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Interview: Nigeria’s To Cover Most Of West Africa This Year

by hotelsngpress/June 02 03:25 AM Last updated on, Nigeria’s leading hotel booking website, plans to cover most West African countries by the end of this year before venturing to other regions of the continent, but it will not raise any more funds anytime soon after it got a financial boost from venture capital funds Omidyar Network and EchoVC. Last week, which covers over 7,000 hotels of the estimated 10,000 hotels in Nigeria, announced it had raised $1.2 million from the two venture funds and that it planned to scale up the business to other African countries, starting with Ghana. “We hope to have covered most of West Africa by the end of the year,” Mark Essien, founder and chief executive at, told AFKInsider in an email response. “We have typically run as a very capital efficient company, spending $225,000 to achieve results that other companies have spent in excess of $5 million. So I believe that we will be able to achieve a lot without raising much more capital.” Essien said the planned expansion would “cost money” and was likely to increase the company’s operation and staff costs in the short term until it manages to generate some revenue from the new markets to “balance it out.” was founded in 2012 and received intial investment worth $225,000 from Lagos-based startup accelerator, Spark. It posted its first profit in 2014. Currently, the website has 40 staff across Nigeria visiting hotels and striking deals with owners, which has enable it to tailor its services to local travelers’ needs and beat international brands such as Expedia and “We have been able to hold the market while earning only from profits. So I believe with new capital we will do well,” Essien said, adding that while “sending people out there and meeting the hotel managers” was an expensive exercise it was a “necessary process” to grow the website. This, he said, will help beat off competition from both international and local companies. Nigeria’s travel market, estimated to generate $2 billion in revenue annually, has seen a number of online booking sites spring up in recent years, with facing stiff competition from Jovago, funded by German Rocket Internet venture, and local booking sites Wakanow and Nitestay. - Source:
Destinations solving the small problems before building Robocop

by hotelsngpress/January 31 04:35 AM Last updated on In the world of VCs and big money, being a small startup with very little funding can be nerve-wracking. With barely US$70 000, Mark Essien got ready to take on an emerging market startup juggernaut with a competing hotel booking platform. Founded in 2012, has raised US$250 000 — the bulk of which came via Jason Njoku’sSpark fund — and it’s fast becoming Nigeria’s Like most startup ideas, it was easy enough: build an online hotel reservation service for the Nigerian market and visitors to the country, with the hopes of expanding to the rest of West Africa. Very simple. “I found that hospitality was one of the most underserved [markets],” says Essien. His idea was to build an easy to use platform that allowed travellers to book hotels in most locations around Nigeria, and pay when they arrive at the hotel. Again pretty simple. His business model was easy: don’t charge the consumer and don’t make them register. Instead charge the hotels a commission for every reservation made on the platform. Dare I say it, pretty simple. Predictably however, building turned out to be more difficult than Essien had thought. He had managed to raise some money, but the funding ran out quickly as he tried to deploy a travel heavy business and build a responsive platform for all devices. “Our initial [funding] was US$75k, of which US$25k went to buy a car (to close deals in Lagos). So we had US$50k to deploy people across Nigeria and pay a team of 12 people,” Essien writes in a blog post marking the company’s second year. “That’s N8 million. At the time, I though that it would be more than enough. But quickly I realised that things were far more expensive than you think they are.” While the German-educated entrepreneur began to figure out his business and what he was trying to achieve, the development costs were rising. At the same time Essien learned that Rocket Internet had the same idea for Nigeria. He received a call from a friend upon returning from a holiday in Germany alerting him to the fact that Rocket Internet was building a site just like his. But this was Essien’s passion, an idea he had presented to Rocket before — and was denied. “I had actually pitched those guys a while back to open a hotel booking website in Nigeria. I searched my email for the pitch-deck to see if it gave away anything. Reading that document made me realise how different assumptions about a business are from when you actually start the business. That would not help them.” Two years later: emerging from the trenches Currently has more than 5000 hotels registered on its platform. It currently has 30 full-time employees, has seen US$2.3-million in transactions and has hit US$40 000 monthly revenue — that’s an annual revenue of US$480 000.’s