Airbnb represents a wave of travel startups focused on digitizing supply for e-commerce. But next-wave travel startups, including names like freshly funded Mogul Recruiter and Tourlane, create new products and services by using big data and artificial intelligence.
Mogul Recruiter, a travel tech startup in Los Angeles, said last week it has raised $20 million, led by its largest seed investor, Silicon Valley-based L37, to help partnerships despite the coronavirus pandemic. Mogul analyzes records to identify star performers in the hospitality sector and helps hoteliers hire these stars and customers book stay at hotels with these workers.
The announcement may draw little attention amid the distractions of a week with Airbnb’s filing to go public. But the sector should take notice. While the sums involved are small and the odds against startups are high, Mogul’s real significance is a tiny-but-eye-catching sign of a feverish race underway by startups to use big data and next-generation analytics in travel.
The Airbnb initial public offering might represent the last big hurrah of a two-decade rise of travel companies that moved offline travel purchases online. The “big bang” of these online travel companies began with the birth of Expedia and its peers in the late 1990s.
The next wave of travel startups instead focuses on linking data with analytical tools to predict what customers will want next and how businesses can operate more efficiently. Startups like Mogul Recruiter are applying computational techniques pioneered at companies like Amazon, Ant Financial, and Barclay’s and using them to fine-tune travel businesses that are already selling online.
One next-wave starttup is Hopper, an online travel agency based in Montreal, makes more than half its revenue from add-on services like price insurance, rather than from selling flights and hotels themselves. Another is Kiwi.com, another online travel agency, has created new products with “virtual interlining” paired with trip disruption insurance. Omio, based in Berlin, and TicTacTrip, based in Paris, are piecing together door-to-door trips to include ground transportation like carpooling and intercity bus and train. Setoo is reinventing travel insurance to cover previously uncoverable contingencies, while Lumo anticipates flight disruptions.
Mogul Recruiter’s Talent-First Idea
“What we’re really doing is building an alternative engine for hospitality,” said Alexander Mirza, founder and CEO of parent company Stay Mogul. “Take Hilton as an example. I worked on the senior team there, and they often talked about their ‘engine.’ Hilton’s engine is their reward program, group sales, obviously their brands, and sometimes their purchasing savvy and their mobile app.”
“But what about people?” said Mirza. “Hilton and other hotel groups don’t do anything for franchise owners about talent acquisition, and they kind of leave them to their own devices. We aim to build an agent that makes talent the core of the hospitality engine.”
Mogul’s core offering is a cloud-based recruitment tool for hoteliers. It licenses data from an executive search firm Joseph David International to analyze the records on 1.5 million hospitality workers worldwide, with a half-million in the U.S.
Mogul then analyzes guest reviews of hotels, using data from TrustYou, to notice when guests call out by name excellent service by particular staff people. It uses that as a signal to highlight job candidates who deserve extra attention by hiring hospitality companies for corporate roles, general managers, supervisors, directors of rooms, food and beverage supervisors, and other sought-after positions.
Hoteliers use the tool to describe roles they’re looking to fill depending on a property’s needs, such as whether the company is working on a pre-opening task force, a rebranding, a renovation, or an ownership change.
Mogul has several other projects that aim to put its data to use. One example: It’s planning to hire talent identified by its tool to support a new Mogul brand of hotels. It has plans to take distressed properties in 10 U.S. cities and run them on behalf of property owners. It’s also testing a booking engine, powered partly by hotel distribution tech firm DerbySoft, that highlights properties that hire employees that are well-rated by Mogul’s software.
Tourlane’s Data Play for Multi-Day Tours
Tourlane, a Berlin-based travel startup, said on Wednesday it had raised $20 million from existing investors, extending its Series C funding round with Sequoia Capital, Spark Capital, DN Capital, and HV Capital.
Tourlane is also part of the next wave of travel startups with its emphasis on data analysis. While the first wave featured companies like Hipmunk that mix-and-matched data feeds to help consumers book travel online instead of offline, Tourlane is attempting to find smarter ways to sell travel in general.
Travelers have for years been able to research multi-day trips online. Tourlane aims to go further, using software to become more efficient at selling trips like African safaris and Australian road trips. It aims to streamline the process for consumers, agents, and suppliers.
Consumers can give Tourlane general ideas for the types of travel they like to do. The company proposes itineraries using a mix of data and infrastructure built from scratch to streamline the itinerary-building process done by human experts.
Peer companies include Evaneos, based in Paris, and The Trip Boutique, based in Zurich.
“The Agility Imperative”
What you might call “next-wave” travel startups have a heavy focus on data.
The trend was in plain sight at a travel startup presentation held online on Wednesday by Silicon Valley-based startup accelerator Plug and Play Tech Center.
“Accommodation is surprisingly still a very analog sector,” said Chris Hemmeter, co-founder and managing director of Thayer Ventures and a co-director of a special purpose acquisition company focused on acquiring travel businesses, during a presentation.
“The ‘agility imperative’ is something that we all have to take in mind,” Hemmeter said, whose firms haven’t invested in either Mogul or Tourlane but who happened to be commenting on the startup scene this week. “We like technologies that build different types of tools for developing products that increase [business] agility, that drive productivity, and that increase the performance for companies.”
“Covid is creating an opportunity for aggressive disruptors to really double down,” Hemmeter said. “The level of disruption and aggression by some of these players, some backed by the capital markets,… will make for a very interesting time 2021 and beyond, as these guys not only jockey for position but as they create opportunities that we haven’t even seen yet — either ancillary plays or even parallel plays within the business models that are emerging.”
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Photo credit: A suite at the Four Seasons hotel in Los Angeles. Five of the company's senior employees have been identified as stars by Mogul Recruiter's software. Mogul, a hospitality tech startup in Los Angeles, represents a wave of data-savvy startups. Four Seasons