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November 23, 2005 


 Q&A: George Deeb, CEO of iExplore in Chicago, on Competitive Distinction 11/15/2005
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.

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.

In part two of a three-part Q&A, Deeb sat down with international expert Michael Muth to discuss how he believes iExplore has distinguished itself from its competitors.

Michael Muth: How do you define “leading online seller of adventure travel”?
George Deeb: In terms of Web site traffic, we have the largest number of unique visitors. Other bigger companies have smaller Web sites, but in terms of online presence and share, we’re the biggest.

MM commentary: While many claim to be the biggest and best at what they do, it all depends on how you define it. iExplore seems to be able to back up its claim.

MM: Can you give specific examples of corporate adventure or experiential travel?
GD: The incentive travel business is sizable and has been around for years. There’s a lot of demand for those types of programs. Of the $23 billion incentive industry, $8 billion is spent on travel. Historically, it has been group-driven events and largely domestic, mainstream programs.

Over time, the recipient of that award is now interested in doing something more interesting and different. They want an individual trip rather than a group trip. It’s more meaningful to have a gift certificate from us. It’s growing with unique itineraries. They want it individually focused and catered to them.

MM commentary: My dad worked in the incentive travel business. He made a good living and had a lot of fun doing it. He’d sell the trip, earn the commission and then work out the details of the trip. It wasn’t a bad deal.

MM: What are the business benefits of these activities?
GD: The corporations have multiple goals on how to use travel. It could be as simple as an annual meeting and to increase attendance. They hold it at an interesting destination.

Teambuilding requires no sales goals associated with the reward. The company had a great year and wanted to improve the morale among the senior management. It’s completely social. “We just want to build the team,” they say. In consumer promotion, you want to grow your prospect list and you use travel as a sweepstakes giveaway to get more customers.

MM commentary: When used appropriately, these programs can be powerful motivators.

MM: How do you differentiate yourself from AdventureTravel.com, TrekAmerica.com, etc.?
GD: AdventureTravel.com is a mainstream travel agency that acquired the URL to get more traffic with little expertise in adventure travel. They’re just trying to sell cruises, Disney World, Vegas, etc. TrekAmerica.com is a tour operator that specializes in hiking tours. We don’t really consider either of them direct competitors.

MM: Other adventure travel vendors offer trust, experience and adventure? What else differentiates you?
GD: Historically, our competition has been traditional wholesale tour operators. Now our competition is anybody that can be found under “adventure travel” on Google. You’re comparing two-star trips with five-star trips. It’s very confusing the sea of websites people can land on. When you’re 100% online, a large percentage of our traffic comes from the search engines.

Most package tour operators sell groups and the customer has to take it or leave it. We sell independent travel. We give a consumer an itinerary but let them change the hotel, the dates, etc. We can customize it to your needs. We focus on the luxury end of the marketplace. We’ve built the breadth of the whole world on one site. Many competitors specialize either in one activity or one country.

We offer more than 100 countries on one Web site. We try to offer an itinerary in every country that is sellable. We won’t have itineraries where it’s not safe or the infrastructure isn’t there (such as an American-style hotel, the stability of the country or the comfort level). We move destinations in and out depending on what’s going on in the world. It’s not just when the U.S. State Department takes down their warnings.

In Zimbabwe, the warning went up in Harare (the capital), which is hundreds of miles from Victoria Falls (the main adventure destination). We took it down while we researched it.

We found the rebels weren’t targeting tourists so we opened it up again. We took Harare out of the equation. When warnings are in place and a consumer wants to go, we give them the pluses and minuses and let them make their own call. In Nepal, they are targeting tourists. Though it’s not a great time to go there, people still want to see Mount Everest. They sign the waiver, we disclose all the issues and people still go.

MM commentary: iExplore’s competition for American consumers is primarily other American tour operators. Though their differentiators are similar, they’re not as differentiated in the minds of potential foreign customers as they are with American customers (i.e. foreign adventure travelers might not be interested as much in American-style hotels).

MM: Travel agents are getting squeezed out of the travel industry. Where do they fit with you?
GD: We don’t distribute our product through travel agents. The only place you’ll find us is on our Web site or our partner Web sites. Yes, they are getting squeezed. We’re not losing sales in that business because we weren’t there in the first place. We’re gaining as consumers go to the Web so long as we’re doing well with search engine optimization.

MM: How do you work together with other travel service providers, airlines and tour operators?
GD: We are primarily in the business of selling land packages. We’ve researched the itinerary and ground packages. We provide more of the marketing than the travel logistics. There is no equity involved. About one in three people inquire about air. Of those, one-third or 10 percent of the original total buy air from us as well. We work with airline consolidators who can give us better rates than published fares.

MM: How do you work together with potential competitors like Fodors, Frommers and Travelocity?
GD: We partner with logical distributors for adventure tours (like publishers and other Web sites). We build our trip finder into their Web sites with their look and feel. If you search for adventure tours on their sites, you’ll find our tours. We’re essentially OEMing our site to them with a revenue share.

MM commentary: This is a great revenue stabilizer that embeds them against competition.

MM: How do you find and work with local guides?
GD: We partner with in-country ground operators who put on our hat that day. We rely on our in-country partners to hire quality staff. Still, we differentiate on price, flexibility and individuality.

MM commentary: So even though an iExplore adventure traveler is managed by the same guide as with other tours, the sell is that you still get a customized trip at a better price.

