In yet another case that proves that smart management and a good business model can’t guarantee success, eGulliver, which connects agents and consumers in an online forum, has suspended operations and laid off its staff of 15 employees.
EGulliver’s co-founder and CEO Deslie Webb made the decision to suspend operations last week after a potential strategic investor, World Travel BTI, decided not to back the clicks-and-mortar company.
“They decided they have less risky places to invest,” Webb said. “I didn’t have [the money] to make payroll Friday ... Friday was a very sad day.”
Webb had been confident that Atlanta-based WorldTravel BTI, the third largest corporate agency and ninth largest leisure group in the U.S., would become a strategic investor in eGulliver. Then on April 12, the agency group told Webb that they have decided to pursue other acquisitions. WorldTravel BTI is one of the large agency groups vying with Carlson Wagonlit for the Cruise Holiday franchise as part of ByeByeNow.com‘s bankruptcy proceedings. Webb, who has dedicated the past year and a half to building her business, said she hopes to find a strategic partner who will be able to carry out her vision of a distributed fulfillment model for complex travel.
“We’re still hopeful that someone will buy us or we can resurrect it with capital,” she said. “We are 100 percent committed to the vision and we are totally behind the concept.”
In a last-ditch effort to resurrect eGulliver, Webb said she plans to talk to GDS whose agencies could benefit from its model as well as to travel agency franchise groups. “We were poised for success and then we never got the chance to see it launch in a big way,” she lamented.
EGulliver began in September 1999 when Webb, a former executive at Carlson-Wagonlit Travel, set out to build a better travel Web site—one that would offer “high-tech, high-touch service.”
The idea was to bring travel specialists together with travelers in an online forum, offering consumers something that many other sites lack—the human touch. Webb decided to do this after looking at trends in online travel. Although people are becoming more comfortable with booking point-to-point travel online, look-to-book ratios remain low. Webb concluded that consumers want the convenience of shopping online but for high-end vacation travel they still value an agent`s expertise.
Since it started recruiting agents last May, it has signed on 1,800 specialists. “Right now the agents, I feel, are the ones who will suffer the most from the loss of eGulliver,” Webb said. EGulliver gained many supporters in its short existence. Last April, eGulliver announced a partnership with Amadeus; that partnership was designed to drive new U.S. customers to Amadeus while building the eGulliver network. Last summer the Atlanta-based site earned the support of ASTA (American Society of Travel Agents), which commended it for its commitment to brick-and-mortar agencies. In November, VacationCoach.com, which provides travel recommendations, formed a connection to the eGulliver site, making it one of the VacationCoach booking options available to both its visitors and the site`s paying members.
In perhaps its biggest online coup, eGulliver scored a deal with Expedia in September. The online travel giant would utilize eGulliver’s specialists to help its customers book complex travel and take an equity position in the company. EGulliver was planning to complete integration of its site with Expedia on May 7.
“Of course we are certainly ... sorry to see them suspend operations,” said Expedia Product Manager Mitch Robinson. “We looked at their service they were providing as something [that served] a fairly small percentage of our business, to provide assistance for those who want to make extremely complex travel plans.”
He said it’s unlikely that Expedia would consider acquiring the company. “There’s a lot more to a purchase that just the cash outlay,” he said. “We were very happy with our partnership but it’s not necessarily a business acquisition that would meet our goals right now ... EGulliver filled part of that void [of providing complex travel arrangements] and we will continue to look at other ways of doing it.”
David Feit, CEO and founder of Webeenthere, a newer site with a click-to-bricks model, released a statement following eGulliver’s suspension: “We are sad to see one of our formidable competitors cease operations. Although I have not had the privilege to meet with any of the founders of eGulliver, I have always had the utmost respect for their business and operations. Good competition is something that has fueled the marketplace forever, and something that will be missed in this instance.”
He said that any eGulliver specialists who apply to Webeenthere would be given special consideration. “Today`s capital markets are very difficult to maneuver and we are constantly seeing quality businesses forced to shut down; this is just another unfortunate example,” Feit added.
Webb said that in this “buyers market” there are no guarantees for success even for the best companies with great prospects.
“What happened is that were paying for the mistakes that a lot of other companies made,” Webb said. “As far as delivering ... I feel very proud of what 10-15 people accomplished in [a year and a half].”