Travel Tech Essentialist #30: Light

This is the Travel Tech Essentialist newsletter sent on June 10th 2020 to my newsletter subscribers. If you are interested in getting in your inbox my top 10 travel tech trends and stories every two weeks, you can sign up here (free). Thank you!

Domestic travel data is providing a glimmer of light at the end of a long tunnel. Vacation rental bookings in many markets are now above early February levels and some travel categories are booming. There is still a ways to go, but seeing light is good.

1. Global vacation rental bookings skyrocket by 127% over 6 weeks

According to AirDNA data, global vacation rental bookings found rock bottom the week of April 5th, with just over 916,000 bookings. By May 18th they had surged 127% to 2.08 million. The week of June 1–7, many markets were seeing new bookings above pre-COVID levels (Feb 3–9): France +51%, United States +47%, Germany +38%…

(elaborated with AIRDNA data)

2. Domestic travel is driving the surge in demand for vacation-rental sites

Airbnb saw more nights booked in the US between May 17 and June 3 than the same period in 2019, and it is seeing a similar boost in many other markets. So much so that Airbnb has kept alive its plans for a 2020 IPO. US searches for Expedia’s Vrbo are now up compared to this time last year, but hotels and the wider Expedia brand searches are still down more than 60%. People are eager for open spaces like beach towns or mountain villages, which is sparking the vacation rental rebound. Since the pandemic began, the % of bookings on Airbnb within 322 kilometers has grown from 33% in February to more than 50% in May. Read more — Bloomberg.

3. RV and outdoor recreation companies see a boom in bookings

Outdoor recreation and transportation businesses are reporting strong bookings in 2020. Traffic to the top-ranked campground search app The Dyrt is at a seven-year high as of May 2020. PaulCamper, a European recreational vehicle rental platform, is seeing a 100% growth in year-over-year bookings. Peer-to-peer recreational vehicle rental booking service RVshare said April generated the highest recorded booking numbers in its history. Read more.

4. Elevating customer experience excellence in the next normal

A new McKinsey analysis looks at consumer trends along two criteria — user growth since the pandemic hit and the likelihood that these behaviors will continue — and defines the 3 keys that will define customer experience in the post-pandemic era:

• Digital excellence — Prepare for a digital recovery
• Safe and contactless engagement — Accepting a safe and contactless customer journey as the default
• Dynamic customer insight — Anticipate customer feedback, not just ask for it

5. Possible futures for a post-pandemic travel industry

Mario Gavira has ample experience and deep know-how on the online travel sector. He’s also a talented and creative writer. In his latest 4-part post, he forward-engineers four possible scenarios for how the travel industry will emerge post-pandemic:

• Scenario 1: Travel swings back to normal in 2021
• Scenario 2: The end of mass tourism as we know it
• Scenario 3: Big is beautiful in the new travel order
• Scenario 4: Travel moves from atoms to bits

6. Contactless tech could be travel’s next big thing. Or not.

Several tech firms are hoping the travel industry will rush to buy solutions designed to reduce how much contact travelers have with surfaces touched by strangers and how often they interact face-to-face with staff. Skift takes a closer look at what hotels, airports, airlines, and corporate travel managers may adopt in contactless tech in an attempt to separate the real from the hype. Read more.

7. Business travel is picking up

Not all business meetings can be replaced by Zoom. Each dollar invested in business travel produces $12.50 in revenue and $3.80 in profits, according to an (old) Oxford Economics study. Because business travel is a business requirement, I think that it will rebound sooner than what is generally assumed. Coupa is a publicly traded cloud platform for business spend, and its booking data shows some optimism for travel to pick up in the fall, when business travelers expect some restrictions to be lifted. Based on their data and analysis of past downturns, Coupa estimates 2021 business travel bookings to be at around 2016 levels, or approximately 15% below 2019. Read more.

8. Recovery curve odds

Lufthansa Innovation Hub’s Travel and Mobility Tech compares the odds for V-curve vs. U-curve vs. L-curve recoveries by looking at data and measurable real-world observations rather than theoretical spreadsheet models. Read more.

9. The fate of hotels is in the hands of OTAs

This article predicts OTAs will be a key source of near-term hotel bookings.

• The new consumer will be more price conscious and will go to OTAs to look for lower prices, promotions and loyalty program benefits.
• Like business, hotel marketing teams and budgets will likely not return all at once, either, making OTAs a less risky and more cost-effective way to get customers.
• OTAs are using aggressive tactics, such as geographic fencing, where travelers are shown different rates depending on their origin.

10. Funding

• The Hotels Network raised €10M in a Series B round led by Elaia, with existing investors Seaya Ventures and Seedrocket 4Founders also participating. The Barcelona-based startup provides its more than 5000 hotels in 96 countries with technology to help boost direct sales by personalizing user experience. Founder/CEO Juanjo Rodriguez: “Usage of our product by our clients increased 120% during the first weeks of the crisis, which indicates just how essential it is.”
• Vacasa raised a $108 million Series D strategic investment round led by Silver Lake. Silver Lake’s participation marks its 3rd high-profile investment in recent weeks: in April, it participated in Airbnb’s $1 billion fundraise and Expedia’s $1.2 billion equity investment.
• Travelport received commitments for $500 million in financing from existing investors Siris Capital Group and Evergreen Coast Capital, as well as an additional $500 million of available financing capacity.

P.S. Webinars

Here are some upcoming webinars, in case you haven’t reached Zoom overload:

• June 10th. More Than Point-to-Point: How Airlines Will Rebuild Their Networks. Organized by OAG. It took place earlier today, but here is the recorded video.
• June 11th. Interview with Raj Singh, Managing Director at JetBlue Technology Ventures. Carolyn Corda, CMO of ADARA will also present their latest traveler trends and insights. Organized by Adara. Info.
• June 15th. A Series of Conversations with Industry Leaders. Hotel focus. Organized by Travel Weekly Info.
• June 16th. Business Travel — Unlock Cost Savings with Unused Tickets and Waivers. Organized by Business Travel News Info.
• June 23rd. How the Travel Industry is Preparing for Recovery. Organized by Expedia. Info.
• IATA has scouted its innovation network and sourced tech players with strong potential to support airlines in this time of crisis. Next webinar is June 24th, but here you can see previous startups featured (and their decks).

👍 If you like this newsletter, I would appreciate if you forward it to a friend or colleague. And hit reply to send me feedback, ideas or suggestions.

Mauricio