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Travel Tech Essentialist #23: Onward

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"Life is a series of experiences, each one of which makes us bigger, even though sometimes it is hard
 

Travel Tech Essentialist

March 8 · Issue #23 · View online
A short newsletter every two weeks with my pick of the top 10 Travel Tech stories and innovations shaping the world's largest and fastest growing industry.

“Life is a series of experiences, each one of which makes us bigger, even though sometimes it is hard to realize this. For the world was built to develop character, and we must learn that the setbacks and grieves which we endure help us in our marching onward” – Henry Ford

1. VC funding in the time of Coronavirus
Important to take note how VCs are thinking in terms of funding and the advice they are giving to their portfolio companies.
  • In Funding in the time of Coronavirus, Mark Suster (Partner of Upfront Ventures) points out that if public markets continue to decline, VCs will focus on their existing portfolio companies first. In a war of attrition, history rewards the early and decisive actions to maximize cash and minimize burn. He also lists the many reasons why the tech industry should remain optimistic. 
  • Coronavirus: The Black Swan of 2020; this note was sent to Sequoia portfolio company founders and CEOs to provide guidance on how to ensure the health of their business while dealing with potential consequences of the coronavirus. Startups need to question every assumption, including cash runway, fundraising, sales forecasts, marketing, headcount and capital spending. Sequoia has invested in many travel startups such as Kayak, Decolar, Skyscanner and Tourlane.
2. Soaring demand for travel insurance
Moneysupermarket, GoCompare, and Compare the Market reported very large increases in British customer purchases of travel insurance policies online. GoCompare said sales of travel insurance grew by 277% over the past 7 days, and by 159% compared with the same period last year.  Read more - FT. Worldwide searches for search term “Travel insurance” on Google are spiking as well. Increases started the first days of 2020, with an exponential growth starting on the last week of february.
Searches for "Travel insurance" on Google in the last 2 years. Source: Google trends.
Searches for "Travel insurance" on Google in the last 2 years. Source: Google trends.
3. Travel companies cutting capacity to cope with reduced demand, and relaxing change and cancellation policies
  •  United Airlines announced a 10% reduction in US and Canadian flights and a 20% reduction in international flying in the April and May. It’s also freezing new hiring and offering all US-based workers the option of a voluntary unpaid leave of absence. Read more - Reuters.
  • Air France is offering free cancellations for flights to any destination booked on or before March 31 for trips between March 3 and May 31. Read more - Conde Nast Traveller.
  • JetBlue is cutting capacity by 5%, delaying or canceling upcoming events and meetings, reducing hiring and considering voluntary time-off programs. Read more - Reuters.
  • Alaska launched a Peace of Mind policy; any ticket purchased after February 27 can be changed or canceled without a fee .
  • Meliá Hotels launched a 2 day campaign offering free cancellations anywhere in the world up to 24 hours before arrival. Read more - Archyde
4. Flybe, the largest domestic airline in the UK, enters bankruptcy
Flybe, Europe’s largest regional airline, has ceased all operations, with all flights from March 5 onwards cancelled, the entire fleet of more than 60 aircraft grounded, and the likely loss of 2,000 jobs. The impact of the coronavirus on flight bookings proved the last straw for the airline which operated almost 40% of UK domestic flight. Read more - The Points Guy.
5. Expedia plans to layoff 12% of its workforce
The communication came two months after the departure of its former CEO and 10 days after Expedia Chairman Barry Diller described Expedia as ‘Bloated’ and ‘All Life, No Work’.  Read more - Skift.
6. Trivago tests a new marketing strategy after a challenging 2019
Growing competition from players such as Google and Airbnb as well as marketing shifts by OTAs led to an 8% decrease in Trivago 2019 revenue. Trivago will be testing significant changes in its own advertising strategy, most likely pushing further into performance marketing from its current 50/50 mix of brand/performance. Read more - Skift
