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November 23, 2005 


 Q&A: George Deeb, CEO of iExplore in Chicago, on Online Adventure Travel 11/8/2005
The mission of Going Global, which appears on ePrairie on most Tuesdays, is to educate and inform Midwest technology companies on what local technology companies are doing internationally so other firms can learn from the successes of like-minded peers.

CHICAGO – George Deeb is the founder and CEO of iExplore, a Chicago-based Internet company aimed at the growing trend of adventure and experiential travel.

In this capacity, Deeb has assembled a Fortune 500 executive management team, secured all rounds of VC funding and established partnerships with adventure tour operators and related content and commerce partners (including National Geographic, which acquired a 30 percent stake in iExplore in August 2000). He is responsible for all operating, financing, marketing, technology and editorial decisions.

Prior to iExplore, Deeb was a vice president in the investment banking department of Credit Suisse First Boston where he was a specialist in consumer retailing. An avid adventure traveler, he created iExplore as a solution to the hardships he encountered in planning and booking his own adventure trips around the world.

Some of his favorite trips have included summiting Mt. Kilimanjaro, trekking through the Swiss Alps, diving in Belize and kayaking and glacier climbing in Alaska. In part one of a three-part Q&A, he sat down with international expert Michael Muth to discuss online adventure travel, which Deeb says is the fastest-growing segment of the travel industry today.

Michael Muth: What are the demographic characteristics of your customers by continent and language?
George Deeb: The fact that we’re an Internet-driven business dictates where our customers originate. Most are Americans who travel overseas. About 70 percent of our Web site traffic is from the U.S. The rest is splintered from many countries of the world (most prominently including the United Kingdom, Australia, Canada and other English-speaking countries). Others engage with us in English.

MM commentary: I have no doubt that 70 percent of iExplore’s traffic comes from the U.S.. This mirrors Internet penetration statistics. According to InternetWorldStats.com, though, North America only accounts for 23 percent of worldwide Internet users. The fact that iExplore is an Internet-driven business means it’s missing 77 percent of worldwide Internet users.

MM: What percent of your community members come from outside the U.S.?
GD: The community mix and general Web site traffic mix are the same.

MM: How else do community members connect while they’re abroad?
GD: It’s less about engaging in real-time (like posting photos or looking for a travel buddy) than looking for help. This type of travel is very research intensive in terms of the destinations, visas, vaccinations and warnings. By the time they’ve left, they’ve done the research in advance. We do provide call-center support services so they can make changes along the way, too.

MM commentary: I understand that the iExplore Web site enables a lot of research, but given how connected people like to be these days, offering e-mail and voicemail access while away could be valuable service enhancements as well.

MM: How do you choose and qualify the trips you offer?
GD: Where we go is demand driven based on the calls and e-mails we receive. As for the suppliers we work with, we talk to the local tourist boards.

They narrow it down to the right quality level and we interview the local operators. We send our staff on these trips to kick the tires for the right quality control. We target the luxury end of the market but at a 25 percent discounted price. We have a very affluent audience. We offer five-star tours for less than another U.S. tour operators.

MM: What are the favorite activities and destinations of your customers?
GD: We’re in the world wonders business (manmade and natural). While the term “adventure travel” has taken on different meanings for mainstream travelers, it is the fastest-growing segment of the travel industry today.

MM: What are iExplore’s most profitable activities and destinations?
GD: For the most part, it’s roughly the same whether it’s an African safari or European river cruise (with a few exceptions). In Egypt, the costs are low relative to what Americans are willing to spend. In Europe, the euro is high and our costs are higher. We don’t earn as much there. Certain markets are slightly higher and other markets have slightly lower margins.

MM: What are the new and emerging adventure travel destinations?
GD: The die-hard adventure leaders are looking for the next destinations that are the most interesting. When we get enough of those calls, that’s how we get ahead of the curve. Syria, Honduras and Libya will be hot in the next few years.

Syria is a country that was at the crossroads of many different civilizations (the Greeks, the Romans and so on). There are a lot of ruins and there is a lot of religious history. It’s a part of the holy land (including one of the first cathedrals ever built). It offers fabulous people, food and cultures. I went for the first time this year.

The American mainstream media have been very negative about Syria. The reality is that it’s a safe, friendly and exciting country. Syrians say Americans don’t understand that 90 percent of Syrians have relatives in the U.S. They live and aspire to the American way of life. I’d highly recommend it. It was a spectacular trip.

