Melissa Yang: Customer satisfaction is the key KPI.
When Melissa Yang returned home from the US to start a new vacation rentals site for China, she knew she had to do it differently. While the experience she had had working with Escapia, a vacation rental bookings site which was acquired by HomeAway in October 2010, came in handy, she knew a different approach had to be taken to build Tujia.
“In the US and Europe, you have good property managers and good properties. Offline is pretty matured and they built online to aggregate the supply. In China, it’s a new housing market. A lot of new properties were being built. The old properties were poor quality and there were very few good property managers.”
Thus, besides building an online platform, Tujia also had to get into property management. Its business model is part marketplace/part management, with income from both commissions on the transactions and revenue sharing with owners, the larger chunk of the two.
Its headquarters in Beijing has 200 staff who work on technology, digital marketing and sales while its regional teams number about 2,000, looking after owners and operational matters such as housekeeping.
“We had to come up with detailed criteria on how to select the properties, how to make the house ready, a detailed SOP on how to clean the house and constant telephone calls to check on properties and owners,” said Yang.
“Offline, it’s all about the details. We are in the service industry.”
The founding team felt it was important to address that level of detail in their business. “The audience in China is different. In Asia, we have higher expectations on quality of services. When I lived in the US, I took the thrash out myself. In China, people don’t like to do that. They are used to having help,” said Yang.
“There is also a lack of trust and credibility in general. Hotels have standards but in vacation rentals, each property is different and building trust is very important for us and the industry.
“It took us a while to bring the pieces together – build the culture, team spirit and technology.”
That hard work in tilling the soil though has paid off. Since its launch in December 2011, Tujia has become the largest vacation rentals site in China, with more than 100,000 listings, with a further 400,000 properties signed in the pipeline.
A villa in Anhui, one of the 100,000 properties listed on Tujia
It’s become the company investors want to be part of – altogether it’s raised $164 million in three rounds from seven investors who include Ctrip and Homeaway.
“Currently, we are focused on topline growth versus profit. We want to grow the number of properties and build the brand among consumers and maintain our quality.”
Indeed, Yang is focused on customer satisfaction, “that’s our key KPI”.
“We ask everybody who stay with us to rate and review us. One key question we ask is, would you like to come back and would you recommend us and 96% say yes. Out of a customer satisfaction rating of 5, our average is 4.6.
“That’s our key differentiator to build word of mouth.”
She said Chinese people are travelling differently and there’s a trend towards independent travel. “Usually people would take big vacations twice a year but now people are taking shorter breaks and more getaways.
“Last year, Baidu published its search results for Q2 and Q3 and it showed that the volume of searches for these keywords – FIT travel or self-drive – increased by 46%. More people now have cars and they want short getaways.”
An example – on 11/11, which is China’s Singles Day, Tujia saw RMB2 million in bookings through the Taobao platform. Of course, that’s nothing compared to the US$9 billion recorded by Alibaba but says that day is indicative of the trends China is setting in the world of e-commerce.
“It proves the power of the Chinese consuming class and travel is becoming a big part of their aspirations, along with the desire to travel differently. Events like Singles Day provide huge opportunities for travel companies.”
