The future of travel industry
Interview: Pere Vallès, CEO Exoticca

by The Society Magazine - Decrypting Tomorrow#4
Gaia Giorgio Fedi
March 9, 2022

Exoticca, a Barcelona-based digital tour operator, aims at becoming the leader in this travel industry segment, one of the last in the hands of offline agencies, as CEO Pere Vallès explains

Making dream trips come true. This is the idea behind Exoticca, a Barcelona-based tour operator specialised in multi-day package tours, as CEO Pere Vallès stated in an interview with The Society Magazine, in which he depicted his vision of the future of the travel industry.

The company, present in the United States, Canada, United Kingdom, France, Spain, and Germany, operates an online platform for the purchase of multi-component complex packages to over 50 destinations worldwide. Vallès, a serial entrepreneur and investor with over 20 years of experience in leading technology companies, explained that Exoticca is now de facto democratising multi-day tour packages, one of the last strongholds for offline agencies, where the company aims at becoming the industry leader.

How does Exoticca work and how is it changing the way people travel?

Exoticca is digitising one of the last segments of the travel industry that is still offline and in the hands of the traditional brick-and-mortar travel agencies: multi-day tour packages (i.e., trips to long-haul destinations with multiple components, including flights, hotels, land transportation, activities, etc.). We believe that, as it has happened in other travel categories such as flights or hotels, multi-day tour packages will also gradually migrate online. As a company, our mission is to make multi-day tour packages accessible and affordable to all travellers by offering the possibility to book these types of trips online at super[1]discounted prices. Our value proposition is based on two pillars: convenience and best value. In terms of convenience, we remove all the existing friction from the purchasing process by allowing our customers to do the entire discovery and purchasing process online, providing them with real-time pricing and availability for the products they select. In terms of best value, we have managed to bring down the cost of our tour packages by an average of 35% through and intensive use of technology and the disintermediation of the value chain. In this regard, we can say that we are democratising multi-day tour packages as we are making it possible for many travellers to experience a safari in Africa, an exotic vacation in Japan or a tour in Peru – before, only a small minority could afford it instead. Our mission is to make dream trips come true.

You have managed to grow despite the pandemic and its significant repercussions on the travel industry. How did you succeed in that?

The pandemic was an unprecedented catastrophic event for the entire travel industry and it caught us, and everyone else, completely by surprise. After five consecutive years of more than doubling our sales every year, they came to an almost complete halt overnight. We knew that we had to react quickly and had two broad alternatives. The first was to go into ‘hibernation’, furloughing all our employees while waiting for the end of the pandemic. This was what most travel companies did, but we decided to follow a different path by trying to reactivate sales through a series of aggressive and creative measures, even under the worst possible market conditions. In particular, we implemented three measures that proved to be key in our sales recovery. Firstly, we have removed the uncertainty of booking at this time by offering the most flexible cancellation policy on the market, so that you have the peace of mind to book now knowing that you can cancel at any time, for any reason, and get your money back. Then, we went back to all our suppliers and renegotiated our contracts in order to ensure us the possibility to offer our customers never-seen-before prices to 50 destinations worldwide. Finally, we extended our travel window until the end of 2023, so that customers could select for their next vacation a date in which they feel it would be safe and comfortable to travel again.

How do you think technology is reshaping the travel sector? Do you believe it will play a role in the industry’s post-COVID recovery?

There are still many opportunities for innovation in the travel industry, and technology is clearly one of the key drivers. I believe that innovation will come not only from disruptive technologies such as AI, augmented reality or blockchain, but also from incremental improvements based on more mature technologies that can make processes much more efficient and improve the customer experience. In our case, we have used technology in order to have the possibility to disintermediate the complex value chain of multi[1]day tour packages, bringing down the cost of these packages by 35%. We have built an engine that allows us to interconnect directly with the provider of each component of the package – which, on average, has 25 different components – and provide real-time pricing and availability to our customer for all our packages across 50 destinations. We have also completely automated the booking process and the relationship with our suppliers, in order to become more efficient and pass the savings on to the customer.

What do you envision for the future of travel and what will be the main driver of growth in the next 10 years?

Never bet against travel. There is an inherent need to travel amongst human beings and, therefore, travel will continue to be one of the main verticals in our economies, representing about 10% of global GDP. Therefore, once the COVID pandemic is over, I expect a very strong recovery and rapid growth for those players that have been able to take advantage of this global crisis to improve their business models. Currently, there is significant pent-up demand and an excess of savings, which will lead to an explosive growth in the travel industry as soon as travel restrictions are fully lifted. I believe that online players will have an advantage over traditional brick-and-mortar travel agencies in this recovery, because the trend towards e-commerce in all verticals has accelerated as a result of the COVID pandemic, and this trend will continue in the future.

How do you see Exoticca in the next 5 years?

Our ambition is to become the global digital leader for multi[1]day tour packages. Our business model, based on building our own product portfolio, has fared much better during the COVID crisis than those of pure marketplaces, because it gives us full control over the pricing and the customer experience in all our destinations. This has allowed us to grow and improve our unit economics even during the pandemic, which puts us in a very strong position now that the COVID emergency is in remission and travel is starting to recover. There are three major factors that clearly play in our favour. First, there is significant pent-up demand, with people eager to travel again while family savings and cash deposits are at record levels. Then, the competitive landscape we are now facing is completely different from that before COVID, as the crisis has hit many of our competitors hard. Finally, the trend towards e-commerce as a result of the pandemic is accelerating the transition from offline to online in the purchase of multi[1]day tour packages. The combination of these three factors should catapult the company to the digital leadership in this travel category, which is very exciting.

Exoticca is paving the way as a travel-tech company, but what are the most promising startups emerging in the travel industry?

It is difficult to point to a single direction, as the travel-tech sector is booming with new ideas. In general, I would say that the startups capable of either significantly reducing the cost of traveling or significantly improving the travellers’ experience or, even better, to do both at the same time, will be winners. As per specific trends, I find the application of a subscription model to travel to be very intriguing: this is something still very incipient in our industry, but a common trend in many other verticals. I believe that the subscription economy will play an important future role in travel, and – who knows – maybe we might be part of this trend in the future also at Exoticca. I also like the startups that cater to a very specific demographic, as they tend to solve real pain-points in a very effective way. Finally, I am personally a big believer in real authentic experiences in travel, and those companies which can master this and build a brand around it will have a clear advantage.

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