The American reaction to world events has changed over time. After 9/11, they went into a shell and they stopped traveling. After we’ve learned to live with terrorism (or SARS, the avian flu or a train in Spain) as a way of life, we’ve become smarter where we choose to vacation, which varies with world events.

MM commentary: The real progressive way to do it would be to explore your own destinations and brand them before anyone else gets there. Still, that would be speculative and risky and it might not pay off.

MM: From where does content for your travel guides come?
GD: We contract with experts in publishing. This year, we’re working with Columbus Guides out of the United Kingdom for 223 countries and 100 world city guides. We put it out for bid. Though we do produce some destination features as rotational content, we’re not in the publishing business. We’re in the commerce business. We rely on those editors to do their jobs.

MM: How do you help your customers learn about the cultures of the destinations they’re visiting?
GD: Before we sell a trip, we make sure they know what to expect in terms of the people, the culture, the customs, the tipping, what to do and what not to do as well as how to act and behave. That’s usually provided by our sales staff. We use our tour guide pages on our Web site to provide the three legs of the stool: the content to inform them, the commerce to get them there and the community to share information.

MM commentary: Though the opportunity to provide this information is there, my impression is that iExplore travelers go on these trips more for the adventure experience than the history, geography or political science lesson.

MM: Why have some travel features been archived?
GD: It’s not that they’re no longer relevant. They just don’t have a place in the site anywhere else. Feature countries, for instance, change from time to time, but we keep them there so people still have access to it.

MM commentary: Unless you look for this content on their Web site, it can be difficult to find.

MM: Why haven’t you localized iExplore to attract customers who speak other languages?
GD: There are two things in globalizing our business. First, we need to change the call center so we have fulfillment speed in real-time. This is key so the call center is open for all customers. For someone in Italy, there are only a few hours when our time zones overlap. iExplorer’s call center, by the way, is located in downtown Chicago.

Second, trip content would also have to change. Someone here would spend “x” to go to the Grand Canyon and more money to go on an African safari.

Long-haul American trips could be short haul for Europeans. For customers from other countries, there would have to be different trips that appeal to different markets at different prices. Budgets in foreign markets are typically less. The profit is there. We’re walking before we run. There could be partners for us to do this, tour operators and call centers in several countries.

MM commentary: This could be a major area of opportunity for iExplore. I have friends in Europe who are adventure travelers and I’m sure there are many more. I’ve got to believe there are major markets in most of the developed countries of the world. The position in the U.S. could provide great leverage in serving these additional customers.

MM: How do you evaluate the success of your branding?
GD: When we launched, we were a travel agent for other products. We aggregated tours for other people. Over time, we’ve built our own line of tours. After 9/11, we focused on margin because we lost volume. We started to replace third-party tours with our own, branded tours. Our own private-label tours have grown to 80 percent of our mix.

People trust us for these kinds of trips. The other measure is growth in word of mouth. Repeat sales are 40 percent of our mix over the last two years. Traffic is growing on our Web site. We’re still winning awards. We get unsolicited PR mentions. That all enhances our margins. We doubled the 15 percent travel agent commission we earned to 30 percent margin on our own tours. That evolution helped our profitability.

We don’t compete on an itinerary-by-itinerary basis with our competitors. Their expertise is different than ours. They’re complementary.

Michael Muth is managing director of GATA, an international business development consultancy that helps technology companies build international partnerships. He can be reached at mike@intlalliances.com.
Click here for Muth’s full biography.

Previous Columns:
Q&A: Steve Pazol, CEO of nPhase in Chicago, on International Business (8/30/2005)
Q&A: Steve Pazol, CEO of nPhase in Chicago, on Outsourcing to India (8/23/2005)
Q&A: nPhase CEO Steve Pazol on Machine-to-Machine Service Industry (8/17/2005)
Q&A: Daitan Labs Founder James Bergamini on Brazilian Workers (8/2/2005)
Q&A: Daitan Labs Founder James Bergamini on Brazil’s Silicon Valley (7/26/2005)
Q&A: Daitan Labs Founder James Bergamini on Next-Generation Telecom (7/19/2005)
Q&A: Op2mize Founder Geoffrey Kasselman on Asian Advancement (6/28/2005)
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Q&A: Manpower CEO Jeffrey Joerres on Changing European Regulations (5/31/2005)
Q&A: Manpower CEO Jeffrey Joerres on Comparison Between U.S., France (5/17/2005)
Q&A: Federal Reserve Bank’s William Testa on Cautionary, Hopeful Prospects (5/3/2005)
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Q&A: Lisle Technology Partners CEO Adarsh Arora on Keys to Outsourcing (4/5/2005)
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