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Hong Kong Magazine
November 16th, 2001
The Survivor Jon Stonham
The unfortunate thing about dotcoms is that because so many have
failed, the few successes are still met with suspicion. "yes,
I did lay off people, about nine or 10. It was extremely painful
to do," says asia-hotels.com founder and CEO Jon Stonham, in
response to the inevitable question. However, in the case of his
travel Web site, it was a good move. The spring's layoffs occurred
not because the company was suffering (they saw their revenue grow
by 400 percent during the fiscal year ending March 2001), but because
asia-hotels.com was expanding and relocating to Manila, where both
office space and staff were cheaper. This was a move that ensured
the company's survival after Hong Kong venture capitalists started
pulling out of the Internet industry in late 2000. Currently, asia-hotels.com
employs about 45 full-time staff, with about 31 in Manila, nine
in Hong Kong, three in Singapore, and several one-man operations
in places like Bangkok and Brisbane. According to Stonham, the company
books about 1,000 hotel-room and resort-room nights each day, and
is breaking even - even post - 9/11.
Stonham first
conceived of asia-hotels.com during the dotcom boom of late 1996.
It started in the usual, scrappy way, with two guys, a secretary
and a server located in the spare bedroom of Stonham's flat. It
was also, like most start-ups, a highly personal and idealistic
venture. The goal was simple: to give customers travel information
that was honest and unbiased. It would do so by working independently
from hotel chains, tour operators and travel agencies, relying instead
on reader polls and anonymous staff inspections. "Our added
value came from the honesty of our site. If a hotel was good, then
our readers would say so. If it was bad, the same would happen."
It was the perfect
project for Stonham, who himself is the quintessential world traveler.
His father served in the Royal Air Force, so Stonham got to sample
Canada, Germany, Holland, Singapore, Malaysia and Cyprus at a young
age. As an adult, he traveled extensively through Europe, South
America and Africa, and then got married in Kenya. Today, he estimates
that he's been to about 80 countries.
"It was
just so exciting," Stonham remembers. "We go our first
reservation from Sudan, and then a second on from Brazil. We just
grew." They outgrew that flat when Stonham's wife got sick
of techies invading her home; and with a US$1.2 million injection
of capital, they moved to Lan Kwai Fong. But then, in a way, they
also outgrew Hong Kong. "It's well known that Hong Kong is
a good place to start things, to get things done quickly. It's got
a flexibility and entrepreneurial spirit that is really impressive.
But once you get to a certain size, it starts getting really expensive,"
Stonham explains.
According to
Stonham, It's not just rents that are out of control here; egos
are, too. "During the dotcom boom, it was really hard to get
hold or good, loyal, qualified IT people. Techies had such an overinflated
opinion about their abilities and value, so people with hardly any
training were demanding $25K, $30K. Plus, there were so many jobs
at the time that once we'd get someone to the point of being useful,
they'd leave us for another position."
Although asia-hotels.com
made it, Stonham admits that the dotcom industry had serious problems.
"The doom-and -gloom coverage in the media? It was probably
fair. A lot of dotcoms oversold themselves, overhyped themselves.
The fall was a result of an industry that raised expectations to
great heights, and then didn't meet them. That's why there was a
backlash. You can't promise the world and then not deliver,"
he analyses. On the other hand, asia-hotels.com's comparatively
conservative approach worked. "We were certainly criticized
for not spending fast enough, not hyping ourselves enough, not growing
fast enough - but we're still here. We've always believed in running
a sensible company."
Stonham puts
much of the blame on investors. "The venture capitalists have
a real herd instinct. They're like a pack of lemmings. At the height
of it all, they were demanding impossible, enormous returns from
the dotcoms. Now that the bubble's burst, they've all pulled out
and have their heads in the sand - like all Internet companies are
bad no matter what." Despite it all, though, Stonham remains
surprisingly optimistic about the Internet industry. "Are there
rough spots ahead? Sure. But the Internet has changed the way we
do everything - {we} check our bank statements, buy plane tickets,
read the paper, everything," he concludes. "The market
has huge potential."
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