With growing competition in the tours and activities space, not least with the launch of products like Google Trips, can smaller fry really compete? Pamela Whitby reports as news emerges that Google has just been slapped with a hefty fine
When Ceetiz, a French-based OTA for tours and activities, launched back in 2011, the online tours and activities’ market was pretty immature.
As for many startups, in the early days Google had its uses. With the help by Google Ad Words, the founders of Ceetiz, COO Damien Bellon and CEO Eric Blanc, were quickly able to build volume and become a credible online partner for providers of tours and activities.
Today the firm has notched up 8,000 products in 300 destinations, but the competition is hotting up and numerous companies have entered the fray. Among those are marketplaces for tours and activities like Viator and GetyourGuide. At the same time, firms like Airbnb and booking.com have launched products like Trips and Experiences and, of course, let’s not forget Google Trips!
“It’s unbelievable how people are considering online tours & activities platforms compared to 2012,” says Bellon who, like his co-founder, hails from a background in hospitality.
Still, it is fair to say that Ceetiz certainly benefited from its early relationship with Google. But it is also fair to say that as the market becomes more mature, maintaining the right balance between Google delivering value and Google becoming a competitor is no mean feat.
It is always very tricky to talk about Google if you are a start up, even if you are not really a start up anymore
“It is always very tricky to talk about Google if you are a start up, even if you are not really a start up anymore,” Bellon admits.
As Momondo CEO Hugo Burge articulated at the recent EyeforTravel European Summit, “dependency on Google is not a great place to be when it starts to compete with you”.
Industry on alert
Google’s move up the trip-planning funnel is increasingly causing consternation in the travel industry. Speaking at EyeforTravel’s Europe Summit Rod Cuthbert, executive chairman of multimodal travel company Rome2Rio, said Google posed the “biggest existential threat to the travel industry” today, and its moves were having a “chilling impact on innovation”.
Cuthbert, who founded Viator - a competitor today of Ceetiz in the tours and activities space - said that he could not have had the success he’d had with Viator, which was acquired by TripAdvisor in 2014 for $200m, in today’s environment.
However, today there was some good news for companies feeling the heat from Google. According to the BBC, the European Commission (EC) has slapped a hefty €2.43bn fine - its biggest ever- on the search giant for promoting its own shopping comparison service at the top of search results. Admittedly, this fine relates to Google's activity in the retail space but perhaps now is the time for the travel industry to really start lobbying for fairer practices from a company that has a monopoly on search.
In the meantime, however, it is business as usual for Ceetiz, which is watching Google's move up the trip-planning funnel closely.
“Of course, we are paying close attention to what Google Trips is doing but it would be very foolish for us to compete directly in this very focused segment,” he says, adding that if you are talking about Airbnb or booking.com it would also be foolish to say they aren’t a threat. “Come on,” says Bellon, “let’s be humble."
We are paying close attention to Google Trips are doing but it would be very foolish for us to compete directly in this very focused segment
After all, Google has unlimited resources for IT development and communication not to mention a worldwide platform aggregating vast quantities of data that it can use to deliver the ultimate user experience.
5 Ways to take on Google
So time then to throw in the towel? No, says Bellon, but you do need to find another way to work harder and smarter to offer a highly differentiated core product with multiple revenue streams and, importantly, one that doesn’t solely focus on a B2C model. On that note, here are five ways that Ceetiz is raising its game in this competitive market.
1. Curation is the name of the game
Ceetiz is an OTA, a “curation platform and not a market place”. This is the main differentiator between firms like GetyourGuide and Viator and is very important when you are competing against Google, says Bellon.
In other words, all content on Ceetiz is edited and integrated by the in-house team. So, unlike Airbnb, providers of tours and activities cannot load their own content onto the Ceetiz platform.
“We carefully source all our tours and activities. Content and descriptions are managed by local teams and translations are done in house,” Bellon explains. “And being an OTA give it us more legal status too.”
2. A strong but clearly differentiated core business focused on brand, product and community
At Ceetiz the focus is especially on brand, product and community management. Like all the main players, a big part of the business is offering the best and biggest tours and activities in destination at the same price.
However, since Ceetiz has travel agent status, it can also go a step further to develop unique tours & activities with a difference,” says Bellon.
For example, as a French company a family may use Ceetiz to book a major activity on a trip to say London or New York. However, there are plenty of other weekends in a year where they may like to do something in France. Ceetiz aims to make “very special offers” that could include an experience for each individual, or the whole family - everything from perfume making to rafting, electric biking and more.
3. Concierge services, local flavour and offline value
With 8,000 tours in 300 destinations, Ceetiz is a global player, but it is also a French company with a strong core audience at home. For these customers, it believes it can provide additional, focused in-destination value, and possibly even offline services. Take a French traveller going to New York. Yes, they may well want to book their Broadway show two weeks before arrival, but there are many other tours and activities on offer in destination, that may, for example, be weather dependent. Customers may then require human services – such as somebody who speaks their language, and can help them book that in-destination local trip. “If you focus very closely on what your own clients want then you can play against Google,” says Bellon.
If you focus very closely on what your own clients want then you can play against Google
4. Partnership power
Recognising that if you are up against Google, then the B2C model is unsustainable, Ceetiz has looked to partnerships for success. One example is a mutually beneficial partnership with the Oxbow Paddle Company; Oxbow gains visibility for its paddleboards, while Ceetiz develops its funnel by offering a wider range of sports and leisure activities. Because of its travel agent status it can curate, for example, a weekend away including accommodation, a paddle-boarding course and yoga.
The firm has also formed a strong partnership with Comité Régional du Tourisme de la Côte d’Azur, which has a large portfolio of local providers of tours, activities and experiences on the French Rivieria.
“We thought, let’s try to do something smart here. We are private company and you are public agency. Let’s try to help each other to aggregate a very large offering to the benefit of both our sets of clients,” says Bellon.
Ceetiz also understands that the much talked about goal right now is, in the jargon of the day, to deliver ‘value-added, seamless, personalised’ travel experience to customers. B2B2C partnerships with companies like AirFrance, and Mister Fly mean that, for example, a company selling air tickets or room nights, can also have a tours and activities offering. In these cases, a co-branded website means that the Ceetiz brand remains highly visible.
As the competition continues to intensify, Ceetiz recognised that even the B2C and B2B2C model is not enough. As such the firm has invested in technology to ensure that it’s tours and activities can easily be integrated into packages sold by travel agent networks, using in house APIs. Although these are white label partnerships, the Ceetiz logo is visible right at the end of the booking process. The firm was unable to mention any white label deals because this is a “very competitive market”.
5. Margin, margin, margin
That the competition is tough and intensifying is no understatement. Ceetiz is therefore working hard to ensure that it’s not entirely dependent on Google. It’s not there yet, but the aim is to use Google to drive more volume, rather than have Google undermine its business. Rightly or wrongly, Bellon holds the view that although it is changing Google’s shift from its lucrative advertising model to a travel merchant model is some way off. And for this reason, he believes that even in a very tough environment travel merchants like Ceetiz still have room to innovate and grow.
Though it isn’t easy, the signs are promising for Ceetiz, which took $3m in its first round of private equity funding in 2014. For the two founders, who come from a background in hospitality at firms that include Friendly Rentals, Pierre et Vacances Center Parcs Group and Thomas Cook, investment in technology has been crucial, as has their focus on “margin, margin, margin”.
Let’s see what happens next.
To hear more about the Ceetiz business model, join us in Amsterdam (Nov 29-30) where COO Damien Bellon will be speaking on a panel titled: David and Goliath - Challenge Monopolies with Digital Partnerships