Travel Tech Essentialist #84: Reality Check
Seems like every Venture Capital company out there is asking founders to prepare and brace for impact. In #1 you’ll see Sequoia’s and YC’s timely advice to founders. Marc Andreessen said that the life of any startup can be divided into two parts: before and after Product-Market Fit. You can read about Product Market Fit and travel startups in #2. Read on for a lot more; I hope you’ll enjoy it.
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1. Sequoia warns founders of ‘Crucible Moment’ and advises how to avoid the Death Spiral
Sequoia is now back with another warning: “Adapting To Endure”, a 52-page deck (not behind a paywall) about the ‘crucible moment’ for startups, given the prevailing uncertainty and the slowdown forcing layoffs and cutbacks. Some of the key takeaways:
No V-Shaped recovery. Startups should focus on extending the runway and fully examining the business to see where costs are out of control.
Increased cost of capital. Negative real interest rates led to easy access to capital and record valuations in 2020 and 2021. With rising interest rates, “money is no longer free”.
Profits over growth. Growth at all costs is no longer being rewarded.
And on this same topic, here is the email content that was sent by Y Combinator to its portfolio founders, advising them to “plan for the worst”.
2. Travel Startups and Product-Market Fit
I reached out to the founders of 11 travel startups and scaleups from the US, Germany, Spain, Colombia, and Pakistan to get their brief responses to the following question: Do you consider that you currently have Product Market Fit? (Y/N). If yes, how long did it take you to find PMF, and what made you realize that you had reached it? Here are their answers.
3. If I was an OTA. And if I lost my filter…
Christian Watts, founder & CEO at Magpie Travel thinks (and I agree) that OTA executives do a poor job of defending themselves against all the OTA criticism. So he wrote a provocative post with what he’d say in response to the Top 10 most avoided questions asked to OTAs ( “if I was running an OTA, and my PR department was on vacation”, he adds). If I was an OTA. And if I lost my filter.
4. Have you tried Bionic Reading yet?
5. Q1 growth rates public companies
Adding a few more publicly traded companies to the Q2 2022 revenue growth ranking. eDreams Odigeo had the biggest year on year growth by a large margin.
6. What about revenues for non-publicly traded travel companies?
I’ve gotten some requests to show revenues and growth rates for non-publicly traded travel startups, but of course, that information is not publicly available. But we can try to build it if you’re open to it. If you have a travel startup and you are willing to share Q1 2022 revenue data and % year on year change, please fill in this form. If I get enough completions (at least 10 or so), I will share this information in the next newsletter.
7. eDreams Prime
"We have continued to make strong progress in revolutionising travel and reinventing the travel experience through the ongoing success of our global, leading subscription model, Prime.” — Dana Dunne, CEO of eDreams ODIGEO, May 2022.
The Prime subscription program, has indeed grown at a very strong pace in the last 5 years:
I’d think that one of the goals of building up a subscription program like this would be in reducing acquisition costs per booking, as subscribers would tend to be more loyal, compare less, and go straight to an eDreams Odigeo brand when they need to book a travel product. This would lead to a reduction in costs mainly from high cost acquisition channels such as search (Google) and metasearch. However, the opposite has happened. See here the Variable Costs (of which Marketing Costs are the largest component) as % of Revenue Margin:
8. Hotels Using NFTs for various applications
Wall Street Journal article on how hotels are starting to convert room nights into nonfungible tokens (NFTs). The article highlights Pinktada, a recently launched hospitality token marketplace with hotels in the Caribbean, Mexico, San Francisco and Hawaii, where room-night tokens (RNT) can be purchased or sold at any time. The sale is final from the point of view of hotel owners, so their revenue is guaranteed whether or not the room is used. If travelers change plans, they can use the tokens for other Pinktada hotels or sell them to another traveler in the Pinktada network. Another startup using NFTs is Stay Open, which converts unutilized retail and office space into hostel-like lodgings.
9. Marriott launches hospitality industry’s first media network
Marriott launched the Marriott Media Network, using its first party data to give advertisers an omnichannel solution for reaching high-intent travelers on the path to purchase, pre-arrival and during their stay. The network aims to provide premium ad inventory over a variety of Marriott’s owned channels on which brands can deliver curated experiences. The launch, which Marriott claims is a first for the hospitality industry, follows explosive growth in the retail media space as advertisers look to better target and track consumers amid a tightening of data privacy rules on other digital platforms. Read + Marketing Dive.
10. Uber Travel
In April, Uber announced that later this year its UK customers will be able to book trains, buses and car rentals on the app. A couple of weeks ago it released new travel features that allow customers to reserve rides for each leg of their travel itinerary, by simply connecting their Gmail account. Uber Travel is available in the US and in the coming weeks in Canada. Read more.
Travel Tech Essentialist job board
There are currently 121 exciting jobs posted in the Travel Essentialist job board. This job board can be a great resource whether you’re hiring or looking to be hired. Here are just a few of the amazing jobs seen on the board:
Caravelo: Presales Manager (Barcelona)
The Hotels Network: Market Manager Mexico (Mexico City)
TravelPerk: Business Operations US Lead (Miami)
Lastminute.com Group: Social Media Manager (London)
TripActions: Senior Frontend Engineer, Fintech (Palo Alto, California)
Browse more open roles (or add your own open roles) at Travel Tech Essentialist Job Board
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Have a great week,