“Entrepreneurs need to take risks, be creative, and try to build something a bit disruptive.” – Venancio Aparicio, Aquotic

As a part of the CAST project, we have been supporting creativity driven innovation in tourism and, more recently, have sought to mobilise a response to the impact of COVID-19 in this space via our creative solutions CAST hackathon, which took place in July 2020. Last autumn, we started conducting a series of interview-based case studies to examine how businesses are coping with the current situation. Our fourth interview, directed by Creative Business Network, EBN – European Business & Innovation Centre Network & WestBIC is with Venancio Aparicio from Aquotic.

About Aquotic

Since 2008, Aquotic, a Spanish B2B online travel agency (OTA), has been specialising in cruises. Their focus is to help people find the ideal cruise thanks to their seasoned team of experts and the innovative use of technology. They also offer their customers a wide variety of shore excursions and insurance packages to make their experience as pleasant as possible. They started with their own savings – they neither borrowed money from friends or family members nor raised a loan from a bank.

Interestingly, while many companies try to automate the whole booking process, Aquotic values a close and direct customer relationship. Although 95% of first contact is made through their website, the rest of the operations is entirely done by phone, by chat or by filling a form until they return from their vacations. “We understood that the online is the only the way to show people what we sell; but customers want and need to stay in contact with a person not with a machine”, explains Venancio Aparicio, Founder and Sales & Content Manager. In a digital world, “machines and people need to be 50-50.”

About 90% of their customers are Spanish, with the remaining 10% coming from Latin America and Portugal. They also have a few customers from France, Norway, the United Kingdom and Germany. Some years ago, the ratio used to be 70%-30%, but the situation changed due to the evolution of the exchange rate between the euro and the dollar. 75% of bookings are done by people aged between 40 and 75 years old depending on the vacation period, as people are travelling with children. In comparison with the American, the British and the French markets, Spain is a relatively small market generating rather low profit margins. In addition, prior to the COVID-19 crisis, the competition was fierce as fifteen companies were competing for the same customers whereas there were only five on the market 10-15 years ago.

Surviving during the COVID-19 Crisis

As we all know too well, the tourism industry was devastated by the COVID-19 pandemic. With no customers for about nine months, Aquotic’s business went down by 90%. This had three major consequences. Firstly, they had to close their two offices in Marbella and Madrid, and make redundant all the employees to save the company. That was their worst step emotionally. Secondly, they had to cut all the basic costs and find the lowest rates when necessary: e.g. offices, phone, bank commissions, IT contracts, salaries, etc. Thirdly, they had to reschedule customers from one year to another which means that no real money was coming in anymore.

As the crisis continues and it remains unclear under which safety and hygiene conditions cruise business will be allowed to restart, the problem remains more or less the same for Aquotic which keeps moving customers from one year to another, meaning from 2021 to 2022. It is difficult for them to survive since their industry is characterised by high costs and low benefits, and they depend on third parties. In fact, contrary to what offline travel agencies argue, online travel agencies are very expensive in many respects.

Besides, Aquotic did not receive any help from the government yet. And with fewer staff members during 2020 and 2021, they will have to wait until 2022-2023 to restart growing at the same level of 2019 when they achieved their highest record of passengers and business turnover. “We were thinking of becoming the main representative of small unknown cruise lines, developing an IT project for travel agencies, and entering the Portuguese market (we already have everything translated), but we could not make a step further at this moment, and we need to rethink of new business ideas within our cruise market”, emphasises Venancio.

Not all hope is lost though. Fortunately, their online office remained open. So, they never totally closed, and their staff have become proficient in multi-tasking. They borrowed money from a bank at a low interest rate for the next three years. And customers have not given up all travel. “As we can see from Google Analytics and internal demand, people want to travel more than before and want to spend more than before. This is what our customers tell us, and this is a good point for us”, explains Venancio Aparicio. The question is when cruises are going to be fully operational, and nobody knows it yet. “Since August 2020, only a few ships were prepared to cruise all over the world, but it is not our direct market. We think that during the summer of 2021 only a few ships will come back in Europe, but we do not know which ones and schedules. And many of them are still being cancelled and more will be. For sure, 2021 is going to be very difficult and soon we need to put our mind in 2022 season.”

For the coming months, Aquotic will continue to listen to their customers and get ready for when tourism will restart. They can also rely on the strong support of CEEI Burgos which hosts them and has always collaborated closely with them. Aquotic is also highly a ranked highly recommended cruise OTA in Spain (4.9/5 according to Google and customers opinions). Besides, Aquotic has developed the fastest and only system in the cruise world to show all prices at one click. In any case, they plan to stick to their market segment, instead of squandering their resources trying to sell flights or hotels.

“Entrepreneurs need to be really focused on what they want to sell and to whom: it is really important; it is not like ‘we are going to go and sell everything on Internet’. They need to take risks, be creative, and try to build something a bit disruptive to get the attention of customers”, concludes Venancio.

To learn more about the company, visit their website here.