success is both accidental and purposeful. Its founder stumbled on to an idea that came from experience; he had very little knowledge of what it meant to run a travel industry dependent business. The Nigerian tech ecosystem, though small, can be credited for his success. More specifically, Essien is thankful for the investors and industry experts who advised and worked with him. But by far the most interesting thing about this accidental success comes from realising that your biggest competitor is watching to learn from you. As Essien recounts it, the weeks that followed finding out Rocket’s move, kept him thinking and observing. The ecommerce builder had everything — money and resources. But it too lacked experience in Nigeria’s hotel space. “I noticed something: [Rocket] kept studying us, trying to find out how we did it. They were trying to beat us,” he writes. “That’s when I realised that somehow or another, barely knowing it, we had become the largest hotel booking website in West Africa. So I didn’t have to beat Rocket Internet, they had to beat me.” Things look bright currently, but there is competition for the startup. It’s biggest competitor in the local market still remains the Rocket-funded Jovago. There is also another similar service, WakaNow, funded by New York-based VC Tiger Global. However, for Essien, it’s a case of challenge accepted. His platform isn’t just about booking a hotel for the night or a weekend — it’s about cataloguing as well. “Prior to the existence of our site, it was almost impossible to know what hotels existed in a particular city,” he says. “We are making the 95% of hotels in Nigeria that were invisible to the internet, visible and bookable.” According to the platform, none of its competitors have the volume of local hotels it has. “We also have the most weekly bookings for any travel company in West Africa,” says Essien. “It will bring African hospitality online and show that Africa is a place one can safely travel to.” Expansion and future-thought: the road is still long Though Essien’s vision has been admirably executed it still faces major competition from the likes of if it hopes to crack the international market. Currently he reckons his company’s profit is minimal but projects a better year ahead, although more capital is needed to grow. Spark’s stake, though a minority at present, will have to increase if Essien expects more capital from the investor. If hopes to become the biggest hotel booking platform in Africa in the next five years it needs to combat hotels with robust booking services as well. Currently the fact that the platform is device agnostic helps the service with Nigeria’s mobile-centric audience. There is talk of a possible Android app but that is not a high priority for the company right now. Though Essien believes it is necessary, just not now. “Rather focus our limited resources on the web for now,” he says. The company’s future paints an interesting picture. It needs to start making serious revenue with significant profit if is to unburden the pressures of big money such as Rocket and Tiger Global in its competitors. As part of the next stage of the platform’s growth, Essien says that Nigerians will soon be able to book international hotels. Essien is confident of a successful future. His epic three-part post to outline the company’s and his success is a great strategy in the search for new investors. Who wouldn’t be interested in all that traction? He could really be doing anything with his degree in robotics and computer science, but the truth is quite simple for him. “Let’s solve the small things before we start building Robocop in Africa.” Source: VentureBurn

Bringing online travel to West Africa, a place where the big brands fear to tread

by hotelsngpress/February 23 04:55 AM Last updated on When, West Africa’s first hotel listings site, launched in Nigeria at the start of 2012, it entered a business environment without many of the things peers in the US and Europe take for granted. These included small matters such as local technology infrastructure, online payment systems and reliable internet connections in hotels. But co-founder Mark Essien believes building from scratch now will reap rewards as affluence and connectivity increase across the region. A few weeks into the project, he agreed to answer some questions on the business by email. Can you give us an overview of the team? Right now we’re keeping the team small to make sure we are able to stick around till the market is well developed. I direct everything. I’ve got four freelance programmers who develop the site on project basis, one Romanian who does the back-end, two Indians working on the front-end and a Nigerian who is doing the payment systems. I’ve got a girl handling phone calls and Twitter, and my sister is coordinating the content research. Then there’s Chijioke Nwoaduh in Abuja who is setting up the office and starting to build a ground team. How do you source hotel content? At the moment, we are still collecting the hotel content from local listings and directories, both online and print. When we exhaust pre-compiled sources, we’ll start the ground-work. We are planning to have one