While Big Tech is laying off thousands, the travel tech companies interviewed for this column are hiring dozens of people. That's good for now, but we will see how hard the global economy gets hit next year. If too hard, some cutbacks may be inevitable.
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Big Tech companies are laying off tens of thousands of people.
Most recently Meta announced this week that it is cutting about 11,000 people. And Twitter, of course, has had its own reports. There have been other layoffs by Salesforce, Stripe, Lyft, Coinbase, Shopify and more.
So, is travel tech next?
Maybe. But there are no signs yet. Booking.com, for example, reported $6.1 billion in revenue last quarter — its best quarter ever. And the CEO said demand is not slowing down.
Even so, executives are keeping an eye out, though some have said they’re not too worried — at least not yet.
That’s also what Ian Brooks is seeing as co-founder of travel tech recruitment firm Gail Kenny. The firm has hired more than 1,000 mid- to senior-level tech employees over the last 15 years, focused mostly in the European market, he said.
“Yes, there’s a degree of caution,” Brooks said. “But at the same time, I think a lot of travel companies cut back so much during the pandemic … They’ve seen how difficult it has been to rehire people, so they’re not rushing into cutting back again. Not yet.”
The early months of the year are typically a busy time for bookings, so he expects companies will wait for that season before making big decisions.
Meanwhile, some travel tech execs believe their companies will be sustained by an increased need for industry modernization, and some see the Big Tech layoffs as an opportunity for their own businesses.
A Need For Travel Tech
Travel tech companies got a rise in business later in the pandemic as others in the industry needed to accelerate digital transformation. Much of that need has come from an extremely sparse hospitality workforce.
“Businesses have worked out they’ve got to be more efficient because staff are costing more,” Brooks said. “Wage inflation is 10, 15, 20 percent in some cases. You might have to employ less people to do the same amount of work because you’re going to have to pay them more.”
That need for digital transformation is why HotelKey, a Texas hotel property management system platform, has more than 100 open jobs that need to be filled in the next 12-18 months. The company hired 60 employees globally over the last 12 months, according to Aditya Thyagarajan, co-founder and president of HotelKey.
“HotelKey has always done well in a tough market. When there is a slow down, our clients get a chance to look at technology options to reduce spend and improve operational efficiency. We thrive in this environment,” Thyagarajan said in an email. “Our cost effective solutions eliminate technical debt and provide our clients opportunities to enhance workflows and processes to reduce cost and overhead.”
He said the company signed a “large global enterprise” during the pandemic.
And Lodgistics, a hotel operations software company based in North Carolina, has 20 employees and is planning to hire another 20.
“Our software, which is an operations and collaboration platform, solves what I think is the biggest problem in hospitality right now, which is the labor crisis,” said Jessica Kramer, CEO of Lodgistics. “We are a tool to help hoteliers operate and collaborate and, in essence, ensure retention of the people that they do bring in. We feel like being at a company that is uniquely focused on such an important problem means that we are hiring and we’ll be positioned for growth.”
The CEO of Busbud, an online bus ticket marketplace, believes that the pent-up demand in travel will keep his company going, even as some people have less disposable income.
“We’re actually seeing a lift in people taking the bus and not driving,” LP Maurice, CEO and co-founder of Busbud, told Skift this week. “Most of them are actually leaving their car at home because of gas prices.”
Busbud also now offers more tech services for the ground transport industry, which is largely behind the times regarding digital modernization, so he thinks there is an opportunity there to help that industry drive more sales.
A Bigger Talent Pool
It still takes an average of six months — up to a year in some cases — to hire a new employee at Digitrips, a French business-to-business travel tech group whose companies include online travel agency Misterfly.
So, that company sees an opportunity with the larger talent pool that comes from Big Tech layoffs, said Emilie Dumont, managing director of Digitrips.
“No, that does not concern us,” Dumont said. “To be very honest, we’d rather see that, as probably the tension on tech recruitments might be a little bit less high in the coming years. Maybe if there is less tension on tech profiles, that could help us to have a shorter recruitment period.”
Maurice of Busbud had a similar thought. His company has hired 20 people in the last six months and has another dozen positions open.
“I think at least for now, we’re seeing it as an opportunity, but we’re also being very mindful and prudent of not pressing on the gas so hard either, just looking at the signals in the market and adjusting our hiring accordingly to what we’re seeing in the market. Almost taking it one quarter at a time,” Maurice said.
While demand for talent outweighs supply, Brooks of the Gail Kenny recruitment firm warns travel tech companies that others are looking, too — and companies in finance-related tech can usually pay more.
“There’s a war for talent in travel to get good candidates, but there are people coming from industries outside of travel looking to poach that,” Brooks said.