MM: What is iExplore’s role if a customer has an emergency while abroad?
GD: There are two contact points. First, they have access to our call center. Second, they know in-country people for 24-hour support. If they’re really in a jam, they have local embassy numbers. Most travelers buy travel insurance to cover medical emergencies.

MM commentary: I’m surprised iExplore isn’t more involved in addressing these safety issues. Still, that’s not their business.

MM: Do you have an offline presence? If not, how did you survive the bubble bursting?
GD: Our call centers are offline. We don’t just put up Web pages, grab credit card numbers and charge away. It’s a two- to three-week sales cycle with experts on the phone who have been there.

We try to develop a personal relationship over the phone. It’s kind of ironic, actually. Most companies are trying to figure out how to get people off the phone. We try to get them on the phone. When we get away from impersonal Web pages, we establish trust. Our phone close rate is three times higher.

We launched in February 2000. The Internet bubble burst in March 2000. We had to shift gears quickly away from spending marketing dollars.

We survived by piggybacking on the coattails of National Geographic. Our association with National Geographic did wonderful things for our business. We drove conversion rates up and we got our sales up as we went from an unknown infant company to a known tour operator. We cut our expenses and marketing plans and piggybacked on a leader. We had to be nimble from day one.

MM commentary: This is a great example of being quick on your feet, recognizing the problem and acting on it in real time. It’s also a fine example of using partnerships from the outset to build a business.

MM: How much has iExplore grown in terms of revenue and employees?
GD: We’ve grown to serve a couple thousand passengers per year. Launching has been a real roller coaster ride.

We’ve had to deal with 9/11, war, SARS, terrorism, etc. We’ve had to navigate a lot of things. We architected the business over and over again. Our growth rate is 35 percent to 40 percent a year. From travel agent to tour operator has been one evolution. A focus on advertising sales has been another evolution. That has been a lucrative stream. Even if the travel operating revenues go up and down, the advertising revenues smoothes it out.

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: George Deeb, CEO of iExplore in Chicago, on Online Adventure Travel (11/8/2005)
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)
Q&A: Op2mize Founder Geoffrey Kasselman on Findings From Asia (6/14/2005)
Q&A: Op2mize Founder Geoffrey Kasselman on Analog, Smart Buildings (6/7/2005)
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)
Q&A: Federal Reserve Bank’s William Testa on Chicago Business (4/26/2005)
Q&A: Federal Reserve Bank’s William Testa on Headquarters, Exports (4/19/2005)
Q&A: Lisle Technology Partners CEO Adarsh Arora on Keys to Outsourcing (4/5/2005)
Q&A: Lisle Technology Partners CEO Adarsh Arora on Outsourcing in India (3/22/2005)
Q&A: Lisle Technology Partners CEO Adarsh Arora on Offshore Outsourcing (3/15/2005)
Q&A: CEC’s David Weinstein, Kapil Chaudhary on International Experience (3/1/2005)
Q&A: CEC’s David Weinstein, Kapil Chaudhary on Internationalization (2/22/2005)
Q&A: Brian Briggs of Acclaro on Whether to Outsource Localization (2/8/2005)
Q&A: Brian Briggs of Acclaro on the Complexities of Localization (2/1/2005)
Q&A: Brian Briggs of Acclaro on International Localization Services (1/25/2005)
Q&A: RPX’s Robert Okabe, IEC’s John Janowiak on Global Events (1/11/2005)
Q&As: FastRoot’s Terry Howerton, Doug Cogswell of ADVIZOR Solutions (1/4/2005)
Q&A: Opportunity International’s John Kamperschroer on Partnerships (12/21/2004)
Q&A: Opportunity International’s John Kamperschroer on Technology (12/14/2004)
Q&A: Opportunity International’s John Kamperschroer on Innovative Financing (12/7/2004)
Q&A: IEC Senior Director John Janowiak on Trade Show Realities (11/16/2004)
Q&A: International Engineering Consortium Senior Director John Janowiak (11/9/2004)
Q&A: Founder John Lee of Chicago’s Hostway on Web Site Localization (11/2/2004)
Q&A: Founder John Lee of Chicago’s Hostway on Growing Globally (10/26/2004)
International M.B.A. Guide to Moore School of Business, Thunderbird (10/12/2004)
Your International M.B.A. Guide to Northwestern, Loyola University (10/5/2004)
Entrepreneur’s Guide to International M.B.A. Programs in Chicago (9/28/2004)
Q&A: Prairie Angels Founder Bob Okabe on Diction, International Cities (9/7/2004)
Q&A: Prairie Angels Founder Bob Okabe on International Adaptation (9/1/2004)
Q&A: Prairie Angels Founder Bob Okabe on Managing U.S. Subsidiaries (8/24/2004)
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Q&A: Origin Ventures Founder Steven Miller on the Canadian Way (8/9/2004)
Q&A: CPCP Founder David Baeckelandt on Multilingual Importance, Mentoring (8/3/2004)
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Q&A: Chicago Pacific Capital Founder David Baeckelandt on Overseas Funding (7/20/2004)
Q&A: ADVIZOR Solutions CEO Doug Cogswell on the Art of Partnering (7/13/2004)
Q&A: ADVIZOR Solutions CEO Doug Cogswell on BP, AstraZeneca Wins (7/6/2004)
Q&A: ADVIZOR Solutions CEO Doug Cogswell on Global Software (6/29/2004)
Q&A: CEO Terry Howerton on Why Chicago, Ukraine Made FastRoot (6/22/2004)
Q&A: FastRoot CEO Terry Howerton on Blended Chicago Approach (6/15/2004)

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