The short answer: perhaps.
Every dog has its day, and every startup has its paradoxically Brownian yet well-defined growth curve. This means that, all things considered, it is possible to predict with a fair amount of accuracy where every startup you see today is headed in, say, five years. You can almost gauge the density of players that will come in, how many will fold, and how many will change their business model entirely and pivot to greener grass, as it were.
It’s like how Mark Essien says Nigeria is currently in the 2004 stage of the Brazilian market, and how he used that knowledge a few years ago to create Hotels.ng, the home-grown hotel booking startup with the really simple goal of making every hotel owner earn a decent living, even if they have their hotels squat in the middle of an entire Sheraton chain.
The business model itself is simple — the palaver is in the executing, and Mark will be the first to admit that the secret formula is constantly thinking up and executing on the ideas that keep the business going despite the murky, murky waters that are an occupational hazard of operating from Lagos, Nigeria.
Competition is as stiff as 42 upper lips, what with the Rocket Internet-backed Jovago (which is now one of several metal lions that have assembled to lend a Voltron-like form to the mammoth that is Jumia nowadays), and the horde of other startups currently skulking in the swamps, looking at the juicy cake that is the general OTA space.
And, let’s face it: the OTA space is really juicy. In fact, it is so juicy that even Google wants a slice of the pie. What’s a young startup founder from Ikot Ekpene to do?
So, should Hotels.ng do flights?
Mark Essien turned to his trusty Twitter followers to ask this earnest question. I imagine him seated in front of them, sleeves all rolled up, sipping from a can of Power Horse, his face creased in concern: ‘is it a great idea to book both your flight and your hotel rooms with us? Will you go for it? Will you think we’re veering off our original promise of sleek hotel booking magic and becoming some monster corporation sent by Capitalist Jesus to smite your pockets? In short, friends: will you still love us when we’re no longer young and beautiful?’
Should Hotels.ng do flights?— Mark Essien (@markessien) June 3, 2016
The answers that this tweet has gotten are shockingly certain that I can only admire them. Some have said ‘YESSSSS MARK, WE ARE RIGHT BEHIND YOU!’ or ‘NOPE NOPE NOPE DROP THE BABY AND RUN FELICIA!’
I am here in my corner unable to give such a certain response. Should hotels.ng do flights? I say: maybe.
The Answer is in The Average Millennial
When you mention flight tickets in Nigeria, two names should pop up in your head: WakaNow and Travelstart. If Mark Essien expands the Hotels.ng service offering to the flight sector, he’ll suddenly be competing with these two fellas. Does he stand a chance?
The above graph (from Mark’s MEADFA presentation in Jordan last year) shows that he has been nursing the idea for a while now…
Well — yes. You see, to some degree, the OTA space intersects with itself, which means that many of the customers of the hotel booking agency are customers of the flight agency.
I decided to try that assumption out, so I emailed Hotels.ng’s customer support and struck up a conversation with Bisola (charming lady, that one!) and asked her about booking a flight along with my hotel room.
Our conversation went something like this:
‘Hello Bisola, I would like to book a flight to Abuja (a return trip) and a hotel room for three nights there. Is this possible?’
‘Hi Udo, I can book you with a comfy degree of accuracy close to a location you prefer, but we do not do flight bookings, I’m afraid. I can assist by recommending a convenient service.’
‘Thanks — that would be helpful. Do you get many flight requests?’
‘Quite a lot, Udo! Flying is indeed part of the travel experience afterall.’
‘True. Thanks for your time. I’ll wait for your recommendations.’
I paraphrased some parts of the conversation in the interest of brevity, but that was it in a nutshell. Hotels.ng has a potential market to, well, market to if — or when — the company decides to do flights. But is it a wise strategy?
From a marketing perspective, it is. There are two kinds of businesses: a product-centric and customer-centric business. The product-centric model is one that is getting more and more difficult to adapt to the Millennial consumer.
The ideal business for the Millennial is a customer-centric one, and one of the key differences between those two business angles is how they view revenue with relation to the Generation Ys. After all, with a count of 75.4 million people, the millennials pretty much run the consumer side of business nowadays.
Product-centric businesses think in terms of market share, while consumer-centric businesses rationalize it as both a market share and a wallet share game.
What this means in a nutshell is customer-centric businesses aim to maximize the earnings they can get from one customer. So, you sell ONE product to ONE customer and make ONE naira. If your product was a complementary product, you could have sold ONE more other item and earned ONE more naira! In a nutshell, today’s businesses need to ask their customers ‘would you like fries with that?’
And that is exactly what Mark Essien — Hotels.ng — is asking. A flights portal under hotels.ng extends the value of each customer they have and might even make Hotels.ng even more valuable than it currently is (about $4 million, I hear).
Fantastic prospects, you chime. Why then would I be so conservative?
Well, for one: I do not know how firm a grip Hotels.ng has got on the hotels booking side of its business. Hotels.ng is currently doing an African expansion, and those things are pretty tricky (WeChat just closed shop in Nigeria, for example) and require a lot of focus to get right.
Adding on another level of difficulty will be diving into flight bookings. That is another beast to slay. I fear that it might cause a blurring of focus that might be difficult to manage. Difficult, but perhaps not impossible…?
Back to my opening paragraph: the general OTA space will see more worthy opponents somersaulting and trying to grab a piece of the cake. It only takes the pioneers to prove that their field is profitable before everyone else is slathering the glass-door entrance with saliva.
Hotels.ng has joined the league of (a shockingly small number of) startups who have proven that their model can survive the patently harsh Nigerian climate. This means that other startups are coming to ‘revolutionize’ in that same space. Brownian motion, but very well-defined curve.
Should Hotels.ng do flights? Mark Essien knows, I am sure, that the answer is in the same question that (I presume) birthed Hotels.ng. We only have to take a look at 2004-present Brazil and to understand how much of a gamble (or not) adding flights to a hotel booking platform is. Do you survive and explode to become the Gandalf of Africa (‘you shall not pass, TripAdvisor!’), or does it put too much strain on the hotel booking idea?