Amid a global pandemic, the startup Snaptravel saw its highest ever completed booking rate per week ... [+]
Marie Labrosse, a master’s student in English Literature at McGill University contributed to this story.
The novel coronavirus pandemic dealt a devastating blow to the travel industry. For a time, the AI-commerce startup Snaptravel was no exception. The Toronto-based company uses conversational AI to help its customers book hotels via messaging apps like Facebook Messenger, iMessage, and WhatsApp. By the end of March, their bookings had dropped by 80 per cent and they were scrambling to keep up with customers’ questions and requests to cancel bookings. But only two and a half months later, they reached their highest-ever rate of completed bookings per week.
Snaptravel’s recovery is no mystery. Its co-founders, Hussein Fazal and Henry Shi put effort and thought into keeping their business alive through the crisis. They outlined their major steps to profitability in the midst of a global pandemic in a 10-step playbook which has received close to 1,000 reactions at the time of publication.
Their origin story is also a testament to the co-founders’ dedication to creating a successful enterprise. Fazal and Shi met while the latter was working as a software engineer at Google, taking a “sabbatical” from entrepreneurship as he likes to call it. Shi felt that his previous venture had lost sight of his mission and he needed to hit reset before starting something new.
He was particularly resolved to find the right co-founder with whom to launch a new business. Almost every day after work, he would meet or call prospective collaborators to discuss common beliefs and goals. Shi met Fazal six months into his time with Google and they spent another 6 months brainstorming ideas for a business. When they eventually took the leap and became partners, they still didn’t know which industry or vertical they would be working within. To get the business off the ground the team was more important than the product itself.
“Good teams work things out,” Shi said. “A lot of things change at a startup. People will try one thing but realize that there is no market for, so eventually they have to pivot and change.”
Initially, Snaptravel wasn’t quite the same product as it is today. At first, it more closely resembled a concierge service with strong natural language processing (NLP) capabilities that was able to take very specific requests from customers and present them with the best hotel option.
However, as customers interacted with the product, Fazal and Shi saw that that wasn’t what they were looking for. Customers wanted to be presented with multiple options spread across a sliding scale of prices. Now Snaptravel presents users with a carousel of different hotels that they can choose from themselves as well as a map of other relevant options in the area.
In response to the pandemic, Snaptravel has modified its interface to display cancellation policies ... [+]
The engineering and corporate flexibility that has been at the heart of Fazal and Shi’s project since the start has been key to their ability to survive the pandemic. Their first step in responding to the crisis was to remove distractions and set a clearer direction for the company. Under this new vision every project had to contribute to profitability; if a project did not contribute to making the business profitable in the immediate to short term, the company didn’t need to be distracted by it during this emergency. This focus combined with a robust understanding of their market enabled a startup concerned predominantly with growth before the pandemic to become profitable within 60 days.
“We felt positive that because we had such good data and understanding of the levers of the marketplace we would be able to steer the ship through that moment.”
However, the efficiency of Snaptravel’s mission required that they lay off some of its core staff. No matter how necessary, the decision to reduce staffing was “heart wrenching” according to the founders’ online playbook. To alleviate the blow, they doubled severance payments, extended benefits, and made it easier to exercise stock options. Snaptravel also benefited from the Canada Emergency Wage Subsidy, which allowed them to keep more staff on payroll than they otherwise would have been able to.
To respond to their customers’ new habits and concerns Snaptravel adapted its product’s performance. They put in place clearer cancellation policies that warned customers about the timelines within which they could get a full and partial refund. They encourage hesitant clients to speak with a live agent who can act as a sounding board. The platform is also better equipped to handle the spontaneous bookings that customers are making during this uncertain time and it suggests destinations closer to their billing addresses to account for their current travel patterns.
Snaptravel’s tenacity and adaptability have instilled the co-founders with confidence that the business has a bright future ahead. Now that they are in a position to hire new staff, they are placing more focus on potential new applications for their AI technology.
“It’s very extensible outside of just hotels,” Shi said. “That’s what we’re focusing on now; there’s lots more we could do with this technology. We’re looking at other verticals.”
