Bold Predictions for the Travel Industry in 2019

Everyone likes a new year’s forecast, but many experts play it safe by merely highlighting well-known trends. It seemed like every year after 2007 was called the “year of mobile,” for instance.

Forecasters should be a bit more imaginative. After all, surprises happen. No one predicted that in 2018 lodging startup Oyo would raise a $1 billion funding round, Wynn Resorts would kick out its CEO Steve Wynn, and jet fuel prices would spike and then crash over a mere six months.

In that spirit, we came up with some stretch predictions for 2019. We think they’re just plausible enough that they can’t be dismissed entirely out of hand. Of course, we’re not betting our own money on any of them happening. (To learn our serious forecasts, Skift Research subscribers can read “What Does 2019 Hold For Travel as Recession Anxieties Rise.“) But we think that expecting the unexpected will be the key to a prosperous 2019.

The World Hits “Peak Cruise Buffet”

Cruise ship dining has made strides since the early days of assigned seats and limited meal times, no question. However, a newcomer to the industry stands to make a big splash before it says its first bon voyage.

Virgin Voyages, which enters the stage with its first ship in 2020, announced earlier this year that it would depart from the norm where restaurants are concerned. The startup cruise line is doing away with the all-you-can-eat buffet, an option long identified with cruising. Instead, the line will go with the far trendier food hall approach. Virgin also said it will keep its restaurants open late; abandon the idea of a main dining room; and include all dining venues in the price of the cruise fare rather than charge extra for some, as most cruise lines do.

It’s still early — no one knows how these ideas will play out just yet — but reaction so far suggests that other cruise lines might be wise to consider how they’re about to be disrupted (and how to get ahead of that upheaval). So 2019 might not be the year cruise lines toss the buffet tradition overboard en masse, but we expect to see more outside-the-box thinking about eating at sea as consumer habits evolve. —Hannah Sampson

Marriott CEO Arne Sorenson Runs for Public Office

Marriott’s monumental data breach and the nationwide labor strikes that took place at many Marriott hotels this fall won’t help, but we don’t think it’s completely out of the realm of possibility that Marriott CEO (and running enthusiast) Arne Sorenson might eventually consider a run for office, that is.

A registered Democrat, Sorenson was rumored to have had a seat in the Clinton Administration had Hillary Clinton been elected U.S. President in 2016, and he’s played an active role in the U.S. Travel Association for some years. In 2017, he was inducted into the U.S. Travel Hall of Leaders. While his politics lean left, he’s also somewhat moderate, having donated to former Marriott board member and Republican Mitt Romney’s 2012 Presidential election campaign.

At the Skift Global Forum in New York this September, hotelier Ian Schrager suggested Sorenson would make a fine political leader and gave him a glowing endorsement. The following day, when Sorenson was being interviewed on stage, he avoided giving an answer about the prospect of him running for public office — just as a politician would. —Deanna Ting

Lie-Flat Seats Come to Premium Economy

In 2019, some airline will create a lie-flat premium economy seat.

I’m kidding, of course. Airlines like premium economy precisely because the seats, while more comfortable than coach, don’t take up that much room. They can sell the product at roughly 1.7 times the base fare, even though each seat doesn’t take up 1.7 times the space of an economy class chair. As Airline Weekly’s Seth Kaplan told Bloomberg, “Anytime you can get paid double for something that doesn’t cost you double to produce, that’s a pretty good place to be.”

But airlines can be fiercely competitive on product, and they often try to out-do each other with successive seat generations. In the future, as carriers try to win share from each other, they’ll probably make the seats wider and more comfortable. Eventually, one airline might turn them into beds. Don’t laugh: Twenty years ago, most business class seats looked like today’s premium economy. However, British Airways introduced flat-beds in 1999, and now almost every airline has them.—Brian Sumers

TripAdvisor Drops Its Social Effort

In the second half of 2019, TripAdvisor will abandon its new Travel Feed, currently stitched into its homepage. TripAdvisor will find that this heavy dose of travel content, featuring stories from a bevy of publishers, including Skift, as well as from travel influencers, didn’t really move the needle for its business.

TripAdvisor can’t compete with Instagram — let alone Instagram’s parent, Facebook — and a variety of other sources in providing travel inspiration to consumers. The company will decide that it’s prudent to stick to what it does best: hotel and restaurant reviews, hotel search, dining reservations, and finding other things to do when on vacation. —Dennis Schaal

Brexit Will Be Canceled (or at Least Postponed)

At 11 pm on March 29, 2019, the UK will leave the European Union… or at least that’s the plan. Two-and-a-half years after the Brexit vote, politicians seem no closer to deciding what the UK should do. Just recently, beleaguered UK Prime Minister Theresa May narrowly survived a no-confidence motion. The deal agreed with the European Union still needs the backing of members of parliament. The clock is ticking, and if the UK can’t get its act together, it faces leaving the EU with no formal agreement – a turn of events almost everyone agrees will be catastrophic to the economy.

Opinion polls suggest the public now favors staying in the EU given the other current options, and more and more politicians are getting on board with the prospect of a second Brexit referendum. Like Bobby Ewing’s return in Dallas, maybe next year we’ll wake up and realize that Brexit was all just a bad dream? —Patrick Whyte

Oyo Rooms Buys RedDoorz

With $1 billion in its pocket, and a stated intent to expand into Southeast Asia, the idea of hospitality company Oyo snapping up RedDoorz, which has raised comparatively little in funding, isn’t too far off the mark. Both companies manage and sell budget hotel rooms under a promise of standardized quality.

