Mark Essien is the founder of Nigeria’s largest hotel booking website, Hotels.ng. This online portal that allows users to book hotels from a selection of over 5, 000 hotels across Nigeria. In this interview with BEN UZOR, Essien talks how he turned a passion for technology into a company that has redefined the Nigerian hotel booking process.
Hotel.ng is fast becoming a household name. What inspired your decision to move into the online business space
My primary interest has always been in technology and building anything that involves the nexus of the real world and online. Hotel.ng is an online travel agency specialising in hotel bookings within Nigeria. We allow clients to book hotel rooms online, provide comprehensive help and support to our clients and make the hotel booking process smooth and easy. With our platform, customers have the ability to look at the pictures of hotel’s facilities, enabling him or her decide to or not to make a reservation.
You recently secured a $1.2 million investments from international investors. How does this investment position you going forward, particularly in terms of expansion and exploring other sources of revenue
Firstly, I think the investment is a good validation of the work that we’ve done. Recently, I was looking at the list of the hottest start-ups of 2013. On the list, we are the only start-ups that’s alive today. We’ve been able to stay alive through this two turbulent years. We have succeeded in building a profitable business. Now, we have secured this investment after the new partners and Venture Capitalists (VC) came in to look at our numbers. This investment is a vote of confidence. It is a statement of their confidence in this business. The investors coming in are not just bringing money. The investors are coming in as partners in the business.They are coming in as investors who have big funds. The investors gave us $1.2 million but have over $500 million in their fund. Typically, as the business expands as it has more capital need, we are likely to source funds from our existing investors. With this investment, we can expand locally and across West Africa. This investment puts us in good stead to take advantage of the opportunities across the African continent.
Securing funding for digital start-ups is a daunting task. How can a start-up position itself to attract funding
For Hotels.ng, securing fund to drive the business was difficult.I had to speak to individuals in the investment community and many refused invest in my business. I attended lots of meetings that were cancelled five minutes before time because the prospective investor had more pressing matters to attend to. As you look for funding, focus on building traction in the business. We were fortunate to have a business that was making money. We had a business that made enough money to keep us growing as we searched for fresh investors. It kept making us more and more attractive to the investment community. Any business that want to get funding should focus on building the business. When the start closing the deals, you are sure to have excess of funds. Because securing funding is difficult in this market, it creates an opportunity for few companies to elevate themselves to the next level. Whenever an investors come in search of viable companies, there’s not many options left.
Overtime, we have seen digital start-ups come and go. What has kept Hotels.ng in business up till now
Firstly, when you start a business, you have to tell your story. Investors read about, they get a feel about you and you are able to attract funding. We were able to do this really fast because we focused on entering the right market. We are able to show the investment community that individuals and corporates are ready to book hotels online. Secondly, many enterpreneurs are not sound in the day-to-day running of their business. Many enterpreneurs cannot forecast what’s going to happen some months down the road. Many entrepreneurs cannot make hard decisions when push comes to shove. At the beginning of 2014, we ran out of investment money in the bank. We had a team size of 20 people. Owing to financial constraints, we had to reduce the team size to 8 people. We focused on our core business. With our profit, we grew the business and by the end of the year we had 26 people. We achieved this feat purely on profit and in a competitive landscape. I think that is the hard decisions that needed to be made to keep us on business.
What is your assessment of the hospitality industry looking at the evolution of the electronic commerce industry
The hospitality industry is worth about $3 billion annually in Nigeria alone. It is a massive industry with enormous potentials. Generally, electronic commerce is the first online market to take-off. We have seen the same trend in India, South America and many other emerging markets. The second thing that takes-off is travel. Travel is made much easier by pre-bookings, and online price comparisons. As e-commerce develops, travel follows behind.
Considering that the hospitality industry is growing at a fast pace, how robust is your platform in terms of capacity to manage the droves of Nigerians moving online in search of cheaper botel bookings
We have grown more that 30 times in volume since inception but we have i never had any downtime. We have set clear growth projections. We have to match our growth projection with existing technical skills. Bearing any shortfalls in capacity, our management must make necessary improvements in that regard. The Nigerian economy is growing fast. Tourism and hospitality is becoming a major aspect of the economy. The size of the hospitality sub-sector is likely to double over the next ten years. Companies as ours are poised to take advantage of the growth of the industry.
What’s unique about this platform. What sort of value add do you give to customers (hotels) for placing the services on your platform
Take for instance, if someone build a hotel in Enugu, it is quite difficult for the hotel owner to advertise his or her services to customers in Lagos. A platform as our exposes them to this new audience and the hotel owners don’t have to spend money. In the end, Hotel.ng makes money when a customer stays in the hotel. We charge a referral fee for every customer that we successfully bring to the hotel. Our website is an advertising platform for them. The difference is that the hotel owners pay us after making money.
Is that your revenue model? And, Is that sustainable for the business
Over the course of 2014, we went from a 10-man company to a 26-man company purely on profit. We were a profitable, solid business even before we raised fresh investment. We are a sustainable business.
BEN UZOR
