Online travel is becoming increasingly straight-laced and predictable. But not always. For here is the story of a company run out of Thailand with a CEO based in Australia that claims to own and operate the most popular airfare search site in Russia. Huh? JetRadar, which is now moving into hotel metasearch, is truly a one-off.
JetRadar’s main property is Aviasales.ru – now getting 2.5m visits a month – which was started as airfare blog by founder Konstantin Kalinov, who moved to Thailand from Russia for the weather and lifestyle in late 2007.
CEO Max Kraynov, who lives in Sydney, takes up the story.
‘His travel blog on cheap airfares to warm countries (Thailand, Dominicana, Indonesia etc) found a very strong following,” Mr Kraynov said.
“In fact, the AdSense ad placed on his blog and a couple of occasional advertising gigs were able to sustain a decent lifestyle.
The real catalyst for the business happened the following year when Russian airfare distribution was liberalised, allowing sale of e-tickets.
“Immediately a number of offline agencies created their online subsidiary, but it was the newly created OTAs that stole the thunder,” Mr Kraynov said.
“Aviasales.ru (as the blog was called) was able to capitalize on the newly ignited interest of Russians with credit cards to travel by connecting to multiple OTAs.”
It got paid per acquisition rather than by click and business went gang busters.
By 2011 the company employed 10 staff and was profitable but had reached a fork in the road.
Founder Konstantin decided to up the ante, stepping aside as leader, becoming EVP of Products, and installing an executive team (CEO Kraynov and CTO Boris Kaplunovsky) to accelerate growth.
The company also reincorporated in Hong Kong under the name of JetRadar.
Search advertising was already getting super-expensive so a decision was made to use affiliate marketing as the major accelerant.
The strategy has worked. JetRadar’s 10,000 registered affiliates already account for around 20% of revenue and about 22% of bookings.
“The affiliate program is something we have high hopes for and are looking to make a bigger push for it in certain markets, including UK and Australia.”
Mobile has also been a focus for JetRadar, which now has an in-house development team sale after buying mobile studio, CleverPumpkin, which created the Aviasales.ru iOS app.
Mr Kraynov said the mobile channel now accounts for 19% of all bookings, about 85% of which come through Apple products.
He said hotels metasearch is the next growth focus for Jetradar, which now has 60 staff – a 600% increase in just two years.
“In August 2012 a 3-person hotel metasearch startup BookMyBest called asking for an angel investment into their product,” Mr Kraynov said.
“They had a working prototype and a decent understanding of the hotels business; they were probably 6-9 months ahead of JetRadar in their thinking.
“”The entire team and their prototype were acquired, relocated to JetRadar’s Thai office and were given all the love and resources they needed to continue working on the full-scale product.
“The hotel metasearch product was launched in Russia in March 2013 under the name of HotelLook.ru and is currently being adapted to the Western public’s tastes on HotelLook.com.”
Looking ahead, Mr Kraynov said JetRadar is looking to grow via:
- Country expansion: “JetRadar is currently present in the US, UK, Australia, Germany and Russia. Some other countries are in development. JetRadar pulled out of China late last year because the preferred CPA (Cost Per Acquisition) model simply didn’t work in China or was unprofitable whenever it worked.
- Number of products. “Hence the hotels metasearch. The management team is trying to be careful and not get possessed by the ‘there are simply higher margins in hotels distribution’ hype, but there’s money on the table, and JetRadar must at least make an attempt to grab whatever it can reach.
- New distribution channels. “That’s where the mobile app and the affiliate program come into play.”
“We are eager to work with airlines and hotel chains directly to give the power back to suppliers, but this is a long and bumpy road,” he concluded.