With a vision to be world leader in destination management, bundled with strong technology and distribution channel, Red Apple Travel is clear and bullish on its business and future strategies. In an exclusive interaction Suneet Goenka, group managing director, Red Apple Travel, shares the company’s growth story and the way ahead
What has been Red Apple’s journey, from its inception until now?
I come from an entrepreneaurial background. We started off in Myanmar. I had just graduated and I wanted to do tourism. Being from a new generation then, and with my understanding of business potential in tourism industry, I set my mind onto it. The only travel business we had then was my father’s GSA office (Bandoola Travel) for Air India (erstwhile Indian Airlines) in Myanmar. We were the largest business house in Myanmar. Soon I realised that inbound business has potential to fetch money, and we set up a small DMC and started doing inbound tourism business.
Our India operations started with a small office in South Mumbai. When we entered the India market, SOTC and Cox & Kings were the only customers we had, but as our business grew, we were exposed to smaller cities. My wife and I walked through the streets, meeting travel agents and constantly strived to bring the business to new heights. In about one and a half years, we had around 2,500 active partners working with us. Once our distribution was set, we realised that we have the customer base, we know how to set up a DMC, so now let’s go to a new level; then we entered the Malaysian market, after which our company has been witnessing continuous growth.
What, in your opinion, is the problem for the Indian travel industry?
The Indian travel business is very fragmented and the buying patterns are diverse, which makes it difficult since there’s no mass consolidation at any level. Product knowledge is rather faint coupled with the lack of buying power. Small travel companies, do not have volumes, hence they fail to buy buy right.
According to you, what would be the solution to these problems?
The first thing is product specialisation – travel agents and tour operators should focus only on products they are good at. They are required to create their niche and choose a model of distribution. It’s about knowing what you want to do, choosing your niche, having your business model right and working towards it. Today business is not about profit for many companies; it’s about the topline or the bottomline and having a bottomline in place is very critical.
What are Red Apple’s plans for the next five years?
We want to be the world’s largest destination management company. We are very focused on getting our footprint globally; we are currently present across Asia, Australia and Europe and we want to start penetrating into China, Vietnam and Cambodia. Africa is where we have started entering, from sales perspective. The next five years will see a lot of advancement in technology; we are investing extensively in technology, destination offices and destination network. There’s a huge market share coming from Japan, GCC and South East Asia. We have opened about four sales offices in Africa, wherein Nigeria, Kenya, Ghana, Uganda and South Africa are strong markets for us.
Tourism is the most volatile business. A small political disturbance or a natural calamity can destroy the market. Hence, obviously we want to expand our market share in regions other than Indian subcontinent. South East Asia is well-settled; however Africa is a very interesting market – small, but evolving. It is also a fragmented market, competition is lower and it is a cash-and-carry market. We are extensively working in East Africa and we will push our efforts in West Africa slowly and steadily.
What are your plans for South America?
We have an office in Spain, which services Latin America. We have an entire Spanish team that handles the outbound business. It is important to understand that Latin Americans buy extensively from Spain. We handle a lot of Latin American business, but through Spain. In the next two years, we will be investing extensively in the Latin American markets. Inbound business to Latin America is something we will also be looking at in the next two years. Our global head office is in Dubai. We have back office functions happening in three locations – Dubai, Egypt and Indonesia – and the regional offices are purely contracting servicing offices. In Latin America too, we will have a contracting and servicing team.
Where does India stand in the company’s plan?
India is our home territory, which contributes 55 per cent of our revenue. Currently, we are looking at penetrating in smaller pockets of the country. Until now we were happy working with our core partners and the customer base that we have, but the next step is to penetrate into smaller cities such as Indore, Coimbatore, Madurai and more, where we are looking at setting up our distribution channels.
We want launch our product lines for the India market, known as ‘Good Earth’, next year. Good Earth is fixed departures to destinations that are not sold by Indian operators. A lot of travel companies don’t want to risk their money on products like these.
How crucial is demography when you plan your business?
Our business is completely based on demography. Before we get into any market or product, there’s intense market research; we understand the customer profile, customer age groups, the markets they come from, their preferences and various other factors.
What’s your future outlook in terms of turnover?
For the 2017-2018 fiscal we are looking at a turnover of US$ 110 to US$ 115 million.
What is Red Apple’s roadmap for 2018?
Myanmar is an important location we are looking at for business, due to its popularity among a large part of our customer base. We are expecting very good business in China this year. We expect an increase of at least 25 per cent. We are also launching our new product, ‘Hidden Door’, next year, which includes group tours with children.