Despite a new wave of business travel startups rising up around the world, breaking into the conservative world of corporate travel isn’t easy.
For Barcelona-based Travelperk, focusing first on the highly fragmented European business travel market has proven a strong entry point to the market.
According to Travelperk CEO Avi Meir, bringing simplicity to growing companies with complex needs has been a differentiator in a complex market. Having its own dedicated support staff has helped the company grow, as well.
“Nobody actually wants to call in and talk with somebody when they book a flight or a hotel, but sometimes you have to chat with us, you have to call us, you have to send an email if you want to change something that’s wrong,” Meir told Skift. “That’s the moment for us to shine, right
Skift spoke to Meir about user experience for business travel, avoiding buzzwords, and scaling a travel startup in the fragmented European marketplace.
This interview has been edited for length and clarity.
Skift: Why did you get into the business travel booking world at a time that the sector is dominated by so many big players?
Avi Meir: Companies today don’t have a good solution when it comes to booking and managing travel, especially small- to medium-sized businesses. The two categories that exist are not working well. First category being the travel agency, which only manage the side of travel. They have huge leakage, probably 50 percent.
Travelers really dislike bad solutions, nobody uses travel agencies these days anymore for vacation, for holiday. It feels unnatural, wrong, and expensive, and clunky to use a travel agency. And then the [online booking] side works pretty well for travelers, up to the point that they need support. And it doesn’t work with companies, because by definition, they have 200 suppliers. If you’re a supplier, how do you [provide a] consistent level of support, how do you get your share, how do you provide centralized invoicing of payments, use of profiles, and all of that stuff?
So you basically have to choose between a bad solution or a bad solution. We had a few months at the beginning where we got inspired by Rocketrip and said maybe we do something with them. Then we realized that the big opportunity is actually an OTA for business travel. So we kind of pivoted from that, it took us around eight months to do this pivot, so we really started in 2016 with this new model of business travel, it’s an OTA, end-to-end. Sell travel, do our own support, and go from there.
Skift: You’ve mainly focused on serving Europe, which is underserved but a highly fragmented market. Why take on that challenge?
Meir: That’s a great question. We see it as actually something positive, if you think about it. This fragmentation in Europe actually is driving our strategy to really focus on Europe. So you will not see us as much in US at the moment. We are present in the US and we’re growing globally, but our approach is to serve European companies that travel globally, either within Europe or some other countries in Asia, or the other way around, American companies or Asian companies who travel to Europe.
And for example when we talk about rail, we are just now [launching a] partnership with Trainline. We have regional, U.K. rail, and go from Manchester to London. Book a train with us, and book the hotel and car rental. A lot of the European travel is based on train, especially the domestic, obviously. And you have to have amazing rail content if you want to compete there, so that’s one example, but we’ve been really investing heavily in inventory. It hasn’t been easy, I can see two or three years from where we are now, and we’re still at the beginning really of what we can do.
Skift: It’s an open secret that many emerging corporate travel companies outsource support and fulfillment to existing agencies. Why has Travelperk hired its own service staff?
Meir: We do our service in-house, so roughly half of our team, we have around 260 people today. Up from 20 people two years ago. And around half of this work force is in in-house customer support, we don’t outsource it. We never will actually outsource the customer-facing side. It’s a huge expense for us, but also this is what drives, we’re a team. And the point is, we believe that the right way to win business travel is to have an amazing inventory, plus amazing service when you need it.
Nobody actually wants to call in and talk with somebody when they book a flight or a hotel, but sometimes you have to chat with us, you have to call us, you have to send an email if you want to change something that’s wrong, and that’s the moment for us to shine, right?
Skift: Most corporate booking tools really suck. As a new entrant to the market, how have you designed the user experience to be pleasant to use for travelers?
Meir: So the way we look at it is, first, we have to not suck, right?
