In today’s post we are going to talk about Destinia‘s internationalization strategy. We had the pleasure to have the Strategy Director of this company in one of our ‘’MaDI Talks’’, of the Master in International Business of the Carlos III University of Madrid (MaDI- UC3M)
Ricardo Fernández is the Strategy Director of Destinia, and he talked about his job, his experience in the company as well as about Destinia’s internationalization strategy.
¿What is Destinia?
Basically, Destinia is a travel website where they sell hotel services, flights, and other services related with travel experiences. The strong point of this company is their hotel services. They offer in their website more than 500.000 hotels in the world.
The idea came up 15 years ago. Destinia was one of the first digital startups created in Spain. They can be described as a tech company because they offer technological services and a reservation system through their website. They started with a travel website but today they have other B2B brands that offer technological services to other companies.
Ricardo sees Destinia as a connectivity company and despite they are not a big company yet (they have around 200 employees), they believe in innovation and in connecting suppliers with clients and they offer different payment methods to make the booking experience as easy as possible.
Destinia’s Internationalization Strategy
Destinia has several offices in the world. The central office is located in Madrid but they have others among Spain, one in Valencia and one in Canary Islands. They also have offices in Arab Emirates, Iran, Switzerland, Egypt and Brazil. They are also going to open one in Mexico.
They are very well developed in Spain and Europe but another strong point is that they have a strong presence in Arabian countries. They were the first European website translated into Arab. Iran and Saudi Arabia are one of their best markets.
Destinia’s internationalization strategy is similar to any digital company. To make the internationalization, they basically followed three steps:
- First, they grew the company looking for new clients abroad.
- Second, they created a product that people in other countries could relate with and would be likely to buy. In this point it is very important to use Marketing and product design correctly.
- Third, they have to be present in the country so this way the clients feel more connected with they brand and the product they are selling.
Internationalization in Arabian Countries
When a digital company decides to go international is because they have a product that they can sell in other countries. Regarding the product they sell, they chose Europe for their internationalization first because of several obvious reasons: languages easy to translate, similar travel preferences, similar payment methods, common currency (the Euro), etc.
After Europe, Destinia decided to focus on the Arabian Countries, despite the huge cultural difference between this countries and the European Countries.
One of the first challenge they faced was the translation of their website and dealing with the local payment methods. For example in Saudi Arabia they created a payment method in which an agent had to go to the client’s house to get paid because there they only use cash for payments. The American blockade was the reason of this payment issues in Saudi Arabia, but on the other hand, this situation was very beneficial for Destinia because in these countries, American companies (like Booking or Expedia) could not operate, and they were their main competitor. So this turned out to be a good competitive advantage.
Key factors in Destinia’s internationalization strategy
Access to the market
Translation of the website:
Translated in 32 languages.
Search engine marketing
Traditional marketing and publicity:
This implies doing local marketing in the different markets that they operate. A curious case was the marketing campaign they made in Iran with an unknown Iran person that looked exactly like the football player Messi.
Adapt their product to the market:
Among other issues, it is important to pay special attention to the website design, to design an offer of their products (flights, hotels, etc.) and adapt them to the local market in which they are going to operate. They should also take into account the exchange rates and the more suitable payment system.
Internationalization is not only sell their products abroad
Apart from their main goal, which is get more clients, there are other reasons for the internationalization:
- Tax issues: they chose different countries depending on their financial and tax situation to locate their offices.
- Operational issues such as cost reduction and obtaining competitive advantage. For example they chose Egypt to locate a call center because of the cost reductions they gained in that country.
- Get ahead of their competitors. In the case of Iran, the fact that Destinia was one of the first companies to go return to that country was a strong competitive advantage.
- Brand recognition and global branding. It is true that Destinia has presence in many countries, but they are not leaders in every one of them. Nevertheless, their strong position in Arabic countries has helped grow the brand significantly.
Some of the threats that Destinia’s internationalization has to face
- Challenges or problems that may arise with the management of local means of payment
- Market unawareness
- Facing fraud or corruption issues
- Ignorance of the business culture
- Problems with legal security, especially in emerging countries.