In the Shadow Of The Expedia Orbitz Merger, Colombia’s Undertrail Focuses On A Growing Market

The big travel news across the globe today has been the Expedia Orbitz acquisition, which many analysts say is taking place to compete against Priceline. While the global travel market continues to grow and evolve, there are still many targeted niches, whether that be type of traveler, geographic area, or even mode of travel, that can be taken advantage of by the enterprising entrepreneur with a good sense of timing.  Launched in July 2013, one company utilizing the lean startup methodology that is developing a unique value proposition across all three niches is Colombia’s own Undertrail.com

Undertrail.com co-founders, CEO James Figueroa, left, and Eduardo Maldonado

Finance Colombia’s Loren Moss sat down at Avenida Chile’s Juan Valdez for a cup of coffee with Undertrail.com’s parent company Grupo Wayiú co founder Eduardo Maldonado Valderrama to discuss the unique online travel company ‘s origin and where it is headed.

Finance Colombia: So tell me about Undertrail.

Maldonado: Undertrail is the first online travel agency in Colombia and in the region that integrates different means of transportation in one platform—bus ticketing, air ticketing, even boat ticketing into one platform so that that customers can find the best option to get to anywhere in Colombia…and in the next couple years, the entire region.

We are launching a new platform new platform that integrates a route planner where we integrate the offers across travel modes. Right now if you want to for example, go tour the Eje Cafetero (coffee country—Colombia’s picturesque answer to Napa Valley), there is no direct way, the only answers you will find are maybe in a travel guide book, but there is nowhere you can go on the internet to find the best voyage, then book it. Through Undertrail, we are going to show you the way to Armenia or Pereira, whether by bus or plane. The whole package in 10 or fewer clicks.

 Finance Colombia: So somebody can do something like take a plane in one direction and return using a bus; or they can plan the whole trip: they can say “I’m going to take a plane this far and then from there I’m going to take a bus, and then from there maybe I am down in the Amazon and so I take a boat or something like that?

Maldonado: Exactly, that’s the whole thing.  Right now we have already finished the alliances with Bolivariano; that is the top bus company in Colombia. We also are sealing a deal with a shuttle bus company (“flota”) so that for example, you could go from Bogotá to a small town by either service, depending on your needs. The key is that the customer selects the best option due to his or her needs.

Finance Colombia: How big do you think this can scale, how large do you think this can get?

Maldonado: In the first year of the operations we focused on backpackers, because the local market, most of the people that travel by bus don´t have credit cards. Many don’t even have saving accounts, so they can´t buy online. There is a big myth in the local population that buying online is risky, so we decided to focus on backpackers, they don’t care about buying online. We wanted to validate the product with them first.

In the last year we have been investigating how we could successfully scale this product. We know that ecommerce penetration has been accelerating in Colombia and in the region, and we know for example, that during the last year, there were 130 million passenger trips via bus in Colombia, and more than 650 million in the Andean region. Many of those trips, also had an air travel component.

On the other hand, in Colombia during the last four years, bus companies have lost four percent market share to flights. Why? Because now there are low cost air carriers in the market like Viva Colombia, the first local low cost air carrier that launched two years ago. So now, sometimes flight tickets can be as inexpensive as bus tickets. But still, people aren´t going to stop of traveling.

Finance Colombia: Would you say that most of your customers where they come from the US, from Europe, what do you find so far?

Maldonado: 90 % are foreigners, and from that, the biggest slices of the pie are Mexican and Argentine. From the USA I would say about 10%. We also have a lot of people from France.

Finance Colombia:  because you deal a lot with the backpacker crew, have you ever thought about integrating with things like Airbnb or products like that?

Maldonado: In the future we want to integrate with different kinds of products that can complement our offer. But right now, we have to focus on transportation because, that’s the part of the industry that is least developed.