Travel Tech Essentialist #20: New Horizons

Many of the stories in this newsletter open up new horizons for companies, people and products as a result of new launches, new locations, new investments, new partnerships and acquisitions.

1. Travel companies send a letter to the European Union to complain about Google’s Vacation Rentals

Expedia, TripAdvisor, eDreams Odigeo and 27 other travel companies sent a letter to the EU asking to investigate Google for how it shows vacation rentals, claiming it unfairly gets a prominent placing above other search results. Since 2017, Google has been fined three times by the EU, for a total of €8.2 billion (Google will start this week a legal battle to appeal). Maybe the EU could channel some of those funds to launch its own regulatory-friendly search engine. Oh wait, they already did in 2005 with Quaero. Too bad that the project failed and was closed in 2006…But there’s always Google.

2. Sabre reaches 10-year partnership with Google to “build the future of travel”

This partnership looks to drive innovation in travel by getting both companies to invest talent and assets in order to “imagine, develop and deploy future capabilities that will advance the travel ecosystem”. Sabre is one of three companies, along with Travelport and Amadeus, that control more than 95% of the GDS market. Read more.

3. Jetblue founder’s new airline

David Neeleman founded JetBlue 20 years ago. His new airline, called Breeze Airways, will start flying later this year. Neeleman says Breeze will be “the world’s nicest airline” and will have the most advanced mobile app in the airline industry: “Anything you can imagine you needed to do, you could do on our app. You can change or cancel. Or order a filet mignon sandwich if you want. Whatever you want.” He will be pursuing an unusual approach, with two very different models of airplanes and routes. Read more - Skift.

4. Despegar buys one of the largest travel agencies in Mexico

Despegar will acquire Best Day for $136 million, equivalent to 17X Best Day’s 2019 EBITDA of $8 million. This is the largest transaction in the LatAm travel intermediary industry in terms of revenues. Best Day had revenues of $140 million in 2019, of which 70% were online. Despegar has the objective to double its mobile bookings by 2025. This acquisition will boost its revenues by about a quarter. Read more - Business Wire.

5. OYO acquires TUI’s rental tour operating business

With this acquisition, Oyo adds 17,000 properties to its 35,000 already under management in Europe after last year’s acquisition of European vacation rental brand @Leisure Group in a €360 million deal. The acquisition comes as OYO is believed to be reevaluating its US and UK expansion strategy amid layoffs in a number of markets affecting its core hotel business. Terms of the TUI deal were not disclosed. Read more.

6. How much is a tech-enabled property manager worth?

With Sonder, The Guild, Lyric and others raising large amounts of money for “tech-enabled” hospitality, some are wondering whether these businesses deserve the kind of valuations they are receiving. Ian McHenry (founder of Beyond Pricing) analyzes multiple variables and concludes that for a fast-growing tech-enabled vacation rental manager, it’s reasonable to be worth 1.0-1.5x booking revenue or close to $30k per property. And for those growing 4x per year, it’s not a crazy leap to get to 2.5x of booking revenue. Read more for a detailed analysis.

7. Latin American hospitality group Selina opens in NY

Selina has opened its first of several planned US properties, situated in New York’s Chelsea art district next to the city’s High Line park. Launched in 2015, Selina is one of the world’s fastest-growing hospitality brands targeting today’s nomadic traveler with a global infrastructure to seamlessly travel and work abroad. Forthcoming locations in the US include Miami and New Orleans, with Selina targeting 400+ locations and 130,000 beds worldwide by 2023. It currently operates around 50 locations. Read more - Business Traveller.

8. People

  • ReviewPro founder RJ Friedlander writes about his last chapter in the company and introduces Michael Kessler as the new CEO.

  • AirAsia Group CEO Tony Fernandes, one of the world’s most iconic airline entrepreneurs with some of the boldest digital plans, will temporarily step aside from the company after reports surfaced he may have accepted a bribe from Airbus in exchange for major aircraft orders.

  • Frits van Paasschen, former CEO of Starwood Hotels & Resorts, joins Sonder’s Board of Directors.

9. Funding 💰

  • Following its $250 million Series E capital raise last summer, peer-to-peer car sharing marketplace Turo has secured an additional $30 million to the round. Manhattan Venture Partners and Allen & Company backed the deal, bringing the company’s total funding to date to $500 million. Read more - PhocusWire.

  • Five months after announcing its $45 million Series B funding, workplace communication platform Beekeeper is adding an extra $5 million to the round from Energize Ventures. Read more.

  • Barcelona-based Immfly secures funding from Boeing’s HorizonX innovation and venture arm. Founded in 2013, Immfly manages in-flight digital services including connectivity, entertainment and retail options. Read more - Paex Aero

  • Amadeus has acquired the airline network planning software of Optym for an undisclosed sum. For more than three years, Amadeus has partnered with and invested in Optym to develop airline solutions such as Amadeus Sky Suite, with a number of airlines including Southwest and EasyJet using the technology. Read more.

  • eDreams Odigeo will acquire Waylo, a San Francisco-based startup launched in 2017 that offers consumers discounted rooms by predicting price reductions on surplus rooms. Read more.

10. Promising startups

  • Bidroom is the world’s first no-commission and membership-based platform with discounts of up to 25% on more than 120,000 hotels across 120 countries. The startup was founded in Amsterdam in 2014 and has raised €21 million to date.

  • Sportihome, founded in 2017 in Montpellier, connects sport enthusiasts with hosts around the world that share homes, gear and local know-how (Stay, Share, Play) for sport-filled immersive holidays off the beaten track.

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