Joydeep Chakraborty describes himself as a traveller who loves serendipity. “I never book in advance. I like to walk around, find a nice hidden hole in the wall place. The joy I get from that experience is far more than getting a table in a four star Michelin restaurant,” he told me over lunch.
However, the chief strategy and investment officer of Traveloka probably didn’t count on the kind of serendipity that came with Covid, when less than a year into his new job, travel collapsed and he was thrust into one of the most critical roles in the organisation – that of keeping the lights on.
Calcutta-born Joydeep joined Traveloka on May 13, 2019 when travel was on a high. He had served as banker to Traveloka when he was working in UBS, and got to know founder Ferry Unardi fairly well. So when the job offer was made, he took it without hesitation. “I had a fairly good conviction of them as a business, also I liked Ferry quite a bit. The founder matters a lot, still does.”
You can sense speaking about those dark years brings on certain memories he’d rather bury. “You know how we humans have certain hormones that help us forget stressful times,” he smiles. “Those years, they certainly weren’t boring and it’s not the kind of excitement I’d go back to. Stabilising the balance sheet, building the runway, ensuring cash flow and reserves – that was hard.”
It was then he also learnt the lesson of the principal-agent dichotomy. “As an agent, you give advice but you don’t feel the consequences of the advice. The principal though is responsible for his actions till the end.
“For an agent, if a transaction doesn’t go through, you move on with life, another client, another transaction. For a principal, the consequences of not doing it right are real. That was a hard realisation for me.”
Joydeep said he did the job he was hired for, “keeping my head on my shoulders” even though he admitted, “It got quite emotional at times”.
“What helped was that we had developed good relationships with certain investors who had seen us in the best of times and when the worst of times comes, they come to have a conversation.”
In July 2022, Thailand’s PTT Oil and Retail Business invested in Traveloka. In September 2022, Traveloka secured financing worth US$300 million from Indonesia Investment Authority (INA), BlackRock, Allianz Global Investors, Orion Capital Asia, and other leading global financial institutions.
In total, it has raised US$1.5b over eight rounds, since its founding in 2012.
“Traveloka is fortunate to have received support and collaboration from various stakeholders in our 11 year journey, all of whom have been instrumental in strengthening our platform and discovering new synergies.”
He noted, “I think we all learnt that there are things you can’t control like Covid. In the last decade, capital was free and easy. If you went to talk to media and investors and prospective employees, travel was not part of the same hype as fintech or ride hailing.
“Travel has been there a long time, it’s gone through many iterations, and there’s a certain amount of steadiness and stability. Things go in cycles and that thesis is coming true. A lot of sectors are going into slumps and travel is coming back – people like it again.
“It’s a steady business and therefore it pays to be steady and you know, the tortoise and hare story – sometimes it pays to be the tortoise. Travel is fulfilling a fundamental need – you are not inventing the problem, you are solving problems that exist, so it’s a win-win model.
“We are back to the environment where boring is good.”
Now that travel has recovered and Covid is no longer regarded as a global health emergency, the role of fund raising is no longer as critical and Joydeep said his focus “is back to when I joined and that’s to unlock partnerships. We are now looking outwards to unlock value for partners. We are looking for inorganic growth – through mergers and acquisitions – and acquire targets but that’s relatively difficult. There are not too many targets around,” he said.
An IPO is still the plan. “At some point, this will happen – it’s a journey and we will keep planting flags along the path. It’s down to the timing, and we are not in control. We need the IPO markets to be strong and right now, that’s non-existent. We need the global financial markets to stabilise.”
Meantime, Traveloka will look for areas where it can grow and play in. “One is the B2B space, another is corporate travel. AI has changed the game even more. In the area of fintech, there is a sizeable amount of growth left. We have a few products working well.”
He said the trend of price freezes ala Hopper and subscription models like KabuK Style in Japan is “coming rapidly”. “We are seeing industry-wide adoption. We have willing buyers and willing sellers. Winners are those can get the data right. That’s why we want to own the use case.”
Traveloka offers consumers in the Thailand and Vietnam markets the option to freeze flight prices. They can lock flight prices for a few days with a small upfront fee – the amount depends on the freeze duration and flight price. Most users choose to lock prices for three days, while the average upfront fee is US$2.
“This gives our customers more opportunities to secure the best deals, as airfares are subject to fluctuations depending on supply and demand. Prices may increase due to the lack of available seats or a sharp rise in fuel prices. We encourage bargain hunters to keep a regular lookout for ongoing promotions and exclusive deals to secure a great price. While there is no bulletproof way to secure the best deals for flight tickets, being proactive will reap benefits as prices will most likely surge during peak seasons like school holidays – so we want to support our customers who want to be there to lock in the price drop.”
Referring to some comments that have been made that “OTAs should be like banks”, Joydeep said, having been a banker, he disagreed. “The graveyard of banking is very big, there are lots of dead bodies. It is a difficult industry. There is a reason why brands like JP Morgan and DBS are still there and it’d be foolish for OTAs to think that because they know tech, they can act like banks.”