Travel Tech Essentialist #36: Spider
September 5 · Issue #36 · View online
1. Strive to dominate
In recent months, a few influential German travel start-ups have publicly stood up against Google's so-called abusive and dominant practices. In this post, I raise some questions to understand if complaining companies are practicing what they preach, and drive the point that it would serve us all better to focus more on how we can build a unique product and customer experience so that we don't have to resort to complaining about Google.
2. Can travel become less dependent on Google in a post-pandemic world?
Mario Gavira and I were colleagues in eDreams Odigeo a few years ago. He writes highly engaging and thought provoking articles on the online travel industry. In his latest post, he asks: "With travel companies having the unique opportunity to hit the marketing reset button, will they swing back to their old investment habits once travelers hit the road or will they throw away the old search marketing playbook and try to rewrite their user acquisition strategy from scratch?" I think it will be a tough sell for big B2C OTAs and other Google-dependent players to reduce their reliance on a channel that is offering them a scale and ROI that they haven't found elsewhere. Google continues to build a travel offer that resonates with consumers. And where consumers go, large travel players will have to follow.
3. Despegar and eDreams Odigeo Q2 2020 results
Europe's and Latin America's larges Online Travel Agencies announced their Q2 results, and they are as bad as what was expected. There is a month on month improvement though.
Bookings decreased by 87% for eDreams and 96% for Despegar.
Revenues decreased by 88% for eDreams and 96% for Despegar.
EBITDA loss of $17 million for eDreams and $66 million for Despegar.
Variable costs (which represented 84% of total costs in Q2 2019) decreased by 84% for eDreams, while sales & marketing variable costs for Despegar (which represented 90% of total costs in Q2 2019) decreased by 95%.
Despegar secured a $40 million revolving credit facility and raised $200 million in capital through a private placement transaction, while eDreams raised €15 million from a Government-sponsored loan due 2023.
Despegar acquired an 84% equity stake in Koin, a leading Brazilian payment platform for the travel sector, for an estimated $4 million.
Despegar also renegotiated the terms of its Best Day acquisition that was announced in January. The acquisition, originally valued at $136 million, is now valued at $56 million plus up to $20 million earn out with no cash outlay at closing.
More: Despegar; eDreams
4. Hotels as leisure and work hubs geared toward remote workers and hyperlocal guests
Yannis Moati writes on how the hotel industry is going through a "great rethinking" process as it can no longer rely on a single driver of demand: the overnight traveler. The future of hotels lies in maximizing and optimizing its real estate assets in new and novel ways. The great rethinking sits at the confluence of two other major spatial trends: the mainstreaming of remote work and the focus on hyperlocal travel. He highlights the potential that hotels have in unlocking new ancillary revenue opportunities across their properties (pool, gym, parking, subscriptions, etc…), taking a cue from airlines and retail. More.
5. Some tourism players and destinations are doing better than ever
Big summer vacations to the usual destinations are down. But some destinations and travel players are turning to camping, boating, hiking and fishing and are having record setting results. Read more - WSJ.
6. Airbnb and HomeAway are leading the recovery
'Follow the money'. According to Earnest Research, which tracks trends in credit and debit card purchases in the US, spending on air travel during the week ending August 19 was down 73% from the same week in 2019. That week, consumers were spending about 50% what they did last year on hotel stays. However, they spent just 15% less renting homes on Airbnb and HomeAway as they had the same week in 2019.
7. Corporate travel's long recovery ahead
In this article, McKinsey examines the role of corporate travel, and how the industry has recovered after previous disruptions; the segments that may return first, and how and why they will differ; and the segments that may be permanently replaced by technology.
8. Flight insurance startup Freebird acquired by Capital One
The synergies between insurance and travel are particularly relevant in a post-Covid world. Customized insurance (as opposed to the usual one size fits all) will be a core component of travel personalization. Freebird, launched in 2015 in Massachusetts, was an air ticket rebooking service and flight insurance for passengers to use in the event of a cancellation. The startup stopped offering this protection as a result of the wild flight disruptions brought by Covid. However, financial giant Capital One acquired Freebird's flight disruption technology and team. It will be interesting to see if this translates into a smart and personalized travel insurance for Capital One clients and cardholders. Read more - The Points Guy.
9. Deals and news
Surf Air, a membership-based private plane based in Los Angeles, secured a $200 million funding commitment from Global Emerging Markets Group for when it goes public. The company is planning on going public in the coming months via a Special Purpose Acquisition Company or a direct listing. Bloomberg.
In-flight internet provider Gogo will sell its commercial aviation business to Intelsat for $400 million in cash. Intelsat is the world's second largest satellite operator by revenue and filed for Chapter 11 bankruptcy in May. More.
Trell, the Indian video platform that creates and shares travel experiences, raised $11.4M from Fosun RZ Capital, KTBN Venture, and further investors.
Swiss-based Travizory raised $2M from Atlantic Labs. The company's platform allows countries to obtain passenger details, biographic, biometric, itineraries and health information, so that airports and border officials can validate entry requirements. More.
RV rental marketplace RVshare reached two million days booked for RV trips since its launch in 2013. It reached 1 millions days booked in July 2019, and it doubled its seven-year booking total in a short 13 months. More.
Traxo provides itinerary intelligence and travel data aggregation technology solutions to clients across the travel ecosystem. The Dallas-based startup was founded in 2012 and has raised a total of $24 million in funding from investors such as Airlines Reporting Corporation and TripAdvisor, with the latest round of $10 million in November 2019.
Autoura delivers in-destination travel experiences via foot, bicycles and electric scooters. Its mission is to build the technology platform that enables autonomous vehicle sightseeing on a global scale. The UK startup sees the transition from human driven large tour buses to smaller autonomous vehicles as a once in a generation change for the global sightseeing industry.
iBoardings is a Spanish startup that provides hardware and software solutions that solve airline and airport pain points. One of its products is a cabin baggage checker that uses computer vision to analyze the size and weight of bags and greatly improves the carry-on baggage control process. It was chosen by IATA as one of the most innovative products in travel.
👍 Travel Tech Essentialist provides independent consultancy and advisory services to the travel and media ecosystems, with clients ranging from early stage startups to public companies. We also work with venture capital firms, hedge funds, investment banks and consulting companies that are supporting and investing in the travel and media space. Go here to learn more and to contact me for possible collaborations.