Biggest challenge for travel sector post-lockdowns is lack of staff

Rome2Rio survived Covid-19 and its CEO says it’s ready to keep scaling up as travel reopens.

Yesh Munnangi’s expertise is in managing the transition of companies that have been run by their founders for years before being sold – and in the process scaling up the operation for bigger volumes and returns.

With experience in Amazon’s EU operations before spending four years in Berlin with German global travel comparison and booking site Omio, he was keen to apply his skills to local site Rome2rio when he arrived here in January 2020.

A couple of months earlier, the “multi-modal travel planning site” launched in 2011 had been sold to Omio (for a cool $40m) and Munnangi had landed the task of taking it to the next level.

Covid-19 detonated those plans and the new chief executive found himself managing 40 passionate staff – primed for the chance to build Rome2rio with the help of extra Omio investment – who faced working from home and dramatically reduced options.

More than two years on, Munnangi claims not just survival but growth: with the help of JobKeeper he held on to all staff and since July last year has been expanding, with plans to double the number of his employees. The platform’s converted warehouse headquarters in Melbourne’s Richmond is being renovated to allow for collaborative spaces for its hybrid workforce.

Rome2rio now claims 30 million monthly visitors, with site traffic up 80 per cent on 2019 and record revenue close to double that of 2019. It’s a true global business, with users around the world and only about 5 per cent of them interested in Australian travel. Revenue comes via commissions from bookings with affiliates and advertisements. Munnangi says there are excellent synergies between Omio and Rome2rio, which are “trying to change the travel landscape by helping people or users find multi-modal options”.

He says: “If you go to any travel website … what you find are flights and hotels, and it has been like that for more than 20 years. Travel is one of the sectors which has been left behind by the digital wave in the last 20 years.

“When users want to go from one point to the other, they want to know all the options. They want to know whether there’s a train or a bus or a ferry, and which of them is a better option.”

Munnangi says the big changes in travel since Covid lockdowns up-ended the industry include an increase in domestic travel and a “new-found interest” in regional travel that he thinks will continue beyond the pandemic; more people planning trips online (he guesses only 20 to 30 per cent of travellers continue to book offline); and a shift to accessing the internet via mobile devices – a trend that has required redesign of the site to make it accessible on phones and iPads.

He says most countries are doing well in terms of adjusting Covid-era restrictions but the bigger problem for travellers is the lack of staff in some areas. People such as travel guides and operators have left the sector since it collapsed, causing obvious problems now numbers are returning.

Munnangi says his priority when Covid struck was to give staff psychological safety. He began by circulating a document to all staff with full details of the company’s financial position and its plans to “protect the jobs and keep our dream alive”.

He drew on his experiences in scaling up in Europe to develop a growth mindset at Rome2rio. He had spent four year at Amazon when it scaled up from 50,000 employees to 300,000 employees, and he says: “I learned how organisations scale and grow and what makes them tick during those processes. Scaling is not easy. There are lots of hypotheses or ideas, but a lot of them don’t work, especially in consumer businesses. You experiment, you iterate, you change your perspective all the time, but that needs a growth mindset.

“I’ve been a disciple of Amazon, Google, Airbnb and some of these businesses which have scaled really well in the last 20 years, and I’ve followed their stories and learnt a lot from them. Every growth journey is a journey of learning, a journey of finding the path. So it is (about) being open to experimentation and iteration and finding the path for yourself in collaboration with your users. It is very different from how companies operated in the ’90s because the internet age brought a new kind of interaction between your users and the company, and that needs a new kind of employee and a new kind of leader and a new kind of culture.”

Munnangi says the direct relationship between the company and the user means immediate feedback on new products and a much faster pace of learning what customers want. That requires teams empowered to iterate and change systems and products: “You need to have all the skills in that team, you need a product manager, you need a data scientist, you need engineers, you need a designer to know what the users want.”

In turn that requires a very different role for leaders: “It is not to dictate but to empower the teams and to make sure that the team works well together.” Employees need to be open to experimentation, able to look at data and trust what users want, he says.

“You should be learning every day,” he says, citing the need for an “ecosystem” in Melbourne or Sydney that supports start-ups with “enough entrepreneurs who want to make a difference to get the momentum and be as strong as maybe a Silicon Valley or London or Berlin.

“(You) need entrepreneurs with the passion and the risk-taking ability to try new ideas … it also needs government support because some of these things are not easy to build from scratch. You have a lot of support in some countries in Europe, in France, in Germany, from the government side.”

Munnangi says if Australia wants entrepreneurs to try new ideas here instead of going to London or Silicon Valley it must support them. Universities and the education system also must see risk-taking as something that’s encouraged and celebrated. He says global businesses such as Rome2rio can flourish here: “You don’t need to worry about the Australian market being small because you can build for other markets, you can launch it in other countries, you can scale in other countries without presence.”