Fernandes sees deal bringing AirAsia a step closer to becoming a one-stop digital airline.
20 Apr, 2017DIGITALNEWSASIA.COM
IN a significant deal, travel planning startup, Touristly Travel Sdn Bhd (Touristly) has seen AirAsia Bhd acquire a 50% stake in it for a total of US$2.6 million (RM11.5 million) which consists of AirAsia injecting its Travel 3Sixty digital magazine, valued at US$1.5 million (RM6.5 million) into Touristly via AirAsia Investments Ltd and extending a US$1.1 million (RM5 million) convertible loan to it for working capital and development.
AirAsia group CEO, Tony Fernandes will become chairman of the board on completion of the deal while angel investors Jeffrey Saw and CK Wong remain as shareholders.
The acquisition follows an earlier round last Aug where the AirAsia owned, Tune Labs, took a 9.54% stake in Touristly for an undisclosed amount. And while that means that Touristly’s founder and CEO, Aaron Sarma has lost majority control, he tells DNA that, “Both parties appreciate the need for Touristly to have the autonomy to execute its business plan effectively.”
Shareholding aside, Sarma is excited about the fact that the deal also puts Air Asia’s 60 million customers a year on the table for Touristly to monetize.
“It’s nearly impossible to put a value on the opportunity to serve over 60 million travellers a year with our platform. This is highly qualified traffic with purchase intent. This will enable us to scale up at a rapid pace,” says Sarma.
"The deal will allow us to tap into AirAsia’s vast regional network with offices in most major cities in APAC, thus helping Touristly expand its footprint efficiently."
AirAsia is also looking at the monetization opportunity. In its statement to Bursa Malaysia, announcing the acquisition, it expects to tap into its existing base of customer to increase ancillary income. “With the trove of AirAsia customer profiles and datasets coupled with Touristly technologies, the Touristly platform can offer more targeted offerings that match the customer’s lifestyle and travel aspirations, for instance, adventure travel,” says AirAsia.
To that, Fernandes adds: "We see enormous potential in Touristly, which perfectly complements AirAsia's existing travel offering. Our guests will be able to choose from thousands of activities when purchasing a flight and this brings us a step closer to becoming a truly one-stop digital airline."
Both parties have already witnessed the fruits of their collaboration over the last nine months where Sarma says they have seen high conversion rates when selling on-ground activities to AirAsia flyers with an average spend of RM813 per flyer. That’s a share of the flyer’s pocket that Fernandes has never been able to successfully capture before, though he has tried, for example with AirAsiaGo an online travel portal managed by AirAsiaExpedia, the joint venture company between, Expedia Inc and AirAsia. AirAsia has however sold 25% of its 50% stake in the company and its investment into Touristly seems to signal that it sees a better future partnering with Touristly than with Expedia for monetizing the on-ground activities of its passengers.
“We’re now about to open the floodgates,” says Sarma, on the monetization opportunities with AirAsia’s 60 million flyers.
In its Bursa announcement, AirAsia also cited the following benefits through its 50% acquisition into Touristly:
● Provide a comprehensive travel proposition to customers
Currently, AirAsia already offers almost a complete suite of travel offerings including hotels via the AirAsiaGo platform and car booking. The missing piece is on-ground activity offering. Increasingly, there are more free independent travelers looking at planning their own travel itineraries, rather than depending on tour operators to plan their entire trip.
Touristly has built a platform based on industry proven API technologies that allow guests to seamlessly create and purchase travel on-ground itineraries for AirAsia destinations. Guests can also combine and view them in a single itinerary for easier travel planning. This powerful feature complements our guests’ travel intention and purchase habits, and leads towards higher conversion.
● Strong synergy with AirAsia
Touristly has synergies with AirAsia in terms of the destinations covered and platforms. Out of the over 120 destinations that AirAsia operates, Touristly covers 70 destinations and growing. Guests can also earn AirAsia BIG Points when they purchase deals on the Touristly platform. Going forward in 2017/2018, AirAsia BIG Points can be used as currency to redeem deals on the Touristly platform, including one-click hassle-free payment with AirAsia BigPay.