Africabookings wishes to become the leading hotel B2B hotel central reservation system (CRS) for Africa, starting with sub-Saharan countries.
It acts as a wholesaler, via its site africabookingscrs.com, and it has already contracted inventory for 500 African hotels and begun connecting that inventory to bricks-and-mortar and online travel agencies.
With offices based out of Zimbabwe, Africa, and the UK, the startup has orchestrated a seed fund round from Travel Startups Incubator, an investment group of veteran travel executives led by Matt Zito.
The company says that, outside of some pockets, like South Africa, Egypt, and Nigeria, it is difficult to make comprehensive bookings across Africa. No one has yet signed up a comprehensive mix and broad stock of hotels onto one platform that can then be redistributed.
Africabookings hopes to act as that platform.
A Q&A with CEO Bruce Tapping:
Tell us how you founded the company, why and what made you decide to jump in and create the business.
Africabookings is a UK incorporated company. It was founded on three premises:
i) Across Africa there is a large, and an inevitably growing, market for hotels and lodges that want to get their room availability distributed online.
ii) Across Africa there is a large, and an inevitably growing, market for travel agents who want to have instant online access to booking these African hotels/lodges.
iii) As Africa's star rises, there is inevitable further growth in demand for African hotel and lodge inventory from both consumer and business facing hotel re-sellers (Consumer OTAs and B2B bedbank/wholesale suppliers)
Size of the team, names of founders, management roles and key personnel?
On the ground in Africa, dealing with the Hotel inventory and Sales we have two shareholders (Bruce Tapping, CEO, and Luke Brown). In the UK we have one shareholder (Adrian Lunga, CTO) handling the technical side of things.
We also have two advisors (Jan Passoff and Bart Tompkins) helping/advising from their respective overseas positions in Shanghai and Hong Kong.
Funding arrangements?
The current shareholders invested in an early seed round and we have used this to position ourselves in the market, directly contract hotels to our website and service travel agents with our technology.
We want to continue to drum up investment to:
i) Complete technical developments
ii) Initiate and set up our 3 targeted revenue streams.
Estimation of market size?
Our research put the market size for hotel bookings, of just three core countries to grow to $5 billion by 2017. We therefore estimate the market for the Africa as a whole to grow to over $14 billion by 2017.
Competition?
We are not going to create an OTA. Are competition is on the B2B side.
Our strategy is to look at a B2B model where we concentrate on the long tail of independents and sign these up for distribution. We therefore aim to partner with our competitors as well as create our own unique revenue streams.
Priceline Group’s Booking Suite as well as the major OTAs are all competition in terms of hotel bookings.
Revenue model and strategy for profitability?
We target 3 revenue streams:
i) A Reservation Management Tool that allows independent hotels to manage their inventory and get online for distribution
ii) Direct wholesale to travel agents
iii) XML integration (outbound) for our unique inventory.
Our seed capital requirements will allows us to complete the technical build meaning we can quickly start to concentrate on just scaling the hotel inventory and these three revenue streams.
What problem does the business solve?
Africa’s star is undoubtedly rising. As it does, and as covered in the first question, we see three problems being solved:
Independent hotels and lodges wanting to get online, but not having the tools to do so.
Travel agents, feeling the pressure of an online world, needing real time access to African inventory. Increased demand from global resellers and wholesalers for African inventory.
How did the initial idea evolve and were there changes/any pivots along the way in the early stages?
The initial idea was to set up a team to directly contract hotels and in doing so understand better their requirements. This is what we have achieved.
We have not pivoted but we have clarified and focused exactly what our revenue streams will be based on what we have learnt from our hotel partners.
Why should people or companies use the business?
As a B2B business, we are providing a service that is required by both our hotel partners and our distribution partners.
Hotels will use the service for:
i) Getting inventory online
ii) Getting inventory distributed
Distribution partners will use the service to get real time access to comprehensive accurate African inventory.
What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?
We have a team on the ground across Africa signing up inventory and up-selling to hotels. We have a separate team selling to the travel agents both on the ground and at trade shows.
Our UK technical team will set up outbound XML connections.
These physical direct strategies will be complimented by social media awareness marketing targeting agents and hotels alike.
Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?
We see our technical build complete in months not years. We see two of our revenue streams in place within a year.
We see initial outbound XML connections in place within 12-18 months and we then see ourselves scaling all three revenue streams and the numbers of hotels being represented by us.
We see us cementing our positions as the Africa experts. Our challenges are not different from many start ups but we know we can overcome whatever obstacles present themselves.
What is wrong with the travel, tourism and hospitality industry that it requires a startup like yours to help it out?
The global tourism industry has evolved enormously over the past 10-15 years.
We have learnt from this and see Africa being in a position where its tourism industry is behind the rest of the worlds, but technology allows Africa to leapfrog some of the stages the rest of the world went through in getting its hotels online and distributed.
What other technology company (in or outside of travel) would you consider yourselves most closely aligned to in terms of culture and style... and why?
I like what I see Busy Rooms is doing. I feel their ethos in terms of wanting to get 2nd and 3rd tier global hotels distributed and I like their means of doing so.
Which company would be the best fit to buy your startup?
We all know how competitive and intertwined the global tourism industry is. I feel anyone who wants to increase market share in Africa in hotel distribution would be a potential buyer – both B2B and B2C companies.
Interestingly, I see a very large opportunity for large Chinese players to be interested as both distribution partners and buyers, as the Sino Africa relationship is only going to increase dramatically.
xvii) Describe your startup in three words?
African Hotels B2B.
Tnooz view:
We agree. Busy Rooms, based out of Malta, is a compelling leader in the field that Africabookings wants to dominate on one continent. There are other competitors, too, that have a lot of experience in this vertical.
We worry also about how Africa is mind-blowingly huge as a region to target. The differences, market to market, can be extraordinary. This keeps the bar high for Africabookings.
That said, we wish it well, and we're eager to see how it executes on its vision.