Michael Kenny recalls a "lightning fast" decade in the travel business
It's a long way from a mountain bike in Phuket to a plush office in Bangkok's Offices at Central World, but Michael Kenny, CEO of Agoda Company, remembers it as a fast ride. When he launched Tropical Trails in November 1996, he had no idea where the road would take him. "I was passionate about travel and tourism, but not sure if I could create a successful business running bike tours on Phuket. I tried it anyway." That determination to pursue his passion for travel has paid off for Kenny.
He's now the head of Agoda Company Pte. Ltd, a Singapore-based online hotel bookings company with operations in Bangkok and the Philippines. Next month Kenny celebrates a decade as a travel entrepreneur and looks forward to another 10 years. "When it was time to move beyond Tropical Trails, I wasn't sure I'd have a future in travel. That was discouraging."
A native of Long Island, Kenny attended Lafayette College in Easton, Pennsylvania, receiving a degree in Business and Economics. He joined the Arcadia Hotel Group (now Hilton) in 1994 and began to learn the ins and outs of the hotel business in Thailand. "Phuket was simply stunning at that time," he recalls. "Great weather, great food, welcoming people and an emerging tourism environment. It was a great place to start."
When Kenny founded Tropical Trails in 1996, he had few financial resources and no backers. "I lived a modest lifestyle, putting all my time and effort into starting the business." He built a reputation for hard work and reliability that served him well as he transitioned to his next project. "Being an entrepreneur is a full-time endeavor. I learned quickly that you need to be prepared to put life outside the business on hold. It's a serious commitment."
Early in 1997, Kenny began to see the potential of the internet for travel services. It was difficult for customers to find information on hotels around the world and even harder to find the best rates. Kenny had already built relationships with executives at top tour companies through Tropical Trails, and quickly secured the rights to market hotels to customers. This e-commerce business model was totally new to Thailand, and Kenny was the first to work with these companies in promoting their low hotel rates online. From then on, Kenny's focus was on the internet.
In 1997, he created PlanetHoliday.com. Charging customer credit cards directly, Kenny secured favorable rates and credit terms from hotel suppliers, relying mostly on his personal reputation. In 1997, few online hotel merchants existed and even fewer chose this business model. "It was a new market and very appealing to customers," Kenny explains. "With just a few hotels in Thailand, we were able to start up very quickly. Customers found us through search engines like Google, which were just appearing on the scene." Most of PlanetHoliday's first customers came from the United States and Europe, as consumers began to discover that search engines where great sources of travel discounts and information.
By 1998, it was clear that Kenny had a real business to look after. "Many new competitors began to pop up in 1999, many copying our business model, even copying the text and graphics on our site. We realized this was, in many ways, validating our activities. But it definitely made things more competitive." While the internet bubble popped in 2000, it was still clear that the travel category would remain stable and successful.
Over the next year, Kenny expanded hotel selections regionally into Asia, increasing inventory while keeping costs modest. In early 2000, he began to experiment with pay-per-click advertising and customer service via live online chat, both of which are key components of his business today.
But the industry as a whole suffered in the aftermath of the September 11 attacks. "After 9/11, we began to focus on geographical diversification of our products and expansion of our customer base." The company moved its operations to Bangkok in early 2002. "Bangkok offered better opportunities for running a serious operation, particularly with respect to recruiting more skilled and international staff."
The next year the industry was devastated by the SARS crisis, but Kenny pulled through, despite relying on Asia for nearly 80% of the business. "It was a tough time for everyone involved in our industry, but we knew customers would return. We were fortunate that we offered product in other areas and also that are customers were regular travelers to Asia. I became more determined than ever to succeed in this industry."
During 2003, Kenny launched PrecisionReservations.com, a website that sells through affiliate business partners. More than 1,000 websites use PrecisionReservations.com for hotel reservations. That same year, PlanetHoliday.com and PrecisionReservations.com became part of Agoda Company Pte. Ltd., which Kenny founded with longtime friend and internet operations specialist Robert Rosenstein, who came on as Chief Operating Officer. "Agoda Company represents the future for me in the travel business," says Rosenstein. "Agoda has the resources, the connections and the vision to take online hotel booking to the next level." Agoda plans an official release of their new flagship site, agoda.com, in January 2007.
Agoda maintains an office in Bangkok, where it employs over 150 people. Kenny plans to celebrate his anniversary with friends, colleagues and partners. "It's been a lighting-fast decade for me," he says. "Given the nature of the travel business, I assume the next will be the same.