TBO’s Gaurav Bhatnagar has “big plans” for APAC
Gaurav Bhatnagar, who is on a mission to build the world’s largest travel distribution platform, was elated when TBO.com clocked $10 million in GTV/sales in a single day in April 2023. “Coming out of COVID, it was hard to imagine that this milestone would come so soon,” he announced to his LinkedIn followers.
Well, Gaurav is even more excited now. First, there’s the moon landing by India’s Chandrayaan-3 mission on August 23 that has got the whole country excited and proud.
Gaurav Bhatnagar: “We thought the number of travel agents would decrease over time, but they have increased. We’ve reached an online/offline equilibrium for domestic – 65% online/35% offline – and the reverse for international travel.”
Catching up with WiT prior to his speaking at WiT Singapore 2023, Oct 2-4, in Singapore, he said, “I think it’s such an incredible achievement and it highlights India’s continued march towards becoming a large developed economy. Events like these are important because they help emerging countries like India to shed the old tags of being underdeveloped or poor ( we are still long way from prosperity but on the right track). For tourism, it’s very good profile building for both inbound and outbound travel.”
Specific to travel, he called the news of the 1,000 aircraft orders between Indigo and Air India announced at the Paris Air Show in June “mindblowing”.
“Imagine the impact of that,” he said. “This is inflexion point and it will be massive. A large working population with large purchasing power, and a Gen Z generation that thinks differently in how they travel but they are not decision makers yet. It’s a huge, exciting opportunity for outbound travel, which is our business.”
But before we jump up and dance, Gaurav throws in a note of caution, “It’s still a long game. We’re still a small market compared to other travel markets, maybe we’ll get to half the size of Europe in 10 years or China’s 150m trips, we’re 10-15 years away. So it will be a slow burn for a long time.
“But we are in the right place at the right time,” he said. “Actually,” he added, laughing, “We’ve been in the right place at the right time for a very long time – hopefully the right time will come.”
Global markets driving growth, India outbound’s the big bet for the future
Gaurav’s no stranger to the long game and slow burn. Gaurav, who calls himself a technologist, was working for Microsoft in the US when he decided to return to India in the mid-2000s to start a business. “At that time, there was a low cost revolution and I thought travel is going to be big – within the VC ecosystem, the thesis was that when Internet penetration reached a threshold, travel would go online.”
With co-founder Ankush Nijhawan, he started TBO in 2007, a B2B play to connect travel agents with global supply so they can sell travel anywhere. It’s taken many years and different investors – at least two change in investors (Naspers exited in 2017) – to get to this point. Today, its website says it has “145K+ travel buyers, 1M+ hotels worldwide, 120+ countries and 55+ supported currencies”.
Covid of course delivered a blow but gave the opportunity for the company to expand globally. Today, its largest markets are Middle Europe, Europe and Latin America with travel agents in those regions using TBO.com to sell travel.
Within India, the top outbound destinations for travel agents using the platform are Dubai, Thailand and London/New York. “This market – India outbound – is about to happen bigtime. We have 12-15% share of the outbound market now and we want to work with travel agents to grow the first-time traveller market for the next 10-15 years. First time travellers need a lot of hand holding and we want to nurture the travel agency ecosystem – this is our core business.
“Traditional travel agencies are also not so traditional anymore – they advertise on social media, work with influencers – and we are working with them to create that type of content.
“We thought the number of travel agents would decrease over time, but they have increased. Travel agents have reimagined themselves. We’ve reached an online/offline equilibrium for domestic – 65% online/35% offline – and the reverse for international travel.”
Gaurav said TBO.com has big plans for Asia Pacific, setting up teams in Indonesia, Malaysia and the Philippines. “It was the slowest to come back after the pandemic and we are massively investing in the market. We feel it is going to be the largest market.”
Indeed, there is strong affinity between India and Asia Pacific. Indian travellers helped shore up APAC destinations during the early stages of recovery, making up for the absence of Chinese travellers, from destinations such as Thailand, Singapore and Australia.
That early rush has awakened destinations in APAC to the potential that is India. “People still see India as a low-value market – 15-20m outbound trips, mostly labourers and students and maybe 5m-7m market opportunity – but the airline capacity, changing demographics plus the Indian passport is getting stronger – it’s a potent combination. Inherently, Indians love to travel – billions of domestic trips. It’s culturally in our DNA.”
In 2021, TBO had submitted draft papers with the Indian market regulator to raise $253 million through an initial public offering (IPO) of shares – that’s on hold for now.
Dynamic pricing, AI, creators’ economy – trends to watch
Gaurav said the company has been profitable from the start, and will continue to invest to grow its supply. “We are the second largest in flights in India but hotels are more profitable. We have diversified into other verticals – transfers, car rental, dynamic packaging, Umrah travel, cruise. – we want to enable travel agents to sell whatever they want to sell.”
Recently, a wholly-owned subsidiary, Tek Travels, acquired BookaBed, a business-to-business (B2B) accommodation wholesaler for an undisclosed amount. Headquartered in Switzerland’s Zug, Bookabed is said to be one of the largest online business-to-business booking engine in Ireland.
“Travel is complex, it is good to solve tough problems. We have 40,000 to 50,000 travel agents across 100 countries using us everyday. As a technologist, what I like about it is that tech makes it simple.”
As for what new tech he’s keeping his eye on, he said, “Hotels and chains going dynamic in distribution – that will enable onboarding supply, that’s huge. We won’t need thousands of contractors, just connectivity.
“Early indicators are that AL and LLM (Large Language Models) will help create interesting travel content. Tools like ChatGPT will make travel planning fundamentally different. I am curious about the creators’ economy – it hasn’t been fully monetized yet, we haven’t seen anything at scale.
“Yes, we have influencers but with travel, everyone wants to pay a commission for a sale, not marketing. Think of it as a giant human sales force, to help someone else travel.”
Asked if he’d ever been tempted to start a B2C model, he shivered, “No. In our part of the world, we’ve never seen anyone make money on a B2C. Indians are price sensitive, no loyalty and it’s hard when you’re selling a commodity. The cost of customer acquisition is very high. And besides, there’d be channel conflict.
“We want to focus on what we do very well.”
Note: Gaurav Bhatnagar will be speaking at WiT Singapore, Oct 2-4.
