One of our goals is to always surprise our readers. So we asked our editors to push the envelope on making predictions for the New Year. They did not disappoint, from Amazon buying Expedia to JetBlue going away. What we are really trying to do here is prepare our readers for more of the unexpected in 2020 — and we'll be there to cover it.
The changing of a decade is no time to play it safe. We asked the Skift team of editors and reporters to come up with predictions for 2020, some bold, some quite outrageous. We acknowledge many of these will never happen, but with others — hey, you never know.
To learn our serious forecasts, Skift Research subscribers can read Skift Global Travel Economy Outlook 2020. For a free excerpt, head here.
Amazon Buys Expedia, Trip.com Group Acquires TripAdvisor
OK, let’s get these perennial acquisition targets out of the way and off the books in 2020.
Amazon has been playing around in travel, in fits and starts, for years. Instead of merely making half-hearted gestures by offering domestic flights and bus tickets in India with Amazon Pay cash back as a come-on, why not just go all in by finally acquiring fellow Seattle public company Expedia? With Expedia in disarray and, as of this writing, still hunting for a new CEO and chief financial officer after forcing the duo out in early December, a big-pocketed Amazon could acquire Expedia Group and its full-service travel businesses on the cheap. Will there be vacation desks in Whole Foods sometime soon?
Expedia has had problems coping with inroads by Google Travel while Amazon is the best example of a company standing up to Google and thriving. There could be learnings all around.
Meanwhile, Ctrip, which rebranded as Trip.com Group, entered into a joint venture with TripAdvisor in 2019 as a means of jump-starting its outside-of-China businesses. TripAdvisor has been growing its tours, activities, and restaurant reservations businesses, and it has user-generated travel content to die for. But TripAdvisor’s hotel and vacation rental businesses have been a yawner. Ctrip could greatly expand its global profile and steal TripAdvisor at a bargain. You heard it here first. — Dennis Schaal, Executive Editor
JetBlue Airways Goes Away
Sorry, New Yorkers. Your hometown airline isn’t getting the job done in a world where megacarriers control the bulk of the market. JetBlue is the sixth-largest U.S. airline, and while it has built scale in New York, Boston, and south Florida, it’s an afterthought in most other markets. It’s still big, though — the airline had about 250 aircraft at the end of 2019 — and some of its competitors covet its pockets of strength. Analysts have wondered if United Airlines, which does not fly to New York JFK and is small in south Florida, might want to acquire JetBlue. Southwest could also be a fit, since it may need non-Boeing airplanes. Then there’s Alaska Airlines. The carrier is big on the West Coast but remains tiny in most JetBlue markets and could bulk up by acquiring JetBlue. It’s not clear regulators would approve any deals, but the chances likely would be higher under the Trump Administration than with any future Democratic president. — Brian Sumers, Senior Aviation Business Editor
Asian airlines will make non-airline acquisitions
Asian airlines will go beyond selling ancillaries such as seat preferences, cabin upgrades, travel insurance, and extra luggage to make more money. They won’t be satisfied with having partners power their hotels or tours and activities offerings, such as Agoda and Viator powering Singapore Airlines to enable the carrier to offer a semblance of connected travel to passengers. AirAsia has set off the notion that airlines can participate in Asia’s lucrative mobile-driven travel market. It has even launched a fast-food chain on the ground featuring its airline food, and a new music label. At press time, Qantas Airways is rumored to be buying all or some of Australia’s online travel company Luxury Escapes, which claims to have a database of 3.2 million travelers since its founding in October 2013.
Asian airlines have snapped up other airlines to gain landing slots (for example, AirAsia buying 49 percent of Zest Airways in 2013, its only acquisition in 18 years of existence) or to get a foothold into a new airline model, for example, Cathay Pacific buying Hong Kong Express in July this year to enter the no-frills market. Such airline-based strategic acquisitions will continue but from next year, we’ll see non-airline buys by airlines as well. — Raini Hamdi, Asia Editor
Airbnb will stay away from flights
Ever since Airbnb slipped the word “flights” into a presentation back in 2016, people have been speculating that a foray into air travel was just around the corner.
But the desires of Airbnb are likely to crash into the reality of selling package travel, meaning the development is incredibly unlikely, unless the company changes its business model.
Unlike the United States, Europe has a tightly regulated consumer market, and selling package travel requires companies to take on certain liabilities. Even with the launch of Airbnb Adventures, the company has stuck to the line that it’s up to the hosts to sort things out (I’m not sure this is even feasible in the long term).
Flights are something else altogether, and if the company were ever to try and imitate an end-to-end online travel agency like Expedia offering flights or car hire, it would have to abandon any pretence that it was just a platform. Booking.com gets around this by outsourcing and this is an option, but it doesn’t quite chime with Airbnb’s ethos.
This, however, is the tightrope Airbnb is currently walking. To expand and make more money and satisfy investors, it needs to take more of the consumer travel spend, but by doing this opens itself up to further scrutiny, regulation, and potentially court cases. Is this really something Airbnb wants to do just before going public? — Patrick Whyte, Europe Editor
Airbnb will indeed launch a flights feature; AirAsia will spread itself too thin
Airbnb will indeed launch some kind of flights feature in 2020, but it will do so in a signature Airbnb way. After all, Airbnb has signed on Fred Reid, a former CEO of Virgin America, as global head of transportation to lead the effort. Don’t look for Airbnb’s flights feature to parrot that of Expedia or Priceline, and holiday packages aren’t necessarily the roadmap in the short term. As the company is poised to make a public market debut in 2020, Airbnb is intent on showing investors that there are growth opportunities, and it does intend to become a more well-rounded travel solution.
