The rise of the internet over the past two decades has had many impacts on global culture and commerce, with the travel industry one of the first to see the potential in the online world. Among the pioneers in the field has been Asia-based Agoda.com, today one of the world’s fastest-growing online hotel booking platforms.
Robert Rosenstein and his friend Michael Kenny cofounded Agoda 15 years ago in Phuket and worked through growth, downturn and acquisition. Mr Rosenstein now leads the Singapore-based company as CEO, overseeing 1,300 employees representing more than 20 countries.
“We wanted to create a global site that would have the scale to deliver better deals for all kinds of customers — those who book in advance or who book at the last minute. Because that is such an attractive opportunity for hotels, they were willing to give us pretty good rates,” explains Mr Rosenstein.
“Both of us are lovers of travel and have a strong interest in the internet business, so it was sort of a natural thing that we wanted to do.”
As a child, Mr Rosenstein had the opportunity to travel around the world with his parents. He also had a strong interest in the emerging world of information technology and pursued a career in the fledgling internet. He worked with a defence contractor in California and later moved to New York City to work in the IT industry for a number of years.
“It never really worked for me until I was able to put together my love of the internet and my love of travel,” he recalls. “Once I connected those two things, I finally found out where I wanted to be.”
Beginning life as PlanetHoliday.com, the company signed up its first hotel in Phuket, before expanding to Bangkok, then across Thailand and the region in the following years. In 2005 it became Agoda and set up headquarters in Singapore.
The online booking business model is very simple, says Mr Rosenstein. The aim is to secure inventory from hotels — Agoda today has access to 285,000 hotels — and sell it to consumers, earning a commission on each transaction.
Thailand was the company’s first market, he said, because Thai hotels tend to be receptive to new business ideas that can help them sell rooms, and also because they were interested in getting more volume particularly in low season.
At the heart of Agoda’s success is its ability to allow travellers to make independent choices and to compare the options on offer in the marketplace.
“The big message about why people are booking online today is that they are in control,” he says. “They are in control of the process and not being forced into a package or to bundle this airline and this hotel or even to stay an extra day. Consumers want to be in control and that is what Agoda offers.”
Even though Asia is the main focus for Agoda, its site now covers all the major capitals around the world that Asian travellers love to visit, among them New York, Los Angeles, London and Paris.
To stay successful, he says, a hotel booking engine must help consumers make the best decision while minimising the time they have to spend doing research. He views Agoda as a simple company that does just one thing very well and always stays focused.
Not every hotel offered through Agoda will always have the cheapest rate, but overall price performance and value for money, together with consumer confidence, make it very competitive, he says.
Mr Rosenstein has carefully nurtured Agoda through a lot of growing pains in an industry that is highly vulnerable to external shocks. For hotels and tourism in Asia, the Sars outbreak in 2003, the tsunami in 2004 and other events large and small have all been challenges.
“I think we are still here because we have invested in people, trying to spend a lot of time teaching them, training them and developing their careers,” he says.
“Our employees care; they stayed with us through tough times and were willing to put in extra hours when problems occurred. They are the ones who keep us alive.”
The drive of the Agoda staff reflects the CEO’s own quest for constant improvement. In his view, one should never be satisfied with the status quo and should always be looking to create something better.
“No matter what you do in life, you can always do a better job,” he says. “My core value is whether it’s on the website, as a father, as a husband or as a friend, there is always so much more you can do.
Agoda.com (left screen) and TripAdvisor are two very successful travel related websites.
“Never stop learning, never stop improving yourself, recognise that you have a long way to go in everything that you do and continually strive to make yourself better in whatever you do.”
By the mid-2000s, Agoda was ready for the next stage of growth but Mr Rosenstein realised it would need an injection of capital. He said the company was very cautious in picking the right party to sell the business to, before settling on Nasdaq-listed Priceline.com in 2007.
“When we had the opportunity to sell the company, we picked an owner that would be nurturing and would let us achieve our dream, an owner that would not interfere too much but yet would be there to help if we needed it,” he said.
Despite having a US parent, Agoda is still mainly focused on Asia, where the fast-emerging travel class and the rapid rise in consumer purchasing power offer the company ample opportunity for new growth.
Nowadays, Asians are travelling not only within Asia but all around the world. With its aim to accommodate Asian travelers no matter where they are going, Agoda has already expanded its operations in Europe, the United States, the Middle East and Africa.
With his own background as an early internet enthusiast, Mr Rosenstein says a company that knows how to utilise technology correctly has a great advantage.
“In the online world, there is always going to be something broken. I love to find out what the problems are, get everybody together in the room and identify how we can put the fix in place,” he says. “The great thing about online is that it can happen very quickly and we can see instantly that the consumers love the fix. This makes me so happy and it’s a lot of fun.”
However, one aspect of the business that Mr Rosenstein wishes he had recognised even earlier has been rapid consumer adoption of mobile devices. Some e-commerce companies that saw the trend coming and made early commitments to mobile platforms have benefited greatly.
“It is amazing how fast consumers have adopted mobile technology and the way they are using their devices today,” he says. “We have very good mobile products now, but I wish we could have launched them two years ago.”
Mr Rosenstein remains humble about the achievements of Agoda and his own contribution, saying that the position the company is in today is far beyond his initial expectations as one of the cofounders.
“I feel incredibly lucky and fortunate to be involved with Agoda. I didn’t imagine that it would be this successful. I made a lot of mistakes and learned a lot of things in the last 10 years working with this company,” he says.
“I hope that I have an opportunity in the next five to 10 years to identify some young people like me and help them along the way.”
