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Travel Tech Essentialist #33: Collaborate

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Corporates are leaner and have different priorities than a few months ago, and they are increasingly
 

Travel Tech Essentialist

July 28 · Issue #33 · 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.

Corporates are leaner and have different priorities than a few months ago, and they are increasingly turning to startups to fill in some of their gaps. The longer the current downturn, it is possible that the more startup creation we will see. Some of them started by a new breed of entrepreneurs: the recently laid off highly skilled and knowledgeable travel professionals. And this new crop of post-pandemic startups will not have to adapt to a new environment, as they will the be born into it.
By the way, thanks to those of you who have given this newsletter a shoutout by email and/or social media. Really appreciate your help in spreading the word and growing the community :)

1. The State of Online Travel Agencies 
Here is my post on the full year 2019 results and key takeaways for 10 publicly traded online travel companies: Booking, Expedia, Trip.com, eDreams Odigeo, Despegar, On The Beach, Lastminute, MakeMyTrip, TripAdvisor, Trivago. A few highlights:
  • Revenues grew at a weighed average of 5% in 2019 (down from 11% in 2018)
  • Booking + Expedia = 79% of OTA revenues
  • Highest growth: On the Beach, Lastminute and Trip.com (previously known as Ctrip)
  • Worst EBITDA: MakeMyTrip
  • eDreams ODIGEO is still the largest European OTA, but Lastminute is catching up.
2. Hotels and airlines are increasingly turning to startups
Collaborating with startups to satisfy a business need has gone from nice to have to must have in a matter of months. Touchless tech startups like Vouch (creates digital concierge bots for hotels), Intraedge (contactless temperature-check kiosks), Guestline (digital guest registration system) or Beachy (pool and beach contactless reservation and payment system) are in high demand.  Airline merchandizing platform provider Plusgrade just launched Dynamic Seat Blocker, a tool that allows passengers to purchase an empty seat or row beside them at a fixed price set by the airline. Oman Airways, Royal Jordanian Airlines, Malaysia Airlines, Etihad Airways and others are due to go live with the tool in the coming weeks. Read story - PhocusWright.
3. How JetBlue Technology Ventures’ travel startups are adapting
During times like this, entrepreneurial success relies on a startup’s ability to quickly adapt to the changing environment, pivot operations as needed, introduce new offerings, and recognize unique market opportunities. Here’s a quick look at how some of JetBlue Technology Ventures’ portfolio companies (Miles, Bizly, Unicoaero, ClimaCell, Volantio, TravelStride) have remained resilient or grown in the face of this global pandemic. Read story.
4. Investors are taking the long view on short-term rentals
Travel investor Mike Hemmeter sees a potential scenario where Airbnb continues on the path it started over the past few years and emerges as the world’s next OTA version 2.0: “They have the proprietary product, the different angle, and we will probably see more mainstream hotel product on Airbnb’s platform over time. Air and ground transportation will eventually be on it. I wouldn’t be surprised if they’re not hunting for the crown that is being worn by Booking Holdings”. Read more.
5. McKinsey’s lessons from the German travel recovery
McKinsey highlights 8 important trends that have emerged from German travel patterns (the largest European and 3rd largest global international travel market). Three of the trends:
  • Longer trips (more than 7 days) gain in popularity
  • Demand for vacation homes nearly doubled during the crisis
  • Last-minute bookings are gaining in importance
6. Meet the Israeli travel tech ecosystem
With a population of 8.5M and with the largest number of startups per capita in the world (around 1 for every 1400 people), Israel is deservedly known as the “Startup Nation”. Just for comparison on number of startups per 1400 people, the UK has 0.21, France has 0.11 and Germany 0.056. The ITTS is an established open innovation hub and a community of more than 300 travel startups working in order to make Israel the centre of the global travel tech industry. This post provides an overview of some of the Israeli travel startups with innovative solutions for the post Covid era. 
7. Lysol maker capitalizes on travel worries
Lysol maker Reckitt Benckiser Group is capitalizing on travelers’ booming interest in hygiene, launching a new professional-services business selling its cleaning products and expertise to the travel and hospitality industries. Hilton, Delta, Avis and Uber are among those that have partnered with Lysol to launch and advertise cleaning programs. “They come to brands like this to provide a stamp of approval”, says Reckitt CEO. In Q2, sales in Reckitt’s hygiene arm rose 19%, driven by North America, where Lysol sales jumped over 70%. Read story - WSJ.
8. Not the same, but…
A number of countries are seeing an infection surge and placing new restrictions on travel . Well, here is some eye candy to at least get our minds to travel and wander: 18 European hidden gems to visit when travel bans lift
Islet of Vila Franca do Campo Sao Miguel in the Azores Islands, Portugal
Islet of Vila Franca do Campo Sao Miguel in the Azores Islands, Portugal
9. Deals
  • Southeast Asian OTA Traveloka raised $250M and sees “encouraging recovery” in key markets. Prior to this, Traveloka’s most recent fundraise was in April 2019, a private equity round of $420 million. More info.
  • Gett raised $100M to grow B2B corporate travel business ahead of possible IPO. More info.
  • Employee communications platform Beekeeper topped up its Series B funding with an additional $10 million, bringing the total round to $60 million. Beekeeper’s Series B round was originally announced as $45 million in September 2019 plus a a $5 million top-up in February.
  • Bengalaru-based Mystifly raised a pre-Series B round of US$3.3 million from its existing investors. Mystifly, founded in 2009, offers a tech stack offering access to 700+ IATA and non-IATA airlines including 200+ LCC.
  • Butler Hospitality secured a $15M Series A to provide better in-room hotel experiences. The New York-based company is the first cloud kitchen for hotels, taking over a hotel kitchen and using it to provide meal delivery services to in-house guests there and in nearby hotels.
  • Tripadvisor sold its SmarterTravel Media portfolio of eight online brands to Hopjump, a Boston-based digital marketing company and provider of personalized travel recommendations and content founded in 2017. 
10. Startups
  • Airsiders is a Berlin-based startup, backed by BEUMER Group (a leading supplier in baggage handling systems), that provides virtual interlining solutions for the air-travel industry. They have recently launched a tool that tracks the safety measures taken by major airlines & airports globally. 
  • ClaimCompass was founded in 2015 and is backed by investors such as 500 Startups and Social Capital. The startup has helped over 200,000 travelers claim and receive compensation for flight disruptions. Most of its customers are from Europe, with the UK, France, Germany, Spain and Portugal accounting for over 60% of customers. ClaimCompass just completed the acquisition of Service - a travel app, based out of LA, which has brought flight compensation to the US market.
👍 If you like this newsletter, I would appreciate if you forward it to a friend/colleague or recommend it on social media. And hit reply to send me feedback, ideas or suggestions. Thank you!
Mauricio
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