Bacarai is creating a marketplace to bring group airfare
online and add efficiencies – and upsell opportunities for airlines – to the
process. The system functions through artificial intelligence-powered agents
known as BacaBots that work on behalf of participating airlines to manage
inventory, eliminate duplicate bookings, provide dynamic pricing and more.
Bacarai’s founders have experience in the group airfare
sector, so that’s the initial focus for the company. But they say they intend for the
AI platform to expand in the future to improve the group and meetings business for
Describe both the business and technology aspects of your
Bacarai is a travel technology company that uses
independently evolving artificial intelligence agents to automate an airline’s
group travel program. This will allow airlines to distribute group contracts in
a central marketplace, finally allowing customers to shop for group offers
The technology will not only make the sales process easier
through automation, it will model all the nuances of group contract terms and
pricing. Independent AI agents will learn to manage inventory, eliminate
duplicate bookings, provide dynamic pricing and terms on group contracts, and
act in the best interest of their airline because they will be owned and
managed in the airline’s native system. This allows airlines ultimate control
and flexibility over their group program, all while protecting their data.
What inspired you to create this company?
Our founding team created the Air Travel Group, INC magazine’s fastest-growing travel company of 2017. The Air Travel Group was a
travel management company that specialized in booking group airfare, and we ultimately grew sick of
calling airlines to call and shop for airfare. Everything is available online,
and we thought it was time our clients could purchase group airfare online. So,
we decided to take action.
Give us your SWOT (Strengths, Weaknesses, Opportunities,
Threats) analysis of the company.
- Strengths: Our technology is built on a powerful new framework that
allows disconnected systems to interoperate seamlessly. Since each of our AI
agents evolves independently, every entity that owns an agent owns all their
data and can transact with other agents within our marketplace.
Since this is a new form of AI, and we are one of the only
companies in the United States that works exclusively within the group airfare arena, we
anticipate being first to market. This solution addresses a real need within
the airline industry, and it arrives at a time when airlines are looking for and
embracing new technologies.
- Weaknesses: We don’t have airline systems knowledge, which
means we have to rely on partnerships to model airline data schemes and
- Opportunities: There is currently no entity that is offering
the airlines the ability to automate their group programs and distribute group
contracts online. We anticipate being first to market.
- Threats: Airlines can develop their own group portals, as
Lufthansa has done. While this makes the distribution of group airfare easier,
it does not solve the main pain point. Unless there is a marketplace where
customers can shop (i.e., price compare) for group airfare, they will continue
to hold space on multiple carriers and cancel their contracts. An online portal
only addresses one half of the problem; Bacarai solves both sides of the
In addition, the problem, solution and technology all require
some education, since group airfare is such a niche market. We have to take the
time to explain some of the nuances of the booking process to investors and
sometimes even to the airline representatives themselves!
There are also some
people who don’t believe our AI can model more complex processes, like revenue
management, but this iteration of technology can model almost any process in
the world. Human nature still grapples with technology’s rapid advancement, but
we hope our demo (due out late this year) will reassure any skeptics.
What are the travel pain points you are trying to alleviate
from both the customer and the industry perspective?
Group airfare isn’t sold online. Can you think of anything
you have wanted to purchase that you had to place a call to buy? Customers of
group travel have a fragmented and time‐consuming shopping experience. They
have to call each airline (yes, on the phone) just to find out how much it will
cost to buy their product. If you had to do this every day, it might get a
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The pain points are even worse for airlines. Not only do
they have to operate a call center for one product, but it affects their
overall business. The lack of a central marketplace is
one reason why 50 to 70% of all group contracts are cancelled, which is
terrible for inventory management.
Additionally, this process equates to huge
opportunity costs. Airlines can’t exercise their ability to serve dynamic
pricing or upsell perks (like lounge access or seat upgrades) on their group
product, two initiatives that are a current focal point in the industry.
Obviously, both sides experience significant inefficiencies.
So you've got the product, now how will you get lots of
Our primary customers are our airline partners. Since we
have an intimate understanding of an airline’s pain points, we have developed
our solution to alleviate their biggest problems. Bacarai will reduce inventory
spoilage and provide alternate streams of revenue for airlines that are
currently nonexistent on the millions of group flights they sell.
Our hope is that once we accept one airline into our
marketplace, others will follow, since they will receive a competitive
advantage with online bookings. Once we have most airlines on-boarded into our
marketplace, duplicate bookings, spoilage and wasted hours on the phone will
be practically eliminated.