7. Air New Zealand is looking to deliver horizontal sleep for long haul economy class passengers
Currently still a prototype (3 years of R&D in the making), Skynest would offer six bunk beds in a capsule structure, with each bed measuring in excess of 58 cm in width and 200 cm in length. Amenities would include a full-size pillow, sheets and blanket, privacy curtains and lighting designed to encourage sleep. Air New Zealand plans to make a final decision on the Skynest in 2021. Read more - RGN.
8. A new economy class middle seat brings comfort to all
Frontier, Spirit, Air New Zealand, Etihad, Korean Air and a dozen other airlines have been installing economy class middle seats with an extra inch in width. The extra space comes mostly from making the center aisle a bit narrower. Comfort scores improve across the row because the passenger in the middle isn’t infringing as much on the passengers on either side. The company behind the seat design and manufacturing is UK startup Acro, founded in 2007 and acquired in 2017 by Chinese automotive seat-maker ZTC for $77 million. Acro says 80% of its deliveries for Airbus planes the past two years have had the wider middle seat. Read more - WSJ.
9. Funding 💰
  • Autonomous air mobility company Volocopter has added another $40 million to its Series C funding, taking the round to $94 million. 
  • UK-based Five announced a $41 million Series B round, bringing its total funding to $77 million. Founded in 2015, Five helps partners with their self-driving programs ahead of the mass commercialization of self-driving technology.
  • Dutch hospitality tech startup Oaky raises a Series A round of $9.5M for geographic expansion and to develop upselling and guest personalization solutions for hoteliers. Oaky currently works with 1,500 hotels in 90 countries around the globe.
  • Xband, a cultural tourism business in China, has raised $28 million in a Series B funding round. Founded in 2016, Xband creates rural villages that can serve domestic tourists.
  • Munich-based Lanes & Planes, a provider of tools to manage business travel and expenses, closed a $10 million Series A round led by Battery Ventures.
  • Mobile identity solution Airside got a strategic investment from Amadeus Ventures (undisclosed amount). The Washington DC-based startup previously raised $8 million. Airside allows US citizens and Canadian visitors to expedite and securely pass through US Customs with a mobile passport app.
  • Munich-based hospitality startup limehome raised $22.5 million to expand its hotel platform across Europe. The round was led by existing investor Lakestar.
  • Berlin-based Tier, the European e-scooter rentals startup that operates in 55 cities across 11 countries, has extended its Series B round to over $100 million, up from $60 million announced in October. 
  • Multimodal booking engine Kombo has received a €400,000 bridge financing from the founders of Capitaine Train, a booking engine that The Trainline bought for $190 million in 2016.
10. Cool startups
  • YouVisit provides interactive and immersive solutions for virtual campus tours to millions of students in over 600 higher education institutions. In a COVID-19 context, the value proposition of this solution increases significantly.
  • Analyzing more than 17 million daily flight booking ForwardKeys (based in Valencia, Spain) provides travel industry trends and business intelligence to help companies improve their tactical decision making.
  • Sitata is a Canadian risk management startup with a mission to keep travelers safe while they travel. It provides real time intelligence for leisure and corporate travelers. Sitata detected what seemed like “a few cases of pneumonia” in Wuhan on Dec 30th and sent warnings to travelers on the ground in Wuhan.
PS. Combating the Infodemic
The World Health Organization has warned of a massive ‘Infodemic’ (information epidemic) that makes it hard for people to find trustworthy sources and reliable guidance. I recommend that you follow this curated Twitter list called COVID-19, that Tim Ferriss put together, consisting of eight people he trusts on this subject: “Nearly all of them are MDs with infectious disease expertise or investors and computer scientists who can think well in terms of exponential growth, compounding, etc.”
👍 If you like this newsletter, I would appreciate if you forward it to a friend or colleague. And hit reply (or via Twitter) to send me feedback, ideas or suggestions. Until next time,
Mauricio
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