Jovago, the Rocket Internet-backed online hotel booking portal, set up shop in Pakistan in February last year. The startup took a while to streamline operations, preferring to test the waters instead of jumping in with both feet. The company was originally built to serve the African market, but Pakistan was the first country where Jovago chose to expand into. Now, after more than a year of operations, Jovago is looking to further embed itself into the minds of Pakistani consumers.
The tourism industry of Pakistan ripples with potential. In 2009, the World Economic Forum’s travel and tourism competitiveness report ranked Pakistan as one of the top 25 percent tourist destinations for world heritage sites, recognizing the six UNESCO-certified world heritage locations and confirming its rich historical and cultural lineage.
However, in the same report, Pakistan ranks 122 out of 140 countries in its travel and tourism competitiveness index. The report points to an abysmal state of policy rules and regulations, as well as substandard travel and tourism facilities. Several years of violent terrorism, insurgencies, high-profile kidnappings, and travel advisories have also contrived to keep foreign tourists at bay. A shame, given the sheer scale of geographical diversity and natural phenomenon at display in the country.
Lack of transparency presents an opportunity
Despite the negative perceptions, antiquated facilities, and poor standard of information, domestic tourism in Pakistan continues to make steady growth. For now, this is the market that Jovago aims to capture.
Country manager for Jovago Pakistan Nadine Malik states that they initially experienced a lot of traction, despite minimal marketing spend. This initial exuberance was instrumental in convincing Rocket Internet to establish a firm presence in the country.
“In the first six months of our operation we only had about 50 hotels in our database and were not engaging in extensive marketing efforts,” Malik tells Tech in Asia. “Despite this, our bookings kept increasing on a monthly basis, and we became convinced that we had a real game-changer on our hands.”
The biggest problem faced by domestic travelers is that Pakistan’s tourism industry is scattered, with the most beautiful locations also being the most remote and inaccessible. The northern parts of the country features lush green valleys, rivers, and streams, although they are situated in some of the highest mountains in the world. Similarly, the nation’s most pristine beaches are found mainly in the southwest region, although this area is also the most sparsely populated in Pakistan.
Jovago’s value proposition sits in aggregating all the rental properties available, building a repository of hotels and guest houses on a scale that has never been attempted before. As network infrastructure outside urban and semi-urban areas is poor, there are few ways to collate information and build a mechanism for users to access. Hence, potential travelers are reliant on referrals from friends, or having to pay exorbitant rates through travel agents.
This specific lack of transparency is where Jovago feels it can significantly disrupt the travel industry. “Travelers prioritize comfort and ease, and usually want to sift through hotels by ranking them on factors such as pricing, location, amenities, and service quality levels,” says Malik. “Previously, the technology did not exist for them to do so, but we are working towards providing it and ending the traditional dominance of travel agencies.”
However, building this database is certainly no easy task. The remoteness of Pakistan’s major tourist destinations also means that traveling to those locations is time-consuming, and sometimes fraught with risk due to poor infrastructure. Nonetheless, Jovago’s business development team is constantly on the move to sign up new hotels, take pictures of the properties, and even track GPS coordinates so that users can easily locate their hotels.
In the absence of a centralized directory, the team relies on information gleaned from sources such as bus conductors, taxi drivers, and even the local government to establish networks with new properties in a relentless effort to expand the database. It is clear that significant amounts of money and resources are being invested to build the ecosystem, but Malik believes that the effort will ultimately pay off.
“Pakistan is an underserved market, with high potential for growth and scale,” says Malik. “The inventory of hotels that Jovago has will soon become an important repository of information and help drive growth in the sector.”
Overwhelming the competition
The ranks of hotels on Jovago are determined by a complex algorithm that is based on reviews, number of bookings, quality of content, and pricing. It also seems as if the startup is working towards establishing credibility based on a community review management system. The algorithm is refreshed every two to three days so that the quality of listings is maintained and the more popular hotels appear first in search queries.
For Malik, speed of execution is key. With more than a thousand hotels, and several hundred more in the pipeline, Jovago isn’t necessarily restricting its target audience to the 20 million internet users in Pakistan. It aims to transform itself into a hybrid catalogue service. This means any user wishing to make a travel booking can simply call a dedicated helpline. A human agent on the other end will help users navigate options based on their preference.
The factor working in favor of Jovago, and what very well may determine its future success, is the lack of a competitive landscape. While there are some travel websites currently operating in Pakistan, they mainly focus on offering all-inclusive package deals, where people can buy transportation, accommodation, and tour guides, all in one bundle offer. The depth of information and flexibility offered by Jovago has yet to be matched by a significant player, and when you have Rocket Internet as your financier, you can be sure of some very aggressive tactics to trump competition.