Sailing Through The Storm: Here’s How COVID-19 Has Impacted Travel Startups in India

Sailing Through The Storm: Here’s How COVID-19 Has Impacted Travel Startups in India
Travel is one of the most lucrative sectors in the startup ecosystem , Photo Credit: Shutterstock

From initiating salary cuts to brainstorming new ideas to using their reserve funds, here’s how travel startups are dealing with the pandemic

Karan Kaushik
August 17 , 2020
09 Min Read

That the travel industry has been severely hit due to the Coronavirus pandemic, is something travel startups are finally coming to terms with. A report published by Praxis Global Alliance, a Gurugram-based management consulting firm, had estimated that the travel market would be worth $13.6 billion by 2021 (up from $5.71 billion in 2015). But then, the pandemic hit the world, eventually making its way to India, leaving the over 3,000 travel-tech startups in the country without business. Following the pandemic, Praxis conducted another survey in the last two weeks of March to understand its impact on Indian startups. The survey concluded that travel, tourism, hospitality and mobility will be the worst hit from the slowdown caused due to the pandemic in the first quarter of the financial year 2021. The most severely-impacted are smaller startups who have either run out of working capital or are having to reduce their workforce in order to survive.

Entrepreneur Vishwas Raj of Bengaluru-based Adventure Sindbad shares that he had to rent out his office space as a cost-cutting measure and every employee in his small travel startup has taken a salary cut. His startup is into adventure travel in the Himalayan regions across India, Nepal, and Bhutan. The company was only warming up for the season after a successful trip to Rishikesh when the pandemic happened. “We had to return money to a lot of our guests and cancel almost all our bookings," says Raj. The uncertainty surrounding travel and tourism has lead him to suspend operations and the entrepreneur believes that unless people are bold enough to be willing to travel, it’s going to be pretty tough for tour operators like him. 

What’s making things difficult for Raj’s startup is the compulsion to operate in remote hilly areas that don’t enjoy proximity with hospitals. “I don’t see adventure travel in remote areas for quite some time. We deal with different kinds of stakeholders like horsemen, last-mile staff, taxi drivers who are at risk of catching the virus from travellers and hence reluctant to offer their services currently,” informs Raj. This was the season for Ladakh but the union territory has stopped tourism, leaving Adventure Sindbad businessless.

 
 
 
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A post shared by AdventureSindbad.com (@adventure_sindbad) on Mar 5, 2019 at 2:40am PST

Another major issue that Raj is facing is the constant changing of rules by various state governments. Although there is fear in the air, Raj feels that people will soon start travelling and hopefully things will be back to the absolute normal by spring next year. “We are just waiting and watching for now,” he says. One of the emerging trends that the travel industry is witnessing is the cutting down of group size. “Most of the travel startups have cut down on the group size they take for trips and there will be a drastic change in group numbers in the time to come,” Raj says. 

Most startups were actually faring well before the pandemic, thanks to the winter and New Year season, and their reserves are now helping them to sustain themselves. For Diwakar Basnet, who started Invacations, a Gangtok-based educational travel startup, last year, his company’s reserve funds have let him retain his staff and keep the show running. Basnet comes from the education sector and used to organise school trips for students in Sikkim. Soon, he realised the impact created on students through such engagements, which lead him to start his own company, which focusses on student learning programmes. Basnet’s startup was doing extremely well before the pandemic. “We did more than Rs 50 lakh of billing in the first five months and we took 35 schools from Sikkim on trips to Gujarat, Kerala, Delhi, and other places. We were also planning to expand to Nepal but the plan got derailed,” says Basnet. 

One of the biggest lessons for Basnet during the pandemic has been that of building the idea of virtual tourism through online platforms. “We are planning to showcase the beauty of the entire Northeast virtually and we are seriously exploring the idea of online-offline interphase now,” he says, “Likewise, we have been working on online quiz events for the Northeast and some other projects so we can be virtually present and relevant for our potential clients.” Basnet also foresees a lot of intra-state travel happening as the pandemic has given everyone an opportunity to appreciate their own region or state. “Till now, we had been focussing on inter-state trips but now we are exploring the idea of intra-state travel because we think that students need to know their own state also,” he adds.

