It’s the morning after. My head is swimming in data and ideas. On Wednesday, we spent a day immersed in trying to uncover the Indonesian travel story at the first WIT Indonesia – and what a diverse, interesting tale of quirks and opportunities which we will reveal, chapter by chapter, over the next few weeks.
For this post though, I will focus on the start-up scene.
One, the winner of the WIT Start-Up Pitch was www.lagisatu.com, a newly-launched Malaysia-based meta search that includes HalalStars, a halal filter of hotels appropriate for Muslim travellers. Lagisatu means “one more” in English.
The Muslim travel market is estimated to be worth US$126 billion globally, according to a report presented at ITB Berlin 2013 and the potential in Indonesia, as the world’s largest Muslim country, is massive, not to mention right across South-east Asia where the site is focused.
“When we look at hotels and destinations to see if they are suitable for Muslims we base our assessment on three criteria: must-have, good-to-have and nice-to-have“, said Reem El Shafaki of DinarStandard who presented at ITB Berlin.
“Accordingly, Halal food and cooking as permitted by the Quran is an absolute must; prayer rooms where worshippers can practise their faith are also necessary. What is good to have is if tour operators can cater for the needs of Ramadan (e.g. breakfast before sunrise) and can supply sufficient washing areas. What is nice to have is if Muslim tourists can find a family-friendly, alcohol-free hotel with separate wellness areas for women.”
Lagisatu's CEO and co-founder Faeez Fadhlillah who accepted the award (above) said, "More than 240 million people in South-east Asian countries are practicing Muslims. HalalStars is a concept that's entirely new to this domain.”
With HalalStars, Muslim travellers are able to evaluate amenities that are designed to cater to their religious needs. “The HalalsStar concept is sure to be a saving grace among the Muslim travel community, which constitutes 40% of the Southeast Asian population,” he said.
Co-founder of the site is Austria's Juergen Gallistl. The partners work at Sonnenbaum, which owns the brand of WE!Come with offices in Cyberjaya – WE!Come owns www.welcometokl.com, www.welcome-kl.com, www.welcome-melaka.com and LagiSatu.
When I met both of them in the lift, Faeez told me that the HalalStars idea had been Gallistl’s. The two (pictured here) have also created a monkey mascot called “Bubu” who is rather cute.
Said Faeez, after winning the award, “It was simply an amazing event and I really look forward to be part of future Web In Travel events. We should be able to complete the full phase of our website by next week.”
To date, Lagisatu, which is targeted for travellers travelling within South-east Asia, has around 250,000 hotels in its database. It is available in five languages and covers 35 currencies, including all ASEAN currencies.
“The halal market is a huge one and the search filter is a great idea,” said Fritz Demopoulos, CEO, Queen’s Road Capital, co-chair of the judging panel. Other judges' comments included: “Love the segmentation. Great pitch!”, “meta search for Muslim world” and “like the catering for Muslims”.
WIT also presented its first “Rising Star” award to Valadoo, a social commerce company focused on curated travel packages. Wego took a stake in this company last year. CEO and founder Jaka Wiradisuria (below) accepted the award from Demopoulos at the event.
Ikut-Ikut attempted to address a local problem, Jakarta traffic, by offering a car pooling service. Co-founder Aurelien Arthapignet who called his product “the responsible social solution” said that by 2014, Jakarta would face traffic gridlock and that everyone should play a role in trying to solve this problem by car pooling.
According to him, there are 11.3m vehicle trips a day and an 11% increase in number of vehicles a year in Jakarta. It is estimated that US$1.3 billion dollars was lost in productivity in the city last year due to traffic congestion.
Its idea is to first get corporations involved in the programme as part of corporate social responsibility, to build up the trust and safety factor.
All six finalists also have the opportunity to do Proof of Concept test with AirAsia as part of a partnership between Asia's largest low cost airline and the WIT Start-Up Pitch programme sealed last week.
One thing’s for sure, the Indonesian market is teeming with start-ups getting into travel. Launched within weeks of WIT Indonesia was Nusatrip and at WIT, I met another company called kitook.com, an OTA backed by VCs out of Singapore. Another meta-search is also in the making – travelkota.com.
During the panel featuring four of Indonesia’s more established online travel players – ezytravel.co.id, Wego, rajakamar.com and Go Indonesia – it is clear the online travel market is still in its infancy.
Eric Tjetjep, CEO of ezytravel, said it wasn’t easy, “there’s no quick win”. He started the site in 2009 and had to shut it down because it was too early and even now in its second time around, he said the market was still in early stages. People search online but book offline with more than 90% of bookings being made through the call centres.
Most of the low cost airlines, the fastest growing segment of the market, are not available through the GDS and as such, air content was not easy to crack, he said.
Which is why the hotel market is the one most start-ups are going after – Go Indonesia and Rajakamar are battling it out for the domestic market which totalled 72.5 million passengers in 2012, the fifth largest in the world, after the US, China, Japan and Brazil – and both companies are backed by powerful traditional travel players, the former by the KAHA group and Rajakamar, a tripartite partnership between the three travel families of Panorama, Dwidaya and Smailing.
Having a powerful backer with strong travel relationships helps, said William Newley, CEO of Rajakamar, who’s worked in Indonesia for the past decade, most recently with GTA. And a lot of education of customers needs to be done to move them from traditional channels of booking to online, the panellists agreed. While Graham Hills, managing director of Wego, did not necessarily agree that a powerful traditional backer was needed for start-ups to succeed, he said that what was most needed was “patience, lots of it”.
In another panel, Brata Rafly, commercial director of Mandala Airlines, which is seeing 80% direct bookings through its website, noted that for most online models, a B2B2C approach – a combination of OTAs and traditional offline retailers to reach a wide base of travellers around Indonesia – was needed.
“The market’s hot and right now there are no clear winners,” said an investor who attended the event. Andy Zain, director of the Founder Institute for Indonesia, said that the market to chase and crack was the lower to middle end of the market – young, social and mobile.
It was also interesting that when we asked the 50 university students who attended the WITNext event who wanted to be an entrepreneur, all raised their hands.
Yes, Indonesia’s a land of entrepreneurs so you can bet there’ll be a lot more travel start-up activity to come.