Travel Unicorn Klook Pivots As “COVID Staycations” Skyrocket
COVID-19 hit many industries hard– especially travel. As we hit the peak of summer, people are looking at “staycations” more and more. Klook, a world-leading travel activities and services booking platform that crossed the $1 billion valuation mark back in 2018, was among the travel industry giants to be affected by COVID-19.
When countries went into lockdown and started closing their borders, the travel platform’s revenue plummeted by 90% through March and April.
In April, the World Travel & Tourism Council stated that COVID could put up to 100 million jobs in the tourism industry at risk.
But as things were looking bleak, new opportunities began to surface.
Klook allows travelers (primarily from Asia) to explore and book experiences overseas, ranging from Hollywood studio tours in Los Angeles to stargazing tours in Hawaii. The platform is similar to Airbnb Experiences, and, like Airbnb Experiences, it takes a cut from every transaction that occurs between customers and vendors.
In 2018, the company crossed the $1 billion valuation mark and was seeing 30 million monthly user sessions a month. By this April, however, the number of monthly user sessions a month shrank to 5 million. Being that the platform is entirely built upon the travel industry, Kook had to pivot.
The pivot? Focusing on staycations.
“At the end of the day, we are in the business of fun things to do. There are things to do at home, as well as local things to do when people could travel,” co-founder and chief operating officer Eric Gnock Fah reported to TechCrunch. “Now [COVID-19] is giving us an opportunity to add a new aspect to it.”
While quarantined, many people have taken up new hobbies as outlets for creativity and entertainment. They’ve taken interest in learning new languages, exploring new skills and talents, and cooking. In fact, search interest for the word “recipe” has reached an all-time high in the U.S. and worldwide, Google Trends found.
People were staying home, but “stay at home” orders didn’t change people’s desires to experience new things and explore the world around them. In response, Klook expanded its business model to include value offers that would meet the high demand from people still eager to see the world.
The company began to offer Virtual Interactive Experiences. From embroidery kits to yoga classes and even physiotherapy sessions, Klook’s initiative, Klook Home, offers a wide variety of products and activities people can experience from the comfort of their homes.
The platform also began hosting live stream sessions each weekend, providing viewers with mind-blowing experiences that they can tune into- like going to a Bali Safari Park and getting an exclusive behind the scenes interaction with baby komodo dragons.
The company’s growth was prompted by domestic consumption in the Greater China area, which has been one of the first regions to recover from the pandemic. But Klook isn’t the only online travel giant, competing against companies like Ctrip and Qunar. Gnock Fah found a way to set Klook ahead in the competition by creating curated, niche activities instead of tourist hotspots.
“China is definitely a competitive market, but it’s also big enough,” Gnock Fah shared with Techcrunch. “It’s not just about price. It’s easier to compete on price, but on unique offerings, a lot of content and trust is needed.” The company created hyperlocal activities and experiences in order to “capture domestic tourism, said Gnock Fah. “What we do is to add some joy back to consumers … rather than just [having them] go abroad or stay at home.” He adds, “as a frequent traveler, you eventually become more like locals, so the opportunity that we’re trying to capture now is going deeper into the supply for things that are relevant for frequent visitors.”
Even before the COVID-19 pandemic, Klook was seeing an uptick in domestic travel, recording over 250% year-on-year growth in booking 2019. In fact, in April, “about 60% of the platform’s total number of searches across the APAC region and Europe were related to domestic experiences. By June, over 95% of searches in Taiwan and Hong Kong were purely domestic.”
When Techcrunch asked what advice he would give to startups coping with coronavirus impact, Gnock Fah said: “It’s important to know what the future is going to look like and not veer away too much from the core competency and the mission of the company. At the same time, you need to be agile and know what needs to be done for the short term to ensure that the long term still exists.”
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