Without constraints, we’re left with no tension and no chance for innovation or surprise. All creative work has constraints, because all creativity is based on using existing constraints to find new solutions. –Seth Godin.
Booking Holdings CEO Glenn Fogel said this week that he still thinks it will take years and not quarters before the travel market returns to pre-COVID volumes. The collapse of travel demand is indeed one gigantic once-in-a-lifetime constraint. However, there are pandemic-native companies and others that are adapting to the new constraints in a way that is resonating with travel consumers. Such is the case of RVShare (166% year on year growth), Inspirato (highest occupancy ever), Kombo (+100% year on year growth), or Hopin (16.000 monthly attendees in March, 175.000 in June), among others.
1. Expedia, Booking, TripAdvisor, Trivago, MakeMyTrip Q3 results
Q3 saw an improvement in Year on Year (YoY) declines compared to Q2
Booking Holdings: Q2 -84% Q3 -48%
Expedia Group: Q2 -82% Q3 -58%
TripAdvisor: Q2 -86% Q3 -65%
Trivago: Q2 -93% Q3 -76%
MakeMyTrip: Q2 -95% Q3 -82%
But the trend has worsened in October as COVID cases resurge in EU, US
Booking.com room nights, net of cancellations, were -87% YoYin Q2, improved to -43% in Q3 but in October, it worsened to around -58% and -70% YoY at the beginning of November.
Alternative Accommodation demand continues to grow
Booking Holdings continued to see an increase in the mix of customers booking alternative accommodations YoY in Q3 (approx. 1/3 of all new bookings in the qtr); Within the domestic business, alternative accommodations grew low double digits, while the rest of the business grew low single digits.
Expedia: Vrbo continued to perform strongly in Q3 with both revenue and bookings up YoY.
Domestic travel has outperformed International and US has outperformed other regions
Booking Holdings: The improvement in booking trends in Q3 vs Q2 was “almost entirely” driven by domestic travel, with a “very modest” improvement in international travel;
Expedia: The US was “by far the strongest” of Expedia’s major markets in Q3 as “decline rates there were lower than the average and lower than any of our other territories”
Air and business travel - still struggling
Expedia’s air revenue was down -87% YoY in Q3, compared to -52% for lodging revenue.
Expedia’s Retail segment revenue declined by 52% while its B2B segment revenue (which includes corporate travel Egencia) declined by 72%
MakeMyTrip’s air revenue was down -90% YoY in Q3, compared to -82% for hotels and packages.
2. What the data says on Airbnb
Transparent is a fantastic data intelligence company that provides data analytics products for companies seeking a better understanding of the short term rental industry. They just released an analysis on Airbnb, with tons of insightful and revealing data, addressing 5 key questions:
Who are today’s Airbnb hosts and how loyal are they? Analysis & data.
How powerful is the Airbnb brand, and what does it imply for Airbnb’s ability to capture consumer demand? Analysis & data.
How meaningful and relevant are Airbnb’s competitors? Analysis & data.
How is Airbnb adapting beyond its home-sharing roots? Analysis & data.
How has Airbnb resisted the COVID crisis and adapted to shifting demand? Analysis & data.
3. Co-living could play a transformational role in a post-pandemic world
Social distancing has not, as many predicted, diminished interest in co-living. Instead, it has heightened it, as people long for the comfort and support of community. Chip Conley writes about why investment and development in co-living will continue despite ongoing economic turmoil and travel disruptions. Read more - Fast Company
4. Members-Only travel is booming
“This past August, we saw the highest level of demand since 2013”. This does not sound like a 2020 quote, but it is. It’s a statement from James Henderson, CEO of Exclusive Resorts, a membership-based club that owns about 400 private residences and villas. After an $150,000 initiation fee, its members must book a minimum of 15 days per year. Privatized travel (resorts, hotels, ranches, destination communities and clubs) has been booming in a year where much of the industry is struggling. Read more - NYT.
5. Latin America travel search and booking dynamics
I recently wrote a post about travel search and booking behaviors in Latin America. Some conclusions:
OTAs are the leading channel for booking accommodations.
Supplier direct is the leading channel for booking flights.
Less than half of travelers who initiate their flight search in an OTA end up booking there.
Many more consumers that start searching travel on search engines end up booking directly with suppliers than with OTAs.
The highest “retention” rates (search and book in the same channel) are with flights + airlines and also with accommodations + OTAs.
There is significant transfer from searching flights on OTAs to booking on airlines. Less transfer with searching accommodations on OTAs and booking directly with suppliers.
6. Emirates and Dubai International lead the way towards a seamless and touchless airport experience
Emirates revealed a new biometric experience through Dubai International Airport. The new technology enables passengers to have a truly contactless travel journey from check-in to boarding gates, improving customer flow through the airport. Utilizing facial and iris recognition, Emirates passengers can check in for their flight, complete immigration formalities, enter the Emirates Lounge, and board their flights, simply by walking through the airport. Read more - Simple Flying.
7. Updating the airline hub model
COVID-19 has drastically decreased airline traffic across all routes, but the volume of connecting traffic has been hardest hit. This McKinsey report asks whether the current crisis will lead to structural changes within the industry. This includes a debate about when and if connecting traffic will return, and whether a rethink of the hub-and-spoke model may be necessary.
8. It’s a bird! It’s a plane! It’s an OTA! It’s a lifestyle app!
AirAsia is one of the largest low-cost carriers in Asia and the group’s CEO has long been insistent on his vision of becoming a lifestyle brand. AirAsia.com just launched the new travel (multi-airline and multi-product) and lifestyle app. The company believes that price control and price ownership gives them a unique advantage over classic OTAs: “Airasia.com is an OTA that owns metal (an airline). We know the yield curve of every flight, route and sector and are able to leverage unsold inventory by product bundling with flights for as low as USD 1. This means that we are able to consistently guarantee the best price for our travel products, unmatched by any other OTAs.” Still, there is a lot of room for improvement in delivering a seamless booking experience, particularly its 3rd party integration for non-AirAsia flight bookings. Read more - China Travel News
JetBlue plans to offer short-term rentals with the help of a partner not named yet, possibly by the end of the year. The airline plans on offering the accommodations under its own brand, and would handle the customer service in-house instead of leaving that to the partner. Read more - Skift (paywall)
9. Deals and funding
London-based Hopin raised $125 million for its online events platform on the back of surging growth. Monthly attendees of events on its platform has expanded from 16,000 in March to 175,000 in June to more than 3.5 million users now.
Cleverea is an InsureTech startup based in Barcelona with the vision to disrupt the way consumers perceive, buy and consume insurance. Its insurance portfolio includes three travel products: parametric flight delay, checked baggage and missed connection insurance.
Based in Madrid, Revyoos is a review aggregator for short-term rentals. The platform helps property managers and owners gather all their reviews across different channels and show them on their own website.
Mystery City is an Amsterdam startup that gets players to explore cities through history-rich offline treasure hunts. Players learn about the city’s history as they navigate throughout the city to discover secret societies, seek lost treasures, and solve mysteries. Currently in London, Amsterdam, and Barcelona.
P.S. 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 contact me for possible collaborations.