Neil Waller and James Street are living the dream. The university dropouts spend 250 days out of every year jet setting. But this is a backpacking tale with a difference. Proving there’s still room in the crowded online travel market to carve out a niche, MyDestinationInfo.com, their network of online travel guides, is taking the industry by storm, offering a fresh alternative to globe trotters, and reminding the big players not to rest on their laurels.
It was while studying at Bath University that the business concept was conceived. Neil and James spent seven months planning a concierge service in Marbella as part of their business degree, but after dealing with too many difficult members of the public, they decided their plan was more trouble than it was worth. Their extensive research had, however, alerted them to the lack of quality travel information about the resort, resulting in a new idea for an online travel resource. “We went out to Marbella during our summer holiday and immediately signed up 33 clients, so our concept kind of exploded,” recalls Neil.
Clients ranged from restaurants to hotels, bars and leisure clubs. Neil explains that the level of initial response was a huge shock because the original site looked terrible. However, they believe their lack of technical experience worked to their advantage. “We look at our site from a user’s point of view, whereas if you come at it from an IT background there is a danger of getting lost in the technicalities,” Neil says.
With a market already teeming with online travel guides, you’d be forgiven for questioning their idea. However, theirs is a unique franchise model of individual sites for different destinations, each one run by a local person on the ground. “We came up with the concept of franchising while sitting in a beach-front bar. We needed to try and recreate the idea of local people who are passionate about their area.” So, after Marbella, their next stop was the Algarve in Portugal.
Initially, the business was financed with just £600. “The beauty of the internet is that there are such low barriers, and the nature of franchising is that it is cashflow generative – people pay you up front for their licence fee.” Franchisees pay between €15,000 and €40,000 for a five-year contract, depending on each individual destination, and they then pay royalties on their revenue, which vary according to each site. At present there are 70 franchises, growing by one or two per week.
Until recently, MyDestinationInfo.com was fairly unheard of in the travel scene. Neil and James deliberately kept the business under the radar as they tried to expand and sell franchises. “We didn’t want to market as a brand until we were ready; there’s nothing worse than going too early, plus we didn’t want competitors to know what we were up to.” It proved a savvy move. With a number of global brands to contend with – Expedia, Lonely Planet and Timeout to name but a few – competition is fierce. But what pleases Neil and James most is that, according to statistics on Alexa, MydestinationInfo.com trumps its competitors on page views per user, time spent on site and bounce rates. “We can see that what we’re doing is working. We can’t beat them on volume yet but people on our site are using it much more,” says Neil.
Since hiring a PR agency in September, MyDestinationInfo.com has announced the completion of a funding initiative, raising half a million pounds, while releasing 10% in equity. An important chunk of the cash will now be ploughed into extensive search engine optimisation (SEO), now that the project is well and truly out of stealth mode. However, what’s special about this finance scheme, is that the shareholders are all franchisees of the company. “We wanted to offer shares to our franchisees because we loved the idea of giving them a little more out of what they’re doing,” Neil explains. The funding round also gave the company an impressive £5m valuation.
Despite the relatively rapid growth of the business Neil admits the art of persuasion had to be used skilfully during the early days. “Selling franchises for a completely online business was almost unheard of when we launched, and being two university dropouts with no track record was a real problem.” There was also the major financial drain of running a business that required extensive travelling. “Financially we were always fighting an uphill battle, always draining the business to the wire – it’s only in the last year that we’ve seen the fruits of all that hard work.” In fact, during the first two and a half years, there were five or six occasions when the pair nearly walked away from the venture when cashflow troubles nearly left them grounded.
Today, MyDestinationInfo.com is fast becoming the one-stop-shop in travel. The individual sites not only offer reliable travel information, but also user reviews of locations and facilities, booking services and multimedia platforms where users can interact with one another and discuss the destinations and services. Last year the business turned over £500,000, and with that figure already behind them this year, the company is on course to more than double that by the year end. The future certainly looks bright for Neil and James who are well on their way to achieving their ultimate goal. “We want to become the dominant player in the travel industry.”