Deals site Ensogo moves into travel
22/06/2011 by WiT

There is no doubt that deals are hot and everyone’s getting into it. Even Expedia. It tied up with Groupon recently in the US and Canada to create Groupon Getaways with Expedia, offering deeply discounted travel deals from its hotel client base.

In Asia, deal sites have popped up everywhere and there’s not a day when some deal or other will land in my inbox. And the travel sector is definitely hotting up.

The latest player to enter the travel deals space is Ensogo, a deals site focused onThailand, Indonesia and the Philippines, and which originally focused on entertainment and social deals.

Three months ago, Tai Parata, who worked with lastminute.com in Europe in the heady days of the first dot.com bubble before it went bust, and most recently, with ZUJI/Travelocity in Singapore, took on the reins of managing director-travel.

His mission is to expand the one-year-old business into travel, starting with hotel deals first, and later expanding into flights and activities.

Parata, who hails from Christchurch, New Zealand, had taken a year off work after leaving ZUJI to travel. He said he decided to return to the business because of the excitement associated with the deals space.

“It feels very much like when I was with lastminute.com – those early days of the Internet boom,” he said. “A lot of excitement and passion in the company and the team of people.”

Ensogo was started by the same people who founded Admax, the largest online advertising network in Southeast Asia with offices in Thailand, Malaysia, Singapore, Indonesia, Philippines and Vietnam.

With travel, Parata said it’s had to apply a different business model. The Groupon-like model of up to 50% cut on profit does not work for travel. As such, Ensogo works on commissions, a model the travel industry is used to.

“We’ve learnt that it is not good to be too aggressive on commissions. The good thing about what we do is we only get paid with transactions,” he said.

He calls Ensogo “a tactical marketing platform for fragmented industries”.

“We are not a distribution channel and should not be used as one. Maybe you use us only two to three times a year,” he said.

It currently has one million members across the region – about 70% are women – and offers up to seven travel deals a week. It’s also active on social networks like Facebook and Twitter.

Currently, it offers mainly hotels, mostly independent properties although it does feature some branded hotels, said Parata.

“It’s harder to work group-wide with brands because of the rate parity issue but we do have individual hotels who work with us,” he said.

Eventually he plans to expand into flights and activities. Ultimately, the plan is to offer customers deals on total travel packages covering flight, hotel and activities.

“The power of what we do is we can create a menu of experiences on a voucher, it’s only limited by our imagination,” he said.

No doubt the market is getting competitive – OTAs getting into deals, sites like Travelzoo also offering daily deals – but Parata believes the market is big enough for everyone. “It’s very fragmented and it’s a huge market out there.”

Some also argue that deals sites only work in markets like Thailand where there is excess inventory, Parata thinks there’s plenty of opportunity throughout the year such as shoulder periods or weekends when hotels need that extra push to put bodies in beds.

And while there’s talk that some OTAs were putting pressure on hotel partners not to work with deal sites, Parata doesn’t see the two competing. “Our business is purely deals,” he said.

He said it’d be interesting to see though if, for travel sites getting into deals, it could end up cannibalising their own business.

He said Ensogo chose to focus on Indonesia, Thailand and the Philippines because they were three difficult markets for competitors to enter.

You could also argue that deal sites are not that different from models like lastminute.com which offered discounts on distressed inventory. The difference is “we are not putting out thousands of rooms at any one time but inspiring people with the right deals at the right time”, said Parata.

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