Jack Jenson, CEO at SleepOut. Image supplied.
HumanIPO caught up with Johann Jenson, chief executive officer (CEO) of Kenyan accommodation site SleepOut, to talk about the company’s plans for expansion after it recently secured US$200,000 of funding from Africa Media Ventures Fund (AMVF).
HumanIPO: Since the rollout of Sleepout.co.ke what has been the response from members of the public?
Jenson: I launched Lamu.org on Lamu Island in 2010 but since we finally launched SleepOut.co.ke in mid-2012, we have witnessed an overwhelmingly positive response to our accommodation booking service. Many users simply did not know that Kenya had so many incredible places to stay.
What started out as a simple hobby taking photos of beautiful holiday homes and hotels on Lamu Island has grown into a community of hosts and guests making independent travel in Kenya far easier.
One of our aims is actually to change the way the international community thinks of travel in Africa. It’s important that the world knows that Africa has far more to offer than tour operator-organised safari trips and all-inclusive beach packages.
By making accommodation accessible and affordable we are growing a dedicated and passionate following of modern travellers.
This April-May low season in Kenya we have actually recorded almost twice the booking requests we had in the December high season so we must be doing something right.
We’re also getting great feedback from the public and we look forward to launching the all new SleepOut.com later this year.
What has been the balance of locals to foreigners in the use of the site on the continent?
Western Europe, the Middle East, Asia and South Africa are SleepOut’s most important feeder markets although residents are still key.
Our userbase is split 60 per cent resident, 40 per cent foreign, but as the site gains traction and with the launch of SleepOut’s travel magazine NOMAD we are seeing a steady move towards more international users.
How fast are local hotels and other providers of accommodation accepting your partnerships?
At first it was slow moving. It’s a chicken and egg problem. If you don’t have enough traffic, accommodation hosts won’t take you seriously and are reluctant to sign up for your service – even if it is free to get started.
It took us a good six months before we were able to really build strong relationships and earn the trust and respect of many accommodation hosts in Kenya.
Over the past three months we have noticed a dramatic increase in interest from new hotels, lodges and holiday homes within Kenya and the rest of East Africa that we did not even know existed.
Now when a hotel, lodge or holiday home in Kenya decides to launch, SleepOut is one of the first places they look for distribution and marketing.
What are customers looking for?
Travellers on SleepOut are looking for value, choice and efficiency like in most industries. With so many options out there they use SleepOut to sift through hundreds of accommodation options, find inspiration if they’re not sure where they would like to go, read travel stories on NOMAD and ultimately search for the absolute best deal.
Although price is most important in the discovery process, we are finding that modern travellers also want to ensure that they are going to enjoy a unique experience and often they are willing to spend a little more if they trust that this is going to happen.
Obviously user reviews and friend recommendations go a long way in achieving this, which is also why the new SleepOut.com will have a very strong focus on social media and user-generated recommendations.
What are some of the important trends that you have discovered from customers using online booking?
We have noticed that many residents of East Africa tend to prefer to confirm their booking details over the phone before paying online. Because e-commerce has not been around very long in Kenya, there is still a way to go for online businesses to earn the trust of users.
Simply re-assuring guests that their booking is taken care of over the phone helps guests trust in the service.
On the content side we have noticed a lack of genuine and unique content on travelling and finding accommodation in East Africa.
In trying to nurture a culture of independent travel we started an online magazine to provide context to the experience as told from the perspective of travel bloggers and SleepOut guests. The uptake in terms of search engine traffic and booking requests has been impressive.
What are some of the biggest opportunities you find in the country and continent when it comes to online bookings?
Accommodation prices in Africa can at times be completely out of sync with reality. Anyone who has visited South America or Asia knows this far too well.
Many accommodation hosts in Africa have very low occupancy rates sometimes hovering around 25 per cent and this in turn forces them to raise their prices further compounding the issue.
Our aim is to match guests with hosts and their empty beds in order to increase efficiency in the accommodation market and hopefully in the process stabilise prices.
What are the challenges confronting the players in the tourism online space?
Online hospitality is a fascinating space because of the diversity of players. We have come across so many eccentric and brilliant characters on our journey but that’s half the fun. The new kids are always treated with a little disdain especially if they are shaking things up.
It’s a highly competitive environment, but it also rewards companies that are willing to innovate and try something different. Our experience has been that the initial learning curve is steep.
Barriers to entry in the industry are not terribly high, but success also does not come quickly. To achieve growth you need to be patient, work closely with and be respectful of the dominant players, be very aggressive where it counts and most of all stay humble.
How can you say the smartphone revolution has affected your business?
Smartphone traffic represents a very small portion of our business, yet we also have not yet fully taken advantage of the opportunities that lie here.
It is one of the areas where we are focusing our attention as we see opportunities for integrating some pretty cool last minute booking and geolocation discovery features.
What are some of the prospects in the coming years?
SleepOut is in this for the long run and have set an ambitious road map for the next 12 months, which includes expansion into 10 countries across Africa and the Middle East.
Besides moving into our new office in Nairobi next month, SleepOut.com will be officially launching later this year.
In a complete re-write of our existing Kenyan BETA site, we feel the new platform will be extremely powerful in terms of scalability and functionality. We are also in the process of putting together our first Series A investment round by the end of 2013.
