainer. He added that while Ithaka is amazing at creating super personalised itineraries, Thomas Cook has extensive and competitive inventory that will allow the platform to price the itinerary and monetise the travelers better than it is doing right now.
Here are the edited excerpts of the interview -
Q. The travel market in the country is growing at a fast rate. What trends are driving this growth?
It’s no secret that outbound travel from India is exploding. UNWTO predicts that the annual tourist departures from India are going to grow to 50 million travelers in a few years from the current 26 million numbers. The average number of trips (international & domestic) has gone up to 4-6 trips a year now. That’s crazy compared to the 1-2 trips of the past era where people used to travel around Diwali and summer vacations. Some major social and economic shifts have contributed to the bullish rise in outbound travel from India. The primary ones are:
Social media and expansive coverage of travel in Bollywood have made travel mainstream and there has been a massive mentality shift. Travel is not just aspirational any more, it’s a way to bond with families and friends.
In the traditional package industry, travel used to be expensive as there were massive margins applied by the tour companies. But travel has become much cheaper now with low cost airlines and online travel platforms bringing better rates to travelers, easily accessible with just a few clicks.
Millennials and Gen Z have proved to be a game changer for leisure travel with this independent, confident lot eager to go out and explore the world. They come into disposable income very early in their lives and instead of saving for a house, they are spending on travel. Even travel loans are becoming quite common and young India is lapping it up.
Q. Most Indians like to plan their trips in advance. Do you see this as an opportunity or a challenge?
It's a phenomenal opportunity. And it’s a smart decision as well because typically flights and hotels cost increase close to the traveler date. When travelers plan in advance, they research a lot online and visit many websites trying to figure out their trip. This happens well before they have spent a single penny on the trip. That’s where Ithaka tries to capture travelers and help them out end to end. The advantage of doing this is that we can win over the trust of the customer with high value add in the planning phase which pays off in the booking phase as we can influence their purchase decisions.
Ithaka is leveraging this behaviour to build the first ever social commerce platform in travel. On Ithaka, travelers meet other travelers from our community who share their own experiences and that persuades travelers to book different things on the platform. On the contrary, OTAs spend a lot of money acquiring customers just for the transaction and are not able to add any value to the customer beyond a booking.
Q. What prompted a major like Thomas Cook to pick up a 24% stake in Ithaka?
Thomas Cook is a visionary company who like to stay ahead of the curve. Traditionally a brick and mortar business with immense brand equity, they have been looking at the travel tech space for a while now and we are proud that they identified Ithaka as their first ever investment. Thomas Cook’s primary target audience has been travelers above the age of 40 who book packages. As the market is changing, the millennial traveler is growing and will soon be the dominant travel group. They felt that our human plus tech philosophy effectively solves the travel planning problem for millennials which convinced them to invest.
4. There are so many travel platforms out there. How do you think Ithaka has created a unique identity for itself?
Most travel companies help travelers in one of these 3 ways:
a. Simplifying booking of hotels, flights or experiences
b. Selling a holiday package which can be customised to some extent
c. Providing content (written or visual) that travelers can use for research
The problem in all three above is that the experience is either not personalised or it’s too limited. The new age Indian traveler wants to explore the world just like the way they want to but the immense volume of content online is confusing and contradictory and before they book something it’s hard to decide what to book.
By enabling a deeply engaging and personal one on one conversation with a Travel Influencer, Ithaka attacks the problem head on. The Influencer with their experience helps the traveler explore the destination and recommends things that would be just perfect for the traveler. They also help give validation to ideas and research that the traveler is doing on the internet making things super easy for the traveler and they co-create an ideal itinerary together.
Decision making is the hardest problem in travel and on Ithaka, the traveler can identify the perfect itinerary, the right flights, hotels, experiences and mode of transport for their trip. And all in a matter of couple of hours of conversation as opposed to days of extensive research. Once that is done, bookings is just a click away which Ithaka enables via different partnerships.
This makes Ithaka the only full stack travel platform available in the market and the value add to the traveler is incomparable.
Q. Take us through your expansion plans.
Ithaka is already on a high growth path. We have grown our users and revenues 5x in the last 1 year. We have also expanded to 20 destinations from just 2. In the next 12 months, thaka’s primary expansion plan is to launch upto 100 destinations to enable Indians travel to anywhere in the world. We will also be growing our community to 10,000 members who will be helping more than 100,000 travelers every month.
By mid next year we will be going global with our product where travelers from US, Europe and other places will be able to have an optimised Ithaka experience. Right now it is customised for Indians. In the next 18-24 months, Ithaka will be the first truly global travel product to emerge from India.