RedDoorz has built itself up as the largest budget hotel chain in Southeast Asia since it launched in 2015. A RedDoorz acquisition would give Oyo in one fell swoop 680 properties, 17,000 rooms, presence in 40 cities in four South-east Asian countries, Singapore, Philippines, Vietnam, and Indonesia.

What’s more, most of those rooms and cities are in Indonesia, where Oyo is investing $100 million to conquer the budget hotel space, and where Grab, which has invested $100 million in Oyo, is also putting in a “significant” amount of funding to expand services. RedDoorz has 13,600 rooms in 30 cities in Indonesia. To make matters easier, RedDoorz’s branding even sports Oyo’s red color. Perhaps the topic will come up when Oyo CEO Ritesh Agarwal speaks at Skift Forum Asia in 2019. —Raini Hamdi

Microsoft Buys TripActions to Sell Business Travel

LinkedIn, which Microsoft acquired in 2016, has by all accounts been a profitable acquisition for the tech colossus. The social network for professionals generated about $5 billion in profitable revenue in 2018 thanks to its subscription-based services. In 2019, Microsoft may recognize its missed opportunity of selling travel to the LinkedIn audience of professionals, and it might buy TripActions, a business travel booking service, to power the service.

LinkedIn could sell travel to its audience and avoid the cost of competing on customer acquisition with the digital advertising juggernauts Booking Holdings and Expedia Group. Parent company Microsoft could also make use of Skype, its 2011 acquisition, and use chatbots to amplify the cost-effectiveness and customer service quality of its travel sales. —Sean O’Neill

Airbnb Reckons With the Real World and Buys TripAdvisor

For all its swagger, Airbnb faces a major problem as it prepares to go public in the next few years. Its success over the last decade helping home sharing go mainstream is undeniable, but a public Airbnb will be judged against the likes of Booking Holdings and Expedia Group, which offer a wider variety of travel products. It also doesn’t help that listings on Airbnb’s platform aren’t exclusive.

The languishing TripAdvisor, which recently launched a Pinterest/Facebook for travel on its homepage, remains an integral part of the travel and dining research process for many consumers — even if it hasn’t found major success as of late in bookings outside its online tours and activities business. TripAdvisor’s market capitalization of nearly $8 billion would make an acquisition challenging but not insurmountable for Airbnb, most recently valued at $31 billion.

A tie-up with the travel review giant would allow Airbnb to enter the wider air, hotel, and experience booking space while also acquiring hundreds of millions of potential customers for its home sharing business. Not to mention: a combined company would be the clear winner in the rapidly growing business for online tour and activity booking. —Andrew Sheivachman

Oracle Sells Its Hospitality Unit to Sabre

In June 2018, Oracle, which owns the world’s most widely-used hotel property management system, installed Greg Webb as the top boss of its hospitality unit. Webb was previously vice chairman of Sabre, a travel technology company with a large hospitality division of its own. Oracle’s property management system would provide Sabre with a full-spectrum tech stack for hoteliers.

Oracle might want to spin out its hospitality unit, which resulted from its $5.3 billion acquisition of Micros Systems. The deal didn’t go well. Oracle had never dealt with call-center-based customer service, and the company struggled to cope with requests from thousands of vendors. Oracle had hoped that moving hotels to cloud-based systems would help, but today a majority of Oracle’s hotel customers are still using premise-based servers and data centers.

To be sure, Oracle would be reluctant to lose the customer data that its hospitality unit feeds its lucrative BlueKai digital marketing service that helps non-travel and travel business market services online with personalized offers. Nevertheless, a sale might be a profitable win for both Oracle and Sabre overall. —Sean O’Neill

Expedia Buys the Rest of Trivago

Conventional wisdom says that Trivago, a price-comparison site that has suffered a revenue meltdown in the past year and a half, is damaged goods. It also says Expedia’s most likely acquisition targets would be for filling gaps in geographic coverage, such as Despegar in Latin America, Traveloka in Southeast Asia, or MakeMyTrip in India. However, Trivago might be of more pressing interest. Expedia Group needs a price-comparison engine in its arsenal the way rival Booking Holdings has Kayak and Ctrip has Skyscanner. These metasearch brands compete with Google, which might otherwise become too powerful.

Trivago’s recent troubles have beaten down its stock price to affordable levels, recently about $6 — off a July 2017 high of $23. Expedia already has a controlling stake, but by buying out the company, it would have free reign to restructure some parts of the now profitable business to help it return to growth more rapidly. Keep in mind that Expedia Group CEO Mark Okerstrom said in September at Skift Global Forum that he’s keeping mergers and acquisitions on the table.—Sean O’Neill

Amazon Bids for a Commercial Airline

The retail giant already runs a U.S. cargo carrier called Amazon Air, with about 36 aircraft. However, think of the possibilities of Amazon creating commercial air service. The company could keep costs down by distributing its fares to its existing customers. Tt could also offer extra services for members of its Prime subscription program, similar to how it does with grocery store chain Whole Foods.

Amazon’s easiest path to ownership would be to buy a small carrier that’s outside of the U.S., such as Canada’s Porter or Mexico’s Interjet. That way it could avoid ruffling the feathers of major U.S. airlines that often ship a lot of Amazon products in their cargo holds — until it has earned its wings. For a serious and unsensationalized analysis of Amazon, check out Skift Research’s E-Book: The Amazon Factor in Travel.

Skift editors Sean O’Neill, Dennis Schaal, Hannah Sampson, Deanna Ting, Brian Sumers, Patrick Whyte, Raini Hamdi, and Andrew Sheivachman contributed to this report.