Travel Tech Essentialist #46: The Matrix

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In the first story of this newsletter, you can link to the Travel Sector Opportunity Matrix post I wrote thanks to the input you all provided. In that post, I also write about what I’m most excited to follow closely this year. Lots of funding and acquisitions activity this week, with a large presence of German and British startups and entrepreneurs.

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1. Travel Sector Opportunity Matrix

You might recall that in the previous newsletter I showed a framework for decision-making proposed by an Andreessen Horowitz partner and I asked for your input in order to adapt such a framework to the travel industry. Thanks to all of you who provided your input. In Travel Sector Opportunity Matrix you can see the results and analysis. In that post, I also included my own travel outlook and the areas I will be paying particular attention this year.

2. The vaccination race

This is the most important graph for the travel sector’s recovery. Israel keeps teaching the world a lesson. With 1/4 of its population vaccinated (including 83% of those older than 70), Israel expects to have its entire population over age 16 vaccinated for Covid by end of March. Elad Gil writes on the reasons why Israel has succeeded at Covid vaccination in the hopes that other countries will follow suit.

3. Airline insights 2020

Aviation data and analytics company Cirium recently published a detailed 70 page report on the state of the airline industry and outlook for recovery. If you want to first look at my summary of the key insights and trends as well as the data I found most revealing, please take a look at this document first. The type of global and regional data you’ll find for 2020 and 2019 includes flight and passenger volume, top airlines in flight and passenger volume, top flight routes and busiest airports. The full 70 page report is here (will ask you to register to download it).

4. Advice for downturns (and pandemics)

Here are a couple of HBR articles with good advice on how to move forward in downturns. The first one is more apt for startups and the second one for larger companies.

  • In a 2020 HBR article titled A 5-Day Plan to Keep Your Company Afloat, Steve Blank, the Silicon Valley entrepreneur and originator of the lean startup movement, offers a five-day playbook for survival, with an emphasis on speed. He captures a company’s ability to survive in this downturn in a simple formula: Survival = (speed of your understanding of the situation) x (the magnitude of the pivots/cuts/lifeboat choices you make) x (the speed of your time to make those changes).

  • In the 2019 article Companies Need to Prepare for the Next Economic Downturn, BCG Chairman Martin Reeves gives advice on the set of actions common among the 14% of companies that actually gain competitive advantage during and after a downturn (based on an analysis of 5000 public companies). The companies that weather downturns successfully tend to respond differently on a few key dimensions: they act early, they take a long-term perspective and they focus on growth, not just cost-cutting.

If the previous advice fails, there is always this approach for strategic planning:

5. Trends to keep in mind in a year of transitions

Notwithstanding how tired I am of buzzwords such as new normal, this report by McKinsey is worth your time: The next normal arrives: Trends that will define 2021—and beyond. Among the topics covered in some detail are:

  • Outlook on leisure and business travel

  • The crisis sparks a wave of innovation and launches a generation of entrepreneurs

  • Digitally enabled productivity gains accelerate the Fourth Industrial Revolution

  • Pandemic-induced changes in shopping behavior

  • The future of work

6. Amazon Air expands its airfreight operations

2020 was a lost year for commercial passenger airlines, but the demand for air cargo was and continues to be strong as a result of the surge in online shopping (among other reasons).  While passenger airlines have been reducing their fleets, cargo carriers have been doing the opposite, with Amazon standing in the front of the line to capture this opportunity.  Amazon is expanding its Amazon Air fleet by purchasing its own planes (from Delta and Westjet), as opposed to operating under leasing agreements as it was doing before the pandemic (read + Simple Flying). Air cargo construction and activity is also booming, with airports across the US devoting more space to freight shipments.  Again, in large part because of Amazon. At the Cincinnati/Northern Kentucky International Airport (CVG), Amazon Air is completing a 798,000-square-foot sorting center to accommodate 20 aircraft.  This airport will be the center of Amazon Air’s national air transport network, which now has more than 70 aircraft and hundreds of daily flights to 35 other cities in the United States. Read + NYT.

7. IATA’s digital health solution on track to be rolled out to major airlines in March

IATA’s head of airport, passenger and security products, Alan Murray, says they are making fast progress to bring its Travel Pass digital health credential solution to market, and that most of the world’s biggest airlines will be using it from March on. Travel Pass is a mobile app that helps travelers store and manage their verified certifications for COVID-19 tests or vaccines, providing more security and efficiency than paper processes and addressing some of the challenges with current testing such as the time it takes for agents to verify the tests and the proliferation of fake tests. Read + Phocuswire.

8. Funding

  • Fintech company Uplift closed a $68 million credit line deal with Atalaya Capital Management. Uplift offers simple, flexible payments for travel and has raised about $695 million since it was founded in 2014. 

  • Hipcamp, the San Francisco-based platform for booking campsites, RV sites and other outdoor accommodations, raised a $57 million Series C, at a valuation of more than $300 million (up from $127 million in 2019).

  • London-based corporate ground travel platform Gett  adds a $15 million extension to the $100M round announced in June 2020. 

  • Kyte raised $9 million to deliver rental cars to your doorstep.  Kyte was founded in San Francisco in 2018 by 3 German entrepreneurs with prior experience in BMW, McKinsey and Uber.

  • OYO raised $7.4 million in a series F round. 

  • Netherlands-based Kambr, a specialist in airline revenue management technology, closed $3 million in seed funding, bringing total funding to $7 million following an investment of $4 million announced in September 2019.

  • Luxtripper, the London-based luxury travel company closed a €1.35 funding round, bringing total investment to €3.49 million since 2015. 

  • London-based SalesTrip raised a $1.4 million seed round for its expense management and travel booking software that will be used to scale operations in the US.  Launched in 2019, the startup has to date raised a total of $3 million.

9. Acquisitions and partnerships

  • London-based Hopin, a startup that sells a technology platform for hosting digital events bought live-streaming startup StreamYard for $250 million. Hopin raised a $40 million Series A in June and a $125 million Series B in November at a valuation of $2.1 billion.

  • Barcelona-based corporate travel TravelPerk acquired US-based NexTravel, which has some 700 customers globally and has processed around 300,000 trips since its launch in 2015. 

  • French peer to peer RV rental marketplace Yescapa acquired its German competitor SHAREaCAMPER.

  • Trivago acquired, a Germany-based startup targeting travelers who are looking for short breaks.

  • Louis Vuitton’s city guides will now be accessible through Apple Maps. The partnership could help Apple align itself with luxury fashion consumers, as well as boost Louis Vuitton’s presence in the travel and tech industry.

10. Startup corner

  • Wikiloc is a Girona (Spain) based 15 year old outdoor trails app, bootstrapped and relying 100% on word of mouth. It has 11 employees, 7.5 million members, and 20 million trails, and grew by 70% in 2020. Read + (in Spanish).

  • Read about how Dutch hotel group CityHub is revitalizing the world of hospitality for millennials and generation Z with its “poshtel with a digital twist” concept.  

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