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Wednesday, 25 September, 2019, 16 : 23 PM [IST]

Eastbound Group: Geared to grab the pole position

Started as a boutique destination management company for India by three partners – Prrithviraj Singh, Manish Pratik and Amit Kishore – with wide-ranging expertise in the domain of travel in 2006, Delhi-based Eastbound Group has diversified into various verticals of travel business over the last decade, and a half to become a highly professional travel consortium with strong interests and stake in domestic, inbound, outbound, MICE, events and representation business. In its exciting journey, Eastbound Group followed both organic and inorganic growth paths to claim their enviable position as a key player. Well-poised as a leading player in the industry, the founding partners of the company spared time to share with P Krishna Kumar their views, sentiments and most importantly their strategies to reach the targeted growth of INR 500 crore by 2021.

Q Could you briefly share the journey of Eastbound as a travel company?
Prrithviraj Singh: Setting out in 2006, we were focussed on establishing reach for the first 8 to 10 years. Our efforts were directed at the English speaking hi-end market and that's where our success came from. In the initial years, we directed all our energies towards building strong relationships with our clients, industry stakeholders and our employees. Our approach was two-pronged - to offer a differentiated experiential product range and maintain the highest quality of service.

We then embarked on the second phase of our growth in the sub-continent by opening our own companies in Sri Lanka, Nepal, Bhutan, and later in the Middle East in Dubai. Our most recent office has opened in Vietnam.

In the next phase, we expanded into different segments of travel. We launched our dedicated MICE and social events brand named CHIME. The other development was our foray into

the representation business - to represent, advice and consult overseas tourism boards. Today, we represent 8 to 10 tourism boards globally. Subsequently, we looked at different segments of the inbound business and launched two more dedicated brands Eastbound Discoveries and 2HUB, and later acquired Distinct Destinations. We are today a group of companies all focused at the tourism industry with strength of 400+ employees working across multiple facilities through the globe.

Q Amidst tough competition from both big players and lot of smaller entities, how did you manage to create your own niche in the market?
Manish Pratik: When we set up the business in 2006, the market was already very saturated. Most companies had well-established relationships in the traditional European market, so our challenge was to create our own niche in an already settled kind of market. So, we decided to go and look for newer horizons. We were the earliest companies to go beyond Europe to US and Latin America.

This was the time when people were moving away from traditional group holidays and charters. So we channelised our efforts towards designing experiences that were exclusive, experiential, authentic and far from run-of-the-mill. Our foray in educational travel was received extremely well. Through our research and innovation, we began creating thematic tours that were extremely select and unique.

Although we didn't want to be a travel factory like some of the larger companies, we set out to position ourselves as a company which was not very large, but had the strengths of a large company — owner-driven with a well-defined professional structure. I believe this is what defined our differentiation.

Q How did you evolve from a boutique DMC to a full-fledged travel player?
Amit Kishore: Today destination management, albeit an integral part of our overall business, is just one part. While Eastbound and Distinct Destinations offer boutique experiential travel, Distinct Destinations and Eastbound Discoveries are focused at value-based travel. Each entity works independently from different offices and geographies with a common vision to offer impeccable services to our customers.

We have also acquired a substantial market share in the B2B domestic network. Domestic travel in India is 15 times more than inbound traffic. To address this demand there's 2HUB which extends global products to agents in Tier-II and III cities by offering turnkey solutions for booking hotels and attractions, end to end event management, domestic and outbound tours and supplementary travel services.

Apart from this, our investment in Byond.travel focuses at the niche outbound group travel segment, while CHIME is our events and corporate travel vertical.

Propelled by this diverse bouquet of offerings, we are excited to be within touching reach of our immediate goalpost of 500 crore by 2020.

Q What is Eastbound Group's outlook to acquisitions to attain faster growth and scale?
Amit: Acquisitions have become a reality now due to an increased trust in collaborative development. The cost of servicing the client is going up and margins are depleting. In such a scenario it is noticed that businesses with a structured way of operating are the ones booming. Companies have to innovate and find ways to remain lean, cost-efficient and nimble in the business. Also, adaptation to technology is important. Those who remain reluctant will either evaporate or possibly get acquired.

As far as Eastbound Group is concerned, we continue to be a debt-free company from the start with no external investors. We have a clear ownership structure and our various internal systems like HR, contracting, operations, finance are shared among the group. This helps us keep our operations cost down giving us the opportunity to go out and acquire relevant businesses ascertaining scale. Distinct Destinations was such an acquisition.

Acquisitions are certainly going to happen more and more. We see a lot of small and medium companies getting acquired or struggling to remain in business. Getting right vendor partners, contracts, etc. in the new market scenario will be challenging for smaller companies as steady consolidation is happening at the tour operator level in Europe and other geographies.

We are aggressively looking at more acquisitions. We are in talks with couple of big players in India and are working towards some major developments in this pursuit.

Q How are the travel market dynamics changing? Where do you see inbound story heading for India?
Manish: The numbers that are being put out may not be entirely accurate. A large chunk of it comes from Sri Lanka or Bangladesh which does not add too much commercial value to us or the overall economy. The traditional market which used to travel with a DMC is gradually downsizing.

Fortunately for us, we have been innovative in our approach from the beginning and therefore continue to register a consistent growth of 20% on average, except for couple of years in between when the industry was affected because of some unavoidable incidents.

Our penetration into newer markets and consistency of services to our clients has played a pivotal role in positioning us as a single window service provider for the whole South Asia region.

Q In the current scenario which is full of uncertainties, what are the bright spots that you see for travel businesses?
Prrithiviraj: When we looked at some segments of our business last year, 65% share was international and the larger 35% was domestic. But the reverse is happening now with 65% domestic & outbound and 35% inbound. That indicates that the corporate business is getting stronger with a large volume of events being organised. Government spending is also continuing to grow, further indicating that the event segment is highly promising. Wedding is also a large segment. We are rightly positioned to tap both these demands with our brand CHIME. We do an average of 10 to 12 large weddings in a year and this is expected to grow further.

Although our pulse is our inbound business, we expect our numbers to come from B2B domestic travel which is expected to explode with infrastructure getting better and better not only in the metros but also mini-metros. People in these smaller towns and cities have high aspirations to explore destinations. We are equipped to cater to any kind of demand that comes from a small city agent, in terms of airline tickets, international packages, events, weddings, etc. This shall drive our growth going forward.

Q As a B2B travel company, what is your focus as far as technology is concerned?
Amit: Investment in technology is a key in a travel business like ours. Technology adoption is important to build efficiencies and contain the cost of operating the business. As an organisation not only do we embrace technology, but we also keep a keen eye out for any advancements that we can imbibe. In that context, we are in advanced stages of acquiring a technology company which will eventually become our in-house technology support system.

Q How is the travel representation business evolving and what are the trends that you see?
Amit: Like the DMC business and B2B business, the fundamentals are changing rapidly in travel representation also. Earlier representation companies used to work as a one-stop shop for marketing, sales, PR, etc., that is changing with dedicated domain experts taking over each vertical. Sales are going to be more measurable. Companies which have a larger footprint in smaller cities with language expertise to offer services in local languages will be the only ones to survive in the business of representation going forward.

krishna.kumar@saffronsynergies.in
 
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