Sikkim is relatively safe and Basnet is trying to work out weekend trips with schools. “We are trying to pitch schools the idea of letting students learn through short trips even if they are not attending school,” says Basnet. His company was actually getting ready for the first such trip in the first week of August but the plan had to be postponed because of heavy rainfall.

Krishna Kumar with his team at Travelspok

Thiruvananthapuram-based Travelspoc had to cancel as many as 5,000 bookings for April and May. The AI-driven platform allows tour operators from across the world to come and sell their packages under their own brand identity. “It’s basically like Amazon for tour operators and travel agents. Our AI model understands the travel patterns of travellers and offers them suitable packages. We have 900 tour operators and 1,14,000 travellers registered in our system,” informs Krishna Kumar, the company’s founder. Things were going pretty smoothly for the startup and signing of contracts with companies in Singapore, Qatar and US were also in the works but suddenly everything came to a standstill.

When the lockdown was imposed, Kumar didn’t want his customers to lose money. The first thing his company did was contacting airlines to initiate a refund or reimbursement. “We were able to refund most of the bookings and for the ones we couldn’t initiate a refund, we generated a coupon code which they’ll be able to use on their next trip,” says Kumar, “Technically it’s a loss of revenue for us but at the same time, customer satisfaction is what we gained, which will eventually help us.”  

Travelspoc has neither cut salaries nor reduced their staff of 14, thanks to several revenue-generating steps. From developing a COVID-tracking tool called Kavach for the Red Cross Society to launching special quarantine packages for travellers returning to India under the Vande Bharat Mission, the company has kept the show running. “We have partnered with leading hotel chains like Taj, Le Meridien, Hilton, and Oyo Rooms for our quarantine packages of 7 to 28 days,” says Kumar. The company has also partnered with a national park and given them a replica of their web portal which the national park can implement on its own platform to sell tickets.

Then there’s the Five Mile Tourism Plan, which allows people to locate unexplored places within a distance of five miles from them through Travelspoc. “We are putting this information on our website about nearby places and earning revenue by getting local agents to arrange these trips for our customers,” Kumar shares. “These are little steps we are taking to build revenue, which is the key thing,” he adds. Kumar, who thinks that domestic and religious tourism will be key in the coming months, also tells us that his company is trying to collaborate with other travel startups so that things could get easier for the entire industry.

Engineer-turned entrepreneur Jitesh Yadav, who owns the North India-based Trrivel, had sensed that the pandemic will impact business since December 2019, when the first few cases were being reported from the world. Yadav’s startup is into fixed departure trips and also runs a chain of hostels in the Parvati Valley. They operate in Delhi, Chandigarh, Dehradun and Jalandhar, and organise trips for university students. The company had catered to 2,000 customers in December 2018 but that dropped to 900 customers in December 2019, thanks to the news about the virus spreading and people being over-cautious. Since the lockdown, Trrivel hasn’t got any customers. 

Jitesh Yadav (extreme left) with a team of college students during a trip organised by his startup Trrivel

Yadav’s company was enjoying high profit margins and great revenues with the conventional business model. When the pandemic happened, they had to let the engineer in them take the front seat. “We are using our technical expertise to create an app that will prevent travellers from being cheated by fraudsters while opting for adventure activities and special experiences,” shares Yadav. The app will also tell travellers about the number of corona cases in a particular area or city they are travelling to. Yadav’s company is currently bootstrapped and using their savings to work on the app and keep the company running.

The startup was also able to generate small revenues during the lockdown. They helped factory owners in Ludhiana send their migrant labourers to their respective states by providing them buses and taxis. They are also providing taxis to emergency travellers for travelling to the nearest airport. During the lockdown, Trrivel also surveyed 1,500 to 2,000 people to find out the emerging trends in travel. “95 percent of people between the age of 18 to 32 want to travel when the pandemic is over and the app that we are building will hopefully allow them to have a safer experience,” says the young lad, who is also doing a full-time job to keep the money coming. 

 


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That's quite interesting! I enjoyed the read Here’s an exclusive interview with Matteo Rizzi about how tech is important to any startup for its survival You should check it out! engaticom/blog/survival-tech-startups-matteo-rizzi
Brad Mathias August 29 , 2020

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