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Skift launched its largest and most ambitious project yet, The Definitive Oral History of Online Travel, on June 1.
In nearly 40,000 words founders, CEOs, other executives and insiders tell a story in their own words about the creation of Internet giants such as Expedia, Priceline, Travelocity, Orbitz, TripAdvisor and more.
Not all of the interviews fit into the big story so we are publishing standalone stories that offer deeper insight into information we collected during the three-month research process.
Argentina-based online travel agency Decolar, which counts Brazil as its largest market, was founded in 1999 at a time when just about all airline or hotel bookings were made in a brick-and-mortar office, on the phone, or at the hotel and airport.
When Decolar started dabbling with selling airline tickets online, there was a lot going on behind the scenes and even in subsequent years it was common for customers to visit Decolar offices to verify that the company really existed or to make changes in payment methods.
“For example, after the customers finalized the process to buy online — a ticket, for example — we had to check with the GDS [global distribution system] in Sabre or Amadeus to see if everything was OK with the booking,” says Bob Rossato, who was a corporate service manager for Decolar and sister brand Despegar for six years beginning in 2001.
“Then we had to call to each customer to request some information about his or her credit card,” Rossato recalls. “Every customer had to send to us the documentation filled out in a form, a copy of the credit card, a copy of the ID, front and back, and send it to us by fax.”
As part of the Skift Definitive Oral History of Online Travel project, we spoke with Rossato, who is a co-founder and board member of Brazil-based ViajaNet, as well as ViajaNet co-founder Alex Todres, who was an advertising and marketing manager at Decolar/Despegar a decade ago, about the development of online travel in Latin America.
Skift: How did online travel get started in Brazil?
Bob Rossato: Yes, I started to build the OTA [online travel agency] at the end of the 1990s with the guys from Despegar.com here in Latin America. I worked for Despegar from ’98 to ’99 and we started to build the OTA industry here in Brazil, in Latin America especially. The OTA industry, to us, was the beginning of the Internet years here. It is so funny looking back and very interesting because we had some barriers to be overcome. For example, I remember now that in that period personal computers and Internet communications were so difficult in terms of customers having personal computers in their houses. There were no computers during that period — it was so expensive here in Brazil. Another barrier, for example, is that this was the period when the customers started to carry credit cards.
The second barrier that we had here was in terms of market acquisition. Because in that period, Google didn’t exist. In terms of the marketing online, we used Yahoo, AltaVista, and these kinds of search engines. We used offline marketing like print marketing, including newspapers, magazines, and TV advertising because online marketing was so small in that period.
One thing, in looking back, is very funny in terms of the operation. Because in that period, the website, was only something for lead-generation. Everything was done totally offline by our operations teams. For example, after the customers finalized the process to buy online — a ticket, for example — we had to check with the GDS [global distribution system] in Sabre or Amadeus to see if everything was OK with the booking. Then we had to call to each customer to request some information about his or her credit card. Every customer had to send to us the documentation filled out in a form, a copy of the credit card, a copy of the ID, front and back, and send it to us by fax.
Skift: How were people booking hotels and booking airline tickets before the Internet?
Rossato: Just by phone here in Brazil. Just by phone. After Decolar started, the bookings in the beginning were 95 percent by phone and just 5 percent online. Because it was a totally manual process in terms of the ticketing. For example, there were printed tickets. Not e-ticket like nowadays and another challenge for us was that you had to deliver the ticket by courier or by traditional mail. It’s a crazy thing nowadays thinking about what was happening in the beginning years here.
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Skift: What was the reaction from airlines and hotels when you told them about this new thing, the Internet, and that you wanted to sell their stuff online? What was the reaction?
Rossato: They didn’t believe in us. They didn’t understand our project. They opened access in the end. We just started the process. Some airlines that existed in that period, like Varig or other airlines that had their operations here in Brazil back then, don’t exist anymore. In the last 17 to 18 years, the whole market would change. These old airlines don’t exist anymore.
Skift: Right, so how did consumers react? How quickly did it take to build up a customer base?
Rossato: It definitely took awhile to acquire customers in that period. Most of the customers made a lot of calls, I remember. They made a lot of the calls to check if the company existed. They were so uncomfortable to shop online. Because it was uncomfortable for them to put their credit card on the website, on the Internet. We had to do things to really make it comfortable for our customers like saying that this is a big company, we had big investors inside the company, that we are a true company so people felt comfortable to use their credit cards on the website.
Skift: When did that start to change? When did consumers start to trust you and you got a bigger audience?
Roseate: Internet adoption — when the people start to buy anything on the Internet — and e-commerce here in Brazil got better after 2005 to 2006.
Skift: In the late 1990s, did you start to have online competitors in Brazil?
Rossato: We had smaller competitors. They closed their doors when the bubble crash happened. It was the very early stage in terms of the online Internet in the end of the 90s. In the beginning of 2000, Rumbo, an online Spanish company, started and then they closed their doors around 2003 to 2004 when the brand was changed into Submarino Viagens. Submarino is part of the B2W holding company in Brazil. It’s a retail company.
Skift: What about elsewhere in Latin America? Were there other big online companies starting to appear?
Alex Todres: [Booking.com and Expedia entered Brazil] maybe four years ago. [In the beginning of Decolar] something that was interesting is that people, after they bought a ticket from your site, they went to your office to be sure that the tickets existed. I remember even after 2010, we had some place in the office to receive the customers who buy online because the people want to go there or change the way that they pay or things like that. It was an online operation but with a very strong offline structure.