For many, the move to e-commerce and, more specifically, online travel has been a recent trend driven by smartphone adoption and growing digital savvy.
Yet the entrepreneurial duo Marcel van de Ghinste and Jonathan Womersley identified the opportunities within online travel in 2009, when e-commerce was still in its infancy around the world.
As ambitious 25-year-old graduates, the pair launched TravelGround Group with just R12 000 and an available garage. By their own admission, they had little idea of what they were truly getting into…
Since launching TravelGround.com in 2009 and growing it organically, the young team have introduced LekkeSlaap, South Africa’s first Afrikaans leisure accommodation-booking platform.
This year saw them adding a third venture to the mix, WorkTripper, which is designed entirely for the business travel market.
The app enables users to find key features and services, such as flexible cancellations, negotiated rates and WiFi, from over 12 000 establishments across the country.
The three online travel sites within the TravelGround Group now attract over 750 000 unique visitors a month and process thousands of bookings each week.
finweek caught up with Van de Ghinste and Womersley to learn more about their e-commerce journey and future plans.
What did you do prior to starting your own business?
Jonathan was an electrical engineering student. Marcel was a sound engineer. Neither of us had any significant business experience before, so we certainly had a lot to learn!
Where did the idea come from?
In trying to book accommodation for ourselves, and finding no good resources for doing so, we thought there must be a better way. So we set out to build the best way to find and book accommodation in South Africa.
What motivated you to turn it into a business?
In those days the competition was not nearly as intense as it is today. There was a gap in the market for a decent accommodation-booking product, and we decided to give it a try.
How did you make your first sale?
After months of development we first launched our website in September 2009.
The anticipation was both exciting and terrifying. Of course, it didn’t start with an avalanche of bookings, but after a few hours one eventually did roll in. Despite the humble start, it was a very proud moment.
When did you officially start operating?
We began signing up guesthouses, hotels and B&Bs in March 2009, long before launching our site to customers.
Convincing establishment owners to provide all their information and photos before we were open to customers, and without having any business history, was a tough sell.
But after a few months of perseverance we somehow got 300 establishments listed, and we opened for bookings in September 2009.
How did you get funding to get started?
We started on our own tiny budget. We managed to grow slowly and organically for a few years, putting everything we earned back into the company.
By 2013 we were processing a few thousand bookings per month and we had a team of about 20.
At that time we took some private investment into the company, which allowed us to further expand the business. Before and after the investment we’ve always been cash-positive and profitable every year and we continue to invest in growing the company.
What have been the three biggest difficulties you’ve had to overcome?
1. Adapting to the times. Technology changes very rapidly, and our products have had to adapt with it. For example, when we first opened for business, smartphones barely existed. These days a major component of our traffic comes from various mobile devices, and our sites have to look good on all of them.
2. Maintaining a great company culture. The impact on company culture when growing the team can be challenging. We run a hospitality company, and for us to give awesome service we need to ensure that our team love coming to work in the morning. This is something that requires constant attention and it can be too easily forgotten.
3. Supplier relationships. We now partner with over 16 000 accommodation establishments individually. Managing this quantity of business relationships can be challenging, and we’ve learnt many lessons over the years. We now pride ourselves in the quality of these relationships and consider them one of our greatest assets.
Biggest lesson learnt?
That as an outsider things always look easier than they really are.
From the perspective of some 20-something-year-olds with no notable experience, it seemed that building this business would be easy – but that was far from the case! If we’d known just how complex and competitive the accommodation industry is, we may never have ventured into it.
Fortunately, our naïvety got us started, and we’re glad it did.
How tough is competition in your sector (online travel), and what differentiates you from others?
It is a very competitive space, so it’s important to keep adapting. There are a number of local businesses, as well as some large international competitors.
Our largest differentiator is definitely our customer service. Our thorough staff training and innovative call centre technology ensure that our customers receive the best customer service possible.
This has allowed our business to continue to grow steadily despite the arrival of major international players in the market.
How many people do you currently employ?
We have 101 permanent staff.
What is the best business advice you’ve ever received?
As a business grows day to day, administrative tasks can become all-consuming. The best advice we’ve received has been to frequently lift one’s head from the daily grind and focus on longer-term strategic decisions.
To pre-schedule time that is dedicated to nothing in particular besides general business brainstorming. These sessions can be fun, and often yield great new ideas.
What was unexpected?
When we first set out to develop an online accommodation-booking website, we seriously underestimated the magnitude and complexity of the “behind-the-scenes” technology and procedures that would be required.
In fact, the sections of our sites that our customers experience are only a small fraction of our overall system. We’ve developed systems and software that can effectively process thousands of transactions daily.
How do you stay motivated?
By always staying focused on the next exciting addition to our product or business. It’s important not to over-work.
Getting good rest and some exercise is crucial to sustaining a lasting business focus. Having some fun at work can’t hurt either!
What is your three-year goal for your company?
To continue to grow our market share in the South African accommodation-booking space, and to explore other opportunities beyond.