Bacarai is a rare solution because it truly does benefit
everybody in the industry. The more people that join our platform, the better
it will be for all.
Tell us what process you've gone through to establish a
genuine need for your company and the size of the addressable market.
Instead of establishing a need, we have identified a real
Group airfare accounts for over $20 billion in annual sales
in the U.S. alone. The current process for booking group airfare is tedious and
wasteful. Operators needing group space have to call each airline over the
phone to shop for prices, which takes up both parties’ time and resources. This
is an even worse process for the airlines, because as operators shop, they
“hold” inventory with each carrier - and then cancel the space they don’t need
days or months later. This creates inventory and revenue management problems
for airlines, who need every bit of revenue they can get.
Over 20 million people fly using group contracts each year,
and an online shopping portal (think the “Expedia” for group airfare) would
provide a more convenient shopping experience.
More importantly, our AI would eliminate duplicate
bookings - which would save airlines millions of dollars in lost revenue. Once
airlines join our marketplace, operators will be redirected to go online to
book flights, so our customer base will be built in, requiring no acquisition
on our end.
How and when will you make money?
We will have a working demo by the end of 2018 and a
prototype by early 2019.
The first iteration of our marketplace will consist of
airlines and group tour operators. Operators will pay a monthly subscription
fee to shop in our ecosystem and consumers will pay a minimal flat fee per
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Since our acquisition costs will be minimal, we anticipate generating
profits soon after opening our marketplace. To put it in perspective, an
airline like United sells over three million group tickets per year, which would
provide us with over $16 million in profit. If just 10% of the current travel
agent market joined our platform, we anticipate making $1.5 million per year.
What are the backgrounds and previous achievements of the
founding team, and why do you have what it takes to succeed with this business?
Our team has what we consider the one‐two punch. First‐hand
experience in the group travel industry and solid leadership skills.
Co‐founders Eric Peterson and Kenny Totten have already
built a successful company for group travel - winning the title of fastest-growing travel company on the INC magazine 500 list in 2017. Within the niche
market of group airfare, both understand the nuances of the aviation industry,
specifically when it comes to the group travel market.
In addition to business acumen and industry expertise, our
team’s prior leadership experience rounds out the company. Cait Busscher comes
from eight years with the Walt Disney Company. Her various roles included
operational management, training and development, and public affairs, which
she’ll use to develop company culture, promote Bacarai’s public image and
foster employee satisfaction.
What's been the most difficult part of founding the business
Waiting to get started! Our team had been working on Bacarai
for almost a year, and our idea seemed to outpace our timeline. We hadn’t heard
anybody else talk a group travel solution, and we knew the airline industry was
proactively seeking solutions to enhance the customer experience and boost
their profit margins - so the Bacarai solution was timely.
However, as is the case with startups, it can sometimes be a
waiting game. While we had had a lot of interest from some of the biggest names
in aviation, we needed a technical partnership with an airline in order to
model their processes and train our technology.
But, we are happy to announce, we recently agreed to work
with a major U.S. airline, and we can finally get started! After many meetings,
one forward‐thinking company has decided to allow us to train our AI within
their systems. After months of pitching and creating content, we have finally
started our journey. We know there will be other twists and turns along the
way, but it’s all part of the process. If you’ve ever started a company, you
will understand the dual emotions of excitement and frustration you might feel
at any given moment.
Generally, travel startups face a fairly tough time making
an impact ‐ so why are you going to be one of lucky ones?
Group airfare is a niche market and we are one of the few
companies working in this arena. This fact, combined with the exclusive use of
our patented self‐evolving AI technology, means we will be first to market with
The solution is also timely. Now, more than ever, customers
are demanding more from airlines while expecting to pay less. Airlines are
stretched thin and operating within very small profit margins, so the entire
industry is actively seeking solutions that will enhance their customer
experience and their bottom line. Our solution will do both and will arrive to
market at a time when the airline industry is embracing new technologies more
than ever before.
We do believe in the strength of our well‐rounded team - prior
success as a small business is a strong indicator of a startup’s future
success. Our technical team are leaders within the AI industry, and we possess
strong leadership skills to create a thriving company.
Finally, the underlying technology has far‐reaching
applications. We are starting with group airfare - it is in our wheelhouse, and
we can rely on our prior relationships; but our goal is to use our technology
for all areas within the group travel industry. Any process that can be
modeled can be managed by our AI technology and almost any travel provider can
join our online ecosystem. This means Bacarai has the ability to be supremely
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