Friday, October 20, 2017

Timeshare in the age of Oyo, Airbnb and OTA-does it still make sense?

http://www.tflguide.com/club-mahindra-membership-fees-review/ This excellent blogpost makes the point that memberships of Club Mahindra, Sterling, Country Club etc have hidden fineprints and costs, which make it difficult to avail it. For example, non transparent reservation of rooms, non alignment of incentives between members and owners once timeshare is sold, active resale market at 30%-50% discount etc. Also, with the Indian hotel market developing due to OYO, AirBnB and OTA(GoIbibo, MakeMyTrip, ClearTrip) and quality standards going up, it is no longer difficult to get basic quality standards met. Some of you may feel that the target segment for these memberships is different-HNI goes for timeshare while middleclass/lower middle class for OYO etc. But star hotels are increasingly discounting on OTAs, and now even timeshares offer rooms there. For example, I recently got 3 nights in Sterling, Munnar for Rs 3200/night inclusive of 18%tax. The lowest price displayed was Rs 2800/night a day before I booked(missed that unfortunately). and this for a price inclusive of breakfast. I wonder what would members think of this. After all, they have paid membership fee, and AMC sort of fee, with limited choice of hotels(often this is away from city centre, so costlier taxis etc). 

Also, timeshares are good for family vacations but these are in peak seasons in school holidays where often supply is limited. For young couples who can travel in offseason, these memberships are good. But it does not evolve with lifecycle needs

Tourist Cab business-economics

Having booked outstation cabs for self/family across Tamilnadu, Kerala, Orissa, Bengal and Maharashtra, I thought to write some points on the business model. Usually, the pricing starts from Rs 9/10 per km for a round trip with min 250km/day. Add more for bigger vehicles, and sometimes an extra payment for the driver's food/stay arrangements. Obviously, toll/parking/interstate permits is extra. If one prefers self drive, then Zoomcar offers pricing starting at approx Rs 16/km(if one uses the 10km/hr option for Sedan on Sat-Sun, with Rs 12/km for extra kms). Here, it is actually costlier than usual cabs but ok for those needing err.privacy.

Anyways, I hired a car from Kochi-Munnar for 4 days. The package was Rs 7000 for 4 days, with 500km included, and driver's cost all included. At the outset, he filled his diesel tank for 33.3litres paying Rs 2,000. The tank was only 75% depleted at the end of the 450km long trip, implying a mileage of 18km/litre for 25lts. Assuming Rs 1500 for fuel, and Rs 250/day for driver stay and meals(so Rs 1000 for 4 days), the driver still earned Rs 4500 for 4 days towards his profit/salary/car hire costs. The vehicle was an Ertiga for which 5yr EMI will be Rs 17500/month for a Rs 8.6onroad price. Hence, assuming 60% utilisation or 18days/month, Rs 1000/day goes towards that. So actually, not much profit there. The real juice comes when the driver gets tips or increases utilization. 

With marginal cost of fuel only around Rs 3-4/km, why is there not a price war like seen in local taxis(ola/Uber). Even Savaari was costlier than the local operator who serviced us, even after the Rs 5000 discount on the rack rate. Reasons for this is usually low utilisation, tourist fleecing/oligopoly etc. 

In this market however, innovations appear confined to service quality and not to business practices like garage-garage(instead of point-point), and pricing. The claims of Droptaxi/Onewaytaxi and others(https://timesofindia.indiatimes.com/business/india-business/pay-only-one-way-to-cabs-for-outstation-travel/articleshow/59059749.cms) are not realistic since hardly anyone confirms the pickup in advance. Unless you are ok to change your plans in the last minute(say backpackers), this won't work when you wish to take connections. 

Also, as mentioned in this post(https://scroll.in/article/807342/unfair-competition-how-uber-and-ola-are-killing-livelihoods-of-mumbais-auto-and-taxi-drivers) the long distance fares(>25km/full day rental) are now the domain of app based aggregators like Savaari, Ola Outstation etc. So the local taxis are in the death spiral of smaller distances-less profitability-lower earnings-demand/need for fare hike-demand compression for long distance travel etc. 

Saturday, October 7, 2017

Hathway Broadband-Great people but poor technology-therefore poor customer experience

I took a 2month Hathway subscription and then when relatively hassle free, took the annual subscription at 50MBps speed, 300GB/month annual subscription at Rs ~8500/year(Tax inclusive). The installation was a delight with same day, and online, but post renewal, repeated technical issues cropped up. Resolution experience has been iffy as yet though. I have blogged earlier on the customer service issues of PAYTM and some others like ICICI. However, Hathway gives a competition to PAYTM. Below is the typical customer experience channels and my comments:
Automated service call asking if satisfied with the resolution of the complaint. If you say no, they ask you to enter ticket  number. As if customer will have it handy. Why not give an IVRS based choice instead or else customize the call to say “Resolution of complaint No XXX on
App to enter tickets but very limited functionality and no “Others” tab. This renders the app useless for  all but basic queries. Also, resolution comments are not mentioned.
Customer care does not take complex issues, and asks you to send an email.
To be fair however, the technical support team is quite good, and call centre team responsive. Also, their remote diagnostics tools are a delight

Using best practices such as Live chat, predictive diagnostics and fault correction without waiting for complaints, proactive service credits for poor service, would improve the service