Online hotel booking website Jovago does not expect high profitability in first five years. PHOTO: EXPRESS
Pakistan’s poor security situation may have held the country’s tourism industry hostage but there are signs that the sector is picking up, and this is what seems to be driving the optimism of Jovago, a hotel and vacation booking startup, which is betting on local tourism.
A subsidiary of Germany’s Rocket Internet, Jovago launched its operations in Pakistan only a year ago – in April, 2014. It now boasts 40 employees and a network of 2,000 hotels from 150 cities registered on its website.
Read: Promoting tourism: First Pakistan Mountain Film Festival underway
“We have witnessed up to 40% month-on-month growth in the number of bookings on our website,” Jovago Global CEO Paul Midy told The Express Tribune in his maiden visit to the country last week.
“We strongly feel that local tourism is growing in Pakistan,” said Midy, referring to statistics compiled by Jovago’s Pakistan team. However, he refused to share any financial details. Midy added there are even signs – though very small – that diplomats, who used to be contained to their enclaves, are travelling to different cities of Pakistan.
Like every other venture of Rocket Internet, Jovago is looking to gain an early footprint in the country’s ecommerce market set to take off with the rollout of mobile broadband.
Explaining the company’s strategy, the Frenchman said they look at the potential of a market before entering and Pakistan is certainly a big market – the country is home to the world’s sixth largest population but remains at an early stage of internet growth with its 17 million broadband subscribers as of April, 2015.
“We don’t expect to build up high profitability at least in the first five years,” said Midy, adding that they bet on the country’s economic growth and internet penetration keeping a long-term perspective.
“We would like to invest in a country that is at an early stage of internet growth, just like Pakistan,” he said. “This is the stage (initiation) where people make online purchases the most.”
“We want to be the number one hotel booking site in Pakistan.”
The Columbia University graduate says there is already a huge market in Pakistan, which is offline. There are a lot of people who are traveling across the country and visiting tourist spots but at the same time want affordable hotels. “What we are trying to do is bring these people online.”
Besides uploading pictures of listed hotels and their locations, Jovago also runs a blog to promote local tourism, which was severely disrupted because of the poor security situation. For example, nine foreign tourists were killed in June 2013, after terrorists attacked the base camp of Nanga Parbat – one of the world’s highest mountains located in Gilgit-Baltistan.
Incidents such as that at Nanga Parbat prove to be fatal for the country’s tourism sector and even local travellers refrain from visiting the troubled areas – no wonder why Islamabad is ranked low in the World Economic Forum’s Travel and Tourism Competitiveness Index (TTC1) 2015.
Among 141 countries, Pakistan ranks low at 125 (global) and 21st in the South-East and Southern Asia on the WEF’s TTCI – two points above Bangladesh and five points below Ghana.
Acknowledging the impact of terrorism and poor law and order, Midy said the business certainly slows down as a result of bad news. However, he said it picks up again in a few weeks to reach normalcy.
There is little to no information on how many foreigners are traveling to Pakistan but local tourism has picked up, according to Midy – and that is why they are focusing more on the locals.
Read: Pakistan ranks 122 out of 140 countries in Travel, Tourism Competitiveness report
However, security is not the only challenge facing Jovago. Educating owners of small hotels on hygiene, customer care and quality of service is an issue as well. Lack of online payments is another challenge as more than 80% people do not trust an online system and pay at hotels only.
“We try to make sure customers and hotels remain bound to the contract,” said Midy, adding that their team physically visits every place to verify the details and make several phone calls to supervise the entire transaction.
However, the most bookings are still for Karachi, Lahore and Islamabad, which is why they are promoting local tourism.
“There are a lot of places in Pakistan that are not known to its own citizens, which need to be promoted,” said Midy.
the writer is a staff correspondent
Published in The Express Tribune, July 6th, 2015.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
COMMENTS (1)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