Investors are paying attention to the companies trying to capture the travel spending of small- to medium-sized businesses. As these startups attract increased venture funding, though, it's important to remember that corporate travel at large is extremely resistant to disruption.
The battle for supremacy among business travel startups has heated up over the last month.
A few weeks ago, Barcelona-based TravelPerk raised $44 million to accelerate its growth among travel management solutions for small- to medium-sized businesses.
On Thursday, Palo Alto’s TripActions announced it has raised enough money to vault the company to unicorn status. Scaling is hard, and expensive, particularly when you need to acquire customers around the world to compete.
Skift Travel Tech Editor Sean O’Neill took a deep look at the competition between these startups jockeying for position in this relatively untapped market, and what exactly these giant funding rounds mean for corporate travel as a sector. Is funding cheap, or is there a big business opportunity here? Well, why not both. Check out the analysis below.
We’ve also got insights from the Chinese corporate travel market along with updates on how Marriott and Amadeus have fared so far this year.
— Andrew Sheivachman, Senior Editor
Airlines, Hotels and Innovation
Corporate Travel in China Means Managing Complexity: While China is an attractive market, it’s traditionally been a tough place for corporate travel. Joint ventures between global travel management companies and Chinese travel providers are combining local market expertise with travel management standards to reduce friction for corporations.
TripActions Brings in Silicon Valley Heavyweight to Lead $154 Million Investment Round: Renowned venture capital firm Andreessen Horowitz has famously pushed the notion that “software is eating the world.” It seems likely the firm believes software is now going to upend how companies book travel, in particular, and that companies like TripActions will profit from the shift.
Amadeus Revs Up Spending for Product Development: Amadeus is spending more heavily on R&D than its competitors, which it is betting augurs well for its future.
Cost Cutting Could Lead to Big Changes for Meetings in 2019: Planners have to get creative as both expectations and costs are set to increase in 2019. Technology can only do so much and event design will shift to reflect the financial priorities of organizations holding events.
Marriott CEO: Don’t Worry About Our Soft Third Quarter: Marriott may have had a relatively challenging third quarter, but it’s not stopping the company from continuing to work on its Starwood integration — or scope out other companies to buy, even if the global economy seems uncertain.
Booking Holdings Makes Major Pivot Toward Prepaid Hotel Bookings: It’s back to the future for Booking Holdings, which is pivoting to emphasize the prepaid hotel model that its Booking.com unit basically spurned for most of its history. This means better cash flow because consumers pay when they book, and higher commissions.
The Future of Travel
Hyatt Is Altering Its Loyalty Program to Battle Abuse: Hyatt retooled its “cash + points” award booking calculations last week and it illustrated the perils of building out a loyalty program without expecting members to abuse it.
Icelandair to Buy Rival Wow Air: This looks like a marriage of convenience for the carriers. Both are struggling, as is the wider Icelandic tourism industry. We’ll have to wait and see whether one is better than two.
SAS New Emotional Video Takes the Prize for the Best Travel Ad of 2018: “Travelers will forget what we say in our ads, they will forget what we do with our promotions, but they will never forget how we make them feel.”
Skift Senior Editor Andrew Sheivachman [[email protected]] curates the Skift Corporate Travel Innovation Report. Skift emails the newsletter every Thursday.
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Photo credit: Travelers at Chicago O'Hare International Airport. Anne Worner / Flickr