Meanwhile, it may take a couple of years, but AirAsia, which is trying to become more online-travel-agency-like, will come to learn that a company can’t just branch out into and thrive in a variety of new businesses all at once. There isn’t enough talent and focus to be all things to all people. You have to love AirAsia’s ambition, but isn’t operating an airline hard enough? — Dennis Schaal
Salesforce will enter travel
Salesforce, which got its start in offering customer-relationship management tools, increasingly wants to become a major provider of cloud-based enterprise software to businesses, similar to SAS or Oracle. And just as SAS bought hotel revenue management startup IDeaS and Oracle bought hotel property management software company Micros, Salesforce will feel the itch to invest in travel. One potential area of interest might be on business travel. Salesforce’s flagship product helps salespeople track leads. A new startup, Salestrip, builds on that tool to help companies keep travel expenses by salespeople proportional to the potential value of a customer. That’s just one of several synergies. Buying a hotel customer-relationship management provider like Navis or Cendyn might be another. — Sean O’Neill, Travel Tech Editor
Travel will have its “fast fashion” moment
In the same way that hauls of cheap clothing from Forever 21 or H&M now look more irresponsible than aspirational, travel will start to move from quantity to quality for a certain type of consumer. This could manifest in many ways: people giving themselves an upper limit of trips they will take during the year, considering the alternative ways they can get there before booking, or bundling work and leisure trips together to cut down on flights. Travel has hitherto been largely exempt from conscious consumerism because actions like buying more organic vegetables or cycling to work have an additive on one’s quality of life — it’s aspirational. On the other hand, not going on vacation or forgoing business travel feels like a real sacrifice for affluent consumers. However, with the rise of flying shame, Extinction Rebellion, and calls for a tax on frequent flying in the UK, that will start to change. People will still want to travel and do so luxuriously, but they will think more deeply about the number and necessity of the trips they take. Broadcasting that awareness to their friends and followers will become more prevalent — and a sign of status in itself. — Rosie Spinks, Global Tourism Reporter
Corporate Travel’s Hot Startups Hit a Wall
Corporate travel has been sexy to investors and the rest of travel for a minute, thanks to sky-high valuations and the promise of creating a better experience for travelers. The reality is that the interfaces are just OK, and it’s hard to grow a business targeting primarily small- to medium-size businesses. With hundreds of millions in funding spent by the likes of TripActions and TravelPerk, and the specter of a business-travel slowdown on the horizon, it won’t be surprising to see these companies pull back their scaling efforts while smaller companies like Lola and Upside get completely gobbled up by traditional travel management companies. Product-market fit is difficult to find in corporate travel, particularly because the sector’s five major players already seem to have it, as depressing as that may be. — Andrew Sheivachman, Senior Enterprise Editor
Hotel companies — or at least brands — go away
The world is overdue for a prominent hotel merger. Not since 2016 have travelers seen a major consolidation of hospitality companies, when Marriott International gobbled up Starwood Hotels & Resorts to become the largest hotel company in the world by room numbers. Accor also shook things up with its purchase of the Fairmont, Raffles, and Swissôtel brands that same year. Accor then went on a shopping spree, buying a stake in 21c Museum Hotels, a boutique brand that has more of a presence in secondary U.S. cities such as Lexington, Kentucky. The French hotel giant last year purchased Mövenpick Hotels & Resorts, which has 90 properties worldwide. All the while, rumors were swirling that Marriott or InterContinental Hotels Group would try to buy Accor. What’s going on here? We’ve gone a long way from the time when travelers had very few options for where to sleep on a road trip. Now there are too many options. Marriott has 30 brands. Accor has 39. Some of the duplication has to be dealt with in 2020 with some brands folding and other hotel companies consolidating. Having a choice is a good thing, but the consumer needs to have some more pared-down offerings. — Nancy Trejos, Hospitality Editor
The U.S Airline Industry Will Fragment
Maybe consolidation went too far. With four major carriers at the top and one almost-major carrier, Alaska, right beneath that tier, the U.S. industry is ripe for fragmentation, especially at the bottom. New carriers will emerge to fill the vacuum left in smaller markets. David Neeleman’s new airline, now based in Salt Lake City, will be the first of the new entrants, and these carriers will take advantage of emerging aircraft technology, like the Airbus A220, to operate to cities left behind by consolidation. — Jay Shabat, Airline Weekly Senior Analyst
Diversity and inclusion in the U.S. travel industry will grind to a halt
It’s tempting to think that diversity and inclusion is always on an upward trajectory. The further we go into the 21st century, the more woke everyone gets. But in reality, progress comes in fits and starts, and sometimes not at all. Skift a year ago investigated why so many airlines had a dearth of women in their C-suites, and not much has changed since. There’s been a backlash against Me Too with male execs distancing themselves from their female colleagues in a misguided effort to ward off accusations of sexism. The black travel movement is still here, but its existence is old news to legacy brands, and there is still no formal Latino travel movement to speak of. Four months ago we wrote a deep dive revealing that the tour operator and travel advisor industries care little about supporting minority-owned businesses, and before that, we discussed how people of color have little access to venture capital for their travel startups. The social climate of the Trump administration doesn’t help, as sexism and racism become normalized anew. A change may come, but at this rate, don’t hold your breath. — Sarah Enelow-Snyder, News Editor
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Photo credit: Airbnb CEO on stage at Airbnb Open in 2016 to announce its new products. Skift / Airbnb