Travel Tech Essentialist #58: Second Half
Travel brands overall are exiting the pandemic with higher consumer trust than when they entered it (#1); the 4th largest airline in the world expects business travelers to come back at 100% (#7); blockchain-based new business models controlled by and benefiting the community that creates the value (#2); airlines and hotel brands creating a closer connection to customers (#3, #5, #6); great travel brands, large and small, looking for talent (#10) These are some of the many reasons to be optimistic as we start the second half of the year. I hope you have a great H2 and a great summer.
This newsletter has been sponsored by Velocity Ventures
Velocity Ventures is Southeast Asia’s first Hospitality & Travel sector-focused venture capital firm. Based in Singapore and with a Covid-19 themed investment mandate, the US$20 million fund focuses on supporting distressed and disrupting Seed to Series A tech-enabled startups.
The first closing brings the fund to 40% of the US$20 million target and is continuing to source further capital commitments for its final close at the end of 2021.
If you’re a Hospitality & Travel start up looking for funding, we're always on the lookout for the next best startup to invest in! Apply now.
1. Trust in Travel and Hospitality
Morning Consult surveyed 4,400 US adults to gauge their overall trust in the industry and to learn how trust is built—and how it’s broken. Key takeaways of their report:
Eight of the top 10 most trusted brands are hotels or resorts, with only one airline (Southwest Airlines) and one OTA (Expedia) on the list. Thirteen of the 20 top most trusted travel and hospitality brands are hotels.
Cruise lines and airlines have to work harder to earn trust from consumers than hotels do, simply due to the nature of their business.
65% of US adults say they would stop purchasing from a brand if it did not follow safety precautions. Another 62% say the same if the company failed to regularly clean.
58% of business travelers said they plan to travel for business this summer and 62% plan to travel for business this fall and winter, but 3 in 10 said they don’t plan to travel for their jobs for the rest of the year.
For consumer trust, the pandemic was a net positive for the travel industry: Brands overall are exiting the pandemic with higher consumer net trust than when they entered it
2. Blockchain travel’s new venture: a decentralized Airbnb
Much is written about how blockchain will disrupt the financial sector. I think we will start to see blockchain applications in a growing number of industries, including travel. Binance-backed and blockchain-based OTA Travala.com launched Dtravel, a decentralized vacation rental service that gives the community a stake in the platform. It has raised $5 million from Kenetic Capital and other VCs. Unlike the setup on a centralized platform such as Airbnb, Dtravel homeowners and guests share a joint ownership of the platform as well as aligned interests and incentives. Dtravel is community owned through the DAO (decentralized autonomous organization), allowing hosts and guests to vote on issues that include everything from last-minute cancellations to how resources are spent. The TRVL token will be the native token of Dtravel, and the company plans to incentivize its by giving $35,000,000 worth of TRVL to the first 100,000 host registrants. Read + Coindesk.
3. Hospitality and wellness
Accor is a strong player in the hospitality wellness segment. Digital technology is one of Accor’s 6 fundamental pillars to foster wellness for their hotels and spa guests. With this in mind, Accor has teamed up with wellness app Calm, to offers its guests guided meditations, atmospheric music, nature soundscapes, and over 150 sleep stories. Read here about this and other wellness partnerships. My wife has long said that a hotel brand needs to “own” the digital wellness space by teaming up with the likes of Oura, Whoop or Apple in the hopes of proving that guests improve their fitness, sleep, and recovery during their stay. Maybe Accor will be that brand?
4. Outdoor + travel + insurance = $
Another sign that investors love travel + insurtech: Outdoorsy (US-based RV and outdoor trip marketplace) raised $120 million to expand the core business and, specifically, support its Roamly insurance product for travelers and RV owners. Read + Phocuswire.
5. The creation of lifestyle brand identities
Marriott International Global Brand Leader, Toni Stoeckl talks about the process behind the creation of lifestyle brand identities. Lifestyle hotels are soaring in popularity around the world, and this shift challenges the norm of how to think hotels need to be run in every aspect. The focus is more on the experience than in the transaction. This consumer is very much a DIY self-service-driven consumer – taking Ubers and ordering food at home. They don’t want to go to the front desk to check-in. They don’t want to go to that traditional service model of having a bellman bring up their bags, so at Moxy, you check-in at the bar. The use of technology is also making Marriott rethink the entire service interaction, Read + Hotel Management.
6. Airlines: complete retailing
This report elaborated by the Accelya and Atmosphere Research seeks to uncover the DNA of a profitable future for airline commerce. Some highlights:
Airlines expect the share of their direct digital channel to grow from 40% to 46% by 2023.
Ancillaries products contribute close to 25% of Low Cost Carriers revenues.
Airlines intend to expand “Direct Connect” connectivity with intermediaries
Accurate demand forecasting is the airline’s top revenue management priority.
68% of airlines use or intend to use NDC as part of their retailing and distribution strategies.
An extensive assortment of “value add” optional products, and the ability to sell them, is one of the pillars of the move towards “complete retailing”.
7. United Airlines sees business travel coming back at 100%
United Airlines just placed its largest plane order ever and the biggest of any airline in a decade: 200 Boeing 737 Maxes and 70 Airbus A321neos. United expects to fill these seats with a growing number of business travelers, which is why the new planes will add 75% more premium seats, TV screens for all passengers, and larger overhead bins. “Everything we see every week makes us even more certain that business travel and international travel are ultimately going to come back, some of them will be different, but they are ultimately going to come back at 100%.” United CEO Scott Kirby. Read + Morning Brew
8. Upgrades from basic economy
Basic-economy tickets are generally non-refundable and unchangeable. United Airlines said it would allow passengers to upgrade and makes changes to their basic-economy tickets. On American and Delta, basic economy tickets remain “use it or lose it.” This move by United made me think about this cartoon from a few years ago.
Denver-based Collective Retreats announced a $23 million Series C round led by Fireside Investments, outdoor marketplace Outdoorsy and existing investors including Revolution's Rise of the Rest Seed Fund.
Private equity firm H.I.G. Capital acquired a majority stake in Texas-based Enseo, a provider of in-room entertainment, Wi-Fi, smart room automation and energy management for the hospitality industry.
10. Travel Tech Essentialist job board
Browse all open roles or add your own at Travel Tech Essentialist Job Board. Here’s a sample of the 40+ jobs currently on the board:
TripScout: Product Designer (Remote, Washington DC)
TripScout: Business Operations Associate (Remote)
Boatsetter: VP of Engineering (Miami, Seattle)
Google: Solutions Engineer, Google Flights (Cambridge MA)
Hipcamp: Director of Partnerships (Remote)
Travelstride, UX Designer (Austin TX)
TravelPerk: Data Analyst (London)
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