EQUATOR: The true B2B marketplace for tourism sector

Tourism is one of the world’s largest sectors, which includes the hotel industry, transport and several other industries. The tourism sector worldwide generated nearly two trillion US dollars in 2022 despite a very strong recovery (versus six trillion US dollars in 2019).

Fred Seow left for Hawaii to study engineering but left the islands 5 years later with a degree in Travel Industry Management. He has now spent over three decades in hotels, aviation and OTA industries, in sales & marketing and operations and was based in several countries. His experience enriched the depth and breadth of his knowledge of the needs and challenges of different industries.

TD spoke with Seow about his company Equator, a B2B marketplace for the tourism sector enabling all companies across different industries and segments to trade securely, directly and efficiently.

Travel Daily Media (TD): What was the idea behind your company? What is the problem that your company is trying to solve and how did you come across that problem?

Fred Seow (FS): Direct sale is every company’s top priority but is time-consuming and resource intensive. Third-party channels are useful but also a double edge sword when they act as sales intermediaries. It has become costly to maintain and police the activities of a portfolio of third-party platforms. There is a lack of customer ownership in most channels and control over the supply chain is lost. The extent of overlap in targeted markets and audiences is immeasurable. The channel mix for many operators today is largely imbalanced.

Our goal is to create a platform for all operators to sell online and direct to more companies across the nine industries in the tourism sector. We highlight direct sales because our fees are transaction based with full customer ownership. We believe this model also helps users improve their profitability and procurement efficiency, by buying directly from more operators regardless of location or business volume with more accurate content.

Technology and business principles are our twin action pillars. We operate a direct-from-operators-only platform instead of multi-source. We promote transparency of buyers to sellers as we believe this clarity, blocked by most third-party channels, is crucial for business relationships, growth and loyalty. To grow multiple source markets and travel segments, we created MSP (Market Segmented Pricing) system as a multi-purpose, multi-functional and adaptive pricing system for operators to promote dynamic pricing by markets, industries, business and travel segments. MSP also enables parties to initiate private rate negotiations online and load agreed prices and inventory into the system, a first in the market.

We encourage participants to buy and sell on Equator. Many product operators aspire to be one-stop but face expertise, time and process issues. Equator provides the mechanism to self-bundle including other operators’ products, a platform to market, fulfilment and payment to other operators. When participants buy and sell, they not only enhance their value propositions, but their contra accounts also reduce banking fees.

TD: What are the advantages of using Equator?

FS: Control in direct pricing eliminates diluted and inflated prices which often happen in long supply chains and highly competitive markets. Our transaction fee model helps operators save up to 70% of online sales commissions. Distribution and connection costs can be avoided while marketing costs are reduced by up to 80% as they gain from our first-mile engagement activities and shared resources model.

We follow international online protocols for users to be familiar with our system. Hotels can connect via over 50 channel managers while our flight engine adopts the latest NDC technology to API with airlines.

TD: How is Equator different from traditional online channels and platforms?

FS: We think an alternative platform model is timely in today’s high marketing and operating cost environment. Our low transaction fee format is enhanced with best practices of OTA, GDS and offline travel agents who are excellent product bundlers. We use technology to integrate the values of different practices into applications that benefit all parties. Applications that can unlock product values instead of focus on selling price. There are various marketing options by travel segments to increase their share of voice. We will launch a module for different operators who target the same audience to co-market by themselves. This is very powerful for players of complementing products and destinations.

Our first product initiative named Industry ID is for all personnel in the tourism sector to book direct with operators for personal consumption. We are the third largest sector, providing 1 in 4 jobs, a sizeable 330m+ workforce worldwide. We ought to create benefits for each other for being in the same sector. Due to work nature, our personal trips tend to be off-peak. From a marketing perspective, our word of mouth is the best form of advertising. If tourism grows 6% CAGR next 10 years as projected by WTTC, such benefits can only increase the attractiveness of our industry for more talents.

TD: What are the best and worst aspects of the travel industry in your opinion?

FS: We are a very resilient industry being most exposed to external factors beyond our control. We always bounce back with more creative solutions and exciting experiences. I think the industry’s response to the recent pandemic will be the most expansive thus far.

However, we remain a very complex business, inter and intra industries. More systems operate in silos which increases distribution costs. Greater success is hampered by ownership issues. Collectively, in our attempts to outbeat competition, we also create many duplications and consequently much wastage.

TD: What is your goal for the product for the next 3 years? How will you get there?

FS: As a multi-faceted value-added platform, I think Equator occupies a neutral position in the industry, one which protects all parties’ interests. As we get established as a catalyst for buyers, sellers and inter-industries, I hope to unlock more values, develop more synergies, and create new business opportunities for all stakeholders. We will reach out to like-minded organisations, public or private, to share our values and ambitions. We can enjoy the travel pie together as it grows again.