The Google motto is, “Don’t be evil,” or something. The motto for us is like, “Don’t suck.” So for example, if flight sucks because you don’t have access to the full inventory and you have to make a search, send a screenshot to your agent, and then agent books it for you, that sucks, right? So how can we avoid that? Inventory’s key.
We really looked at what sucks in the existing experiences, and by the way, I think smaller agencies also suck for business traveling, they’re not meant for that. They’re meant for booking a holiday. We really look at what are the main points, i.e, what sucks with existing tools and how can we solve that first. So we really focus on the main points, is our product approach, and we are not doing anything fancy, if it doesn’t solve a problem.
For example, you don’t hear it anymore as much, but two years ago it was a very big trend in business travel to talk about AI and chatbots. I was very skeptical about it, I didn’t see how it would solve a problem. The jury’s still out on is chat the right user experience for when you want to search for travel and book.
Skift: I mean it’s obviously not. It can be useful for some automated responses, like asking when a flight is, but nobody wants to use chat when booking something or wait in a digital queue when something goes wrong.
Meir: Exactly. I don’t think anybody went to Booking.com, made a search for a hotel last weekend, and said, “I wish I could have a chat with someone to book this.”
I’m a bit skeptical about the buzz of some stuff, and going back to your question, we went back to the base. What are the main points that people feel today, how could we solve it. And then benchmark, and that’s important, benchmark against consumer OTAs.
Who knows, maybe AI will get there in like 20 years. But right now, it’s a nice experience to know that you have a real team behind you, just waiting to solve any problem you have, it just feels good.
Skift: You’ve raised a lot of money over the last two years. How challenging has it been to scale?
Meir: It’s very challenging, we’ve raised $75 million dollars so far. Most of it was actually last year, and we went from 20 people two years ago, to over 250 today, and we’ll probably finish the year with around 400, more or less. Most of us are in Barcelona, we have, we just opened one in Berlin, and we will keep opening more and more local offices, both fit for sales and management support. So it’s been very challenging, I think the main part is that you could go down the path of slowing down, because you have so many people. That’s something that we’re really [willing to do], we’re a company that still grows like hundreds of percents a year, high hundreds right, so not just two hundreds, in revenue, right. So going from single digit median to hundreds of millions of dollars in sales, in two years.
Everything has to change every six months. The system needs to change, and sometimes your team needs to change. The priority’s always, let’s not slow down and let’s keep fixing whatever problem our travelers have and our users have, and focusing on the impact. Sometimes I think you can get confused by, “Oh wow, we have so many researchers that we can do everything.” I mean that’s true in travel, especially in business travel I would argue, because everything else that existed up until two or three years ago sucked so much, you have so much opportunity. You can go there, you can go to geography, size of company, size of product, what you’re selling, everything, you have endless opportunities, and that’s actually the risk.
Skift: What do you make of the US-based business travel startups partnering with the biggest travel management companies in the world. Is that ever something you’d consider for Travelperk?
Meir: No. Of course we know, we speak with everybody and, it’s a small world, right, so it’s good to be friendly with everybody. We feel like we could do better work in providing the experience to our customers. And there’s a lot of value in controlling the experience, including the service side.
A lot of these deals that you mentioned, have a component where the service is outsourced to a bigger TMC, and then Lola will do the technology, or Upside will do the technology for them, et cetera. This is kind of breaking one of the most important things we do, which is provide a service. I don’t doubt that Amex can provide an amazing service, but I think I can provide better service through my product for my travelers. So that’s what drives our decision to really keep the experience end-to-end. You never know what will happen in the future, but right now, we really focus on not doing cuts.
It’s been a tough one to explain to the board why we’re not optimizing by outsourcing through an agency in our early days, but I think now everybody sees it. Just to see such a different behavior of customers, if you can provide an amazing experience, you can control it… It would have been easier to outsource that to an agency, but I’m not interested in being a nice front-end to what should be a service, right? I’m not saying that a specific player is shitty, but I’m just not interested in that. I want to be a great front-end for an amazing service, and right now the only way we can provide it is by doing everything, including service.