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There's money in rating pubs

Subir Roy in New Delhi | August 26, 2005

Are you the compulsive traveller who disdainfully avoids the conventional crowded destinations and takes pride in his knowledge of out of the way dream locations? If so then you will have often longed to be part of a fraternity of kindred people who can tell each other of such places.

Till not so long ago this was wishful thinking. Keeping in touch, collating all the inputs, feeding them back to the fraternity and periodically updating the information was a Herculean and hugely costly task. Not any longer, in the age of the Internet.

Two intrepid travellers, Hari Nair and Vinu Krishnan, have left well paid jobs in global consultancy firms to set up a business with the traveller in mind. Called the Leisure & Lifestyle Information Services Pvt Ltd, the business is centred around three portals,

As the names suggest, they plan to tell you all you wanted to know about where to stay, where to eat and where to unwind. But the novelty is that the business centres around a fraternity of travellers who come forward to register themselves at these portals and, most importantly, rate the resorts, eateries and pubs.

While there are any number of travel and leisure portals that tell you all about where to go, how to get there, where to eat what and which watering hole has the right ambiance, this particular business will stand or fall on its unique offering, the ratings.

They are all done by travellers, screened and verified for authenticity and kept up to date. PricewaterhouseCoopers oversees their rating exercise.

CEO Nair and COO Krishnan started out in April 2004, took a year to prepare the business and in the first quarter of operation (ended this June) have taken in Rs 30 lakh (Rs 3 million), to become cash breakeven.

They have roped in angel funding of Rs 2 crore (Rs 20 million) from D S Puri, one of the founders of HCL who owns a little less than 40 per cent of the business. They are planning to go in for a second round of funding of Rs 4 crore (Rs 40 million) six months down the line.

The key to the  success of the business lies in the reliability and correctness of the rating. The final rating is a composite one, made up of seven to eight aspects like location, surroundings, service and food. A traveller has to attribute a score from one to seven on each of these.

These are averaged, then all the individual ratings are averaged, with higher weightage being given to travellers who have done ratings earlier. Ratings are in three categories -- reliable, less than reliable and no rating -- depending on how many have contributed to a rating. The ratings are redone or discarded after 18 months.

How do you sort out the genuine from the motivated rating? Nair explains that over time they have been able to identify a set of behavioural traits which sort out the wheat from the chaff. Plus, technology helps.

It can identify the IP address which will show up if more than one ID comes out of the same location. This can only happen if there is more than one rater at the same place. The long term strength will lie in building up a base of reliable traveller raters.

The portals' revenues come from advertising (the portals offer a very focused audience, so little wastage in reaching the untargeted), and travel publications. Mobile telephony has major potential.

Imagine travelling through an area and being able to obtain, through a GPRS based system, a list of the hotels in the region, their phone numbers, exact location, their tariffs and, yes, a rating.

In six months' time the company will begin to charge a fee from resort or property owners who want to know the details of ratings to get a feedback on what they are strong or weak on. A year down the line properties will be charged a fee to display a rating.

The portals have over 27,000 members as of late July, nearly 80 per cent in the 22 to 40 age group. Information is available on over 1,400 properties, over 2,500 restaurants and over 200 pubs spread over south, west, north and a sprinkling in the east. As incomes and the number of discerning travellers grow, these numbers can only grow.


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