Travel Tech Essentialist #56: Avalanche
A “once-in-a-century travel rebound” is how Airbnb founder Brian Chesky describes what’s coming. In Q1 2021, 24% of Airbnb trips were for stays of 28 days or more, which leads Chesky to wonder if Airbnb is a travel company or one addressing the larger category of living: “When you’re going somewhere for 28 or more days, you’re probably no longer travelling. At this point, 24% of our business is really living-we’re not just a travel company anymore”.
There are many ways to get ready for this avalanche of activity and opportunities, as today’s newsletter highlights. In #1, I make a special announcement that I hope will help on the talent front.
This newsletter has been sponsored by
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1. Introducing the Travel Tech Essentialist Job Board
I am happy to announce the launch the Travel Tech Essentialist Job Board, a new service in response to a very frequent input from many of you. The purpose of this job board is to host some of the most unique, attractive and high quality jobs in the travel tech sector. Please take a look at some incredibly inspiring jobs offered by companies such as Airbnb, Selina, Apple, Google, The Hotels Network, Caravelo, JetBlue Technology Ventures, Booking, Sonder, TravelPerk and Hopper. Whether you are an engineer, product manager, growth specialist, data scientist, designer, or simply a college student looking for an exciting internship (in Puerto Escondido, for example), this job board will be worth your time. Please let me know what you think of this initiative :-)
🔎 If you are looking to hire, please post your jobs here (free for Travel Tech Essentialist subscribers)
2. What’s your baker’s dozen?
George Mack writes about mental models, tools and tactics. He recently wrote about the bakers dozen, a model that we easily forget to apply but rarely forget when people apply it to us. A Bakers Dozen is the act of going above and beyond to give an unexpected gift the other party wasn't expecting. Dozen = 12. Bakers Dozen = 13. One of the best example of this is the fast food restaurant Five Guys who adds on an extra scoop of fries once they've filled up our cup. This gift results in customer delight, which further results in us more likely to return Five Guys + positive word of mouth. In the travel and hospitality sector, it’s always good to constantly think "Where can I give a bakers dozen?". Avi Meir, founder and CEO of TravelPerk, refers to their “7-star experience” as one of the company’s core value. 5-stars is your best, but 7-stars is going above and beyond what customers expect. The difference between a consistently good experience and a surprisingly good experience.
3. Airbnb adapting to a “once-in-a-century travel rebound”
Airbnb introduced 100+ new features designed to address what CEO Brian Chesky describes as a “once-in-a-century travel rebound” and to adapt to new traveler behaviors such as the longer stays referenced in the introduction of this newsletter. Some of these upgrades are for hosts, including duplicating the number of support agents and introducing AI to recommend names, descriptions, and the best photos to use. On the marketing front, Airbnb’s overall marketing spend is down 50% compared to 2019, even with Olympics-related advertising. Airbnb is shifting performance marketing in favor of brand marketing, which represents the bulk of Airbnb’s current marketing spend.
4. A potentially formidable subscription program
Around 500 million guests around the world have used Airbnb. There are over 7 million listings on Airbnb worldwide in 2021, which is more than twice as the total number of rooms of the top 5 hotel groups combined. I would not be surprised if Airbnb launched a formidable subscription program in the near future along the lines that Annanth describes.
5. Indonesia travel and mobility on 🔥 🚀
Indonesian online travel company Tiket.com is exploring an IPO through a merger with a SPAC for a deal that would value it at about $2 billion. Tiket was founded in 2011. Djarum Group, led by the Hartono brothers (the two richest Indonesians) acquired Tiket in 2017. Read + Bloomberg.
Indonesian rival Traveloka, founded a year after Tiket, is in advanced talks to go public also through a SPAC backed by billionaire Richard Li and Peter Thiel.
Ride-hailing giant Gojek and marketplace Tokopedia, Indonesia’s two biggest startups, said they have combined their businesses to form GoTo Group, the largest technology group in Indonesia. GoTo will be preparing for a dual listing — in New York and Jakarta — later this year. Read + Techcrunch.
Back in April, mobility and superapp company Grab announced plans to go public in the US via SPAC, seeking a valuation of $40 billion, which would be the biggest-ever deal of its kind.
6. Travel industry B2B payments
B2B payments are a $25 trillion market in the US alone. Payments cost $75 billion / year for the global travel industry, according to Amadeus. As businesses rebuild, there is an increased need to improve back-office functions such as B2B payments, a legacy issue that had typically been easily ignored or postponed. Adoption of virtual cards and alternative payment methods for B2B payments is still slow, despite their potential to smooth the payment chain, reduce risk, minimize fraud, error, and manual costs. To help understand why, Amadeus conducted a survey of 150 payment decision makers in travel. This report takes a deep dive into the findings and offers some simple steps that airlines, hotels, and agents can take to make sure that they are ready to optimize supplier payments for the future. Virtual cards are not the only alternative option. PayParc (sponsors of the previous newsletter) for example, offers a closed ecosystem of e-wallets designed for B2B payments in the travel industry, at a lower cost than virtual cards, streamlining the payment process and making real-time transfers.
7. Writing the unwritten rules for the middle seat
Owns both armrests
Must not exploit its position by annexing more leg space
Should not sleep on anyone’s shoulder
Must be taken if traveling in a couple
Should attempt to time lavatory visits with the aisle seat
8. Hotel market trends
According to the April Hotelier Pulse Report, the direct channel is showing the strongest recovery as we approach the summer months. In April 2021, the direct channel generated 78% of April 2019 bookings. Booking.com showed a slower recovery in April 2021, generating 49% of April 2019 bookings. According to this report (data probably coming from GuestCentric CRS), the direct channel has overtaken Booking.com as the main contributor of bookings for hotels. Furthermore, the US market is giving a strong indication of how the travel boom will develop globally. Hotel bookings in the US grew to 2019 levels in March 2021, and nearly doubled 2019 levels in April 2021.
9. M&A and updates
Vacation rental group Awaze has acquired three new holiday home companies in Europe, adding about 1,000 homes to Awaze’s existing portfolio of more than 100,000 properties. Awaze was formed in 2018 when Wyndham Vacations sold its European businesses to Platinum Equity for $1.3 billion. Read +.
eDreams Odigeo's subscription program reaches 1 million global members
Google announced a few travel product updates, among which was adding vacation rentals by default alongside hotels in search results of google.com/travel.
Business aviation startup Portside raised $17 million in a round led by Tiger Global Management. Founded in 2018, Portside helps aviation management companies, aircraft owners, corporate flight departments and fractional operators streamline their digital data operations. Read +.
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