coordinator in every state. How much of your technology infrastructure is in Nigeria? None of our tech is in Nigeria. Our servers are in Germany and the programmers are around the world. We only have one programmer in Nigeria. By the middle of the year, when our Abuja office is set up, I will consider bringing in some part of the infrastructure to Nigeria, but certainly not the servers. Nigeria is not ready for that. Do you see your market as Nigeria, West Africa, Africa or global? Right now I’m completely focused on Nigeria. It has the seventh largest population in the world, larger than Germany, Japan or Russia, which are countries with many large and thriving internet-based businesses. Nigeria already has the tenth largest population of internet users in the world. If we are able to create a product that works well within Nigeria, then it will be easy to expand to similar West African countries, with Ghana first on the list. What is the projected revenue model? We won’t offer advertising at all. Our service is useful mostly for Nigerians in Nigeria, and that is a very bad advertising market. Our core focus is to be a service that brings customers to hotels, with our revenue coming from a cut out of that process. It’s a common model, but the Nigerian market is not quite ready for it – many people are not yet online, in particular the older, richer people who are more likely to stay in hotels. Many hotels can’t do electronic bookings and don’t have consistent internet connections. So we want to keep everything lean and tight until the Nigerian market is viable. Where has your funding come from? We’ve done one fund raising of N5 million (around £87,000). The money came from a Nigerian angel investor that I’ve known for some time. After the launch, I had a number of offers from some of the major internet-based businesses within Nigeria, but right now we do not want to raise more money till we are ready to more aggressively expand. What are the key features on the product road map? Our major focus right now is the mobile version. Roughly 90% of the likes on our Facebook page are from mobile devices. Almost all Nigeria-focused sites I have spoken to say that their number one browser is Opera Mini by a large margin. So we’re developing two more versions for iPhone/Android phones and Nokia and Blackberry devices. After that we’ll look at payment and booking infrastructure that will allow hotels to manage rooms and collect payments over our website. In parallel we will develop an Android tablet app that a hotel can use on the front desk to collect payments. Do you have any agreements with Expedia-owned If not, do you foresee any trademark issues? There will be no trademark issues because “hotels” is a generic term that even they were unable to trademark. Even if they were able to trademark it, they would need to come down to Nigeria and battle it out in Nigerian courts, and I’m not sure they would enjoy that very much. [Ref – loses court case] Geographically speaking, you’re a first mover in this space. What told you the time is right? When the industry experts start going into something, then it’s the right time (when the random businessmen start going in, it’s too late). I became interested in the Nigerian market when South Africans started opening web properties there. For example Mocality, PrivateProperty, Dealfish. Those guys are dealing with a somewhat similar market in South Africa, so they must see some potential in Nigeria. Then I saw the fast growth of and Jobberman and realised that the time was right to set up something focused on Nigeria, so that we could be prepared when people are online and can spend money. To what degree is your growth and development dependent on other parts of the online travel space maturing? For instance, I’d guess that inconsistent (or non-existent) reservation systems at hotel level make it difficult to develop live booking? Are there clear needs/opportunities you think foreign and regional investors are missing? Yes, live booking is a big problem because many hotels are just houses with some rooms and a couple of people at the front desk. However, this is also an opportunity, because if we can get our systems into the hotels, we can lock down the market. Following VC4Africa, I see a steady stream of local web startups that are filling gaps left by big brands’ reluctance to invest in Africa – in Ghana alone I’m watching, (Spotify) and (eBay). Is that a trend you recognise? Would you associate with it? Big brands have a very hard time doing business in West Africa. I would indeed say that we are capitalizing on this. I doubt that TripAdvisor or Kayak is going to be in West Africa within the next ten years. They are not ready to have people on the ground walking door to door looking for hotels. They are not ready to deal with power fluctuations. The Chinese market is equally tough, but in China the government is artificially creating roadblocks preventing foreign companies from competing. In West Africa, the roadblocks are natural. By the time the West African environments are established enough for the big brands to come in, I think the space will be completely dominated by local businesses.