Certares Founder and Senior Managing Director Greg O’Hara will be the next chair of the World Travel & Tourism Council. He starts later this month, the organization announced on Friday.
O’Hara has served as vice chair since 2021 and has been a member of the organization ‘s executive committee since 2019. He will be taking over for the current chairman, Arnold Donald, former Carnival Corporation President and CEO.
Certares is a private equity firm that owns Internova Travel Group and has active investments in G Adventures, Brightline, American Express Business Travel Group, LATAM Airlines and other companies in the travel industry.
O’Hara is the chairman of American Express Global Business Travel and serves on the board of directors of TripAdvisor. Prior to founding Certares, he served as the chief investment officer of JP Morgan Chases’s Special Investments Group.
O’Hara recently shared his views on the future of travel at Skift Global Forum in New York City.
Certares, a private equity firm that invests in travel, said on Wednesday it had closed its first real estate hospitality fund, with $284 million of equity commitments.
The fund is acquiring hospitality real estate assets in U.S. growth markets. It has already made investments in 10 hotels that together have more than 2,100 keys.
The New York-based investments specialist has invested heavily in travel companies — most prominently American Express Global Business Travel, car rental brand Hertz, the airline Azul, and Liberty Tripadvisor Holdings.
“A targeted real estate strategy is a natural extension of our experience in travel and hospitality,” said Greg O’Hara, founder and senior managing director at Certares.
The 10 hotels that Certares has made investments in include:
AC Hotel Santa Rosa Sonoma Wine Country
Sea Crest Beach Hotel in Cape Cod
Courtyard San Diego Downtown
EAST Miami in downtown Miami
Ashore Resort & Beach Club in Ocean City, Maryland
Doubletree Suites Doheny Beach in Dana Point, California
Embassy Suites Midtown Atlanta
Hilton San Antonio Hill Country
Le Meridien Tampa
The ARC Hotel in Washington, D.C.
The fund’s operators can take advantage of Certares’ leisure and business travel distribution assets, which it said “enhance demand and provide market intelligence for the hotels.”
The fund has an active pipeline of new investments, said Nolan Hecht, senior managing director and head of real estate at Certares, in a statement. Hecht previously oversaw hotel investment and asset management at Square Mile Capital Management.
Speaking during the “Reducing the Footprint of Travel & Tourism” panel, Mark Keam, deputy assistant secretary for travel and tourism Industry, International Trade Administration, was asked if the country would benefit from a cabinet level specific tourism/culture person?
“The U.S doesn’t have a tourism minister,” Keam replied. “I have the role as deputy assistant secretary for travel and tourism in the United States government, which is the functional equivalent of the ministry of tourism, but we don’t call it that, because in the U.S. we don’t have ministries.”
The assistant secretary was quizzed following an earlier remark by a panelist during the summit that the U.S. was “difficult to engage” with.
“But the reason I think we have it in somewhat better shape is that we’re part of the U.S. Department of Commerce, which is a government and private sector-facing agency,” Keam continued. “But we’re also part of the International Trade Administration, which is about bringing international travelers into the U.S. to raise money.”
Earlier in the day, Greg O’Hara, founder and senior managing director at travel investor Certares, was probed by CNN’s Richard Quest on why the U.S. tourism industry, which was “so crucial,” punches at a relatively low weight when ministers sit around cabinet tables.
“They don’t even have a tourism minster. They don’t have a secretary of tourism in the United States. It’s difficult to find people to talk to,” O’Hara replied. “Other people have tourism ministries, but they’re not allocated capital.”
But speaking later, Keam said that travel and tourism was discussed at the highest level.
“Having different boxes within the government is less important than what the functionality is,” the assistant secretary said. “From my perspective, the fact we are talking about travel and tourism at the highest level in our government is important enough. Frankly, the travel and tourism industry is such a big part in the U.S., at 2.9 percent of our gross domestic product, that across the board we hire so many people. It doesn’t matter which box of the agencies you’re in.”
The U.S. does have Brand USA, a public-private partnership to promote international visitation, which was founded in 2010 when there was no such promotional body on a national level.
It’s a holiday weekend in the U.S. so what better time to break up the monotony of barbecues and beach, and burrow into a Securities and Exchange Commission filing about the pending SPAC debut Tuesday of American Express Global Business Travel.
Among the takeaways:
The merger of Apollo Strategic Growth Capital and Amex GBT will see Amex GBT’s existing investors, including American Express, Certares, and Expedia Group, among others, controlling 74 percent of the voting power. They’ll have the power to make all of the big decisions, including board of director composition.
Global Business Travel Group, as the company will be formally called, will be considered to be controlled by American Express Co., and will be regulated by the U.S. Federal Reserve. As Skift previously reported, Global Business Travel Group can continue doing business as American Express Global Business Travel because of an 11-year trademark pact.
Only 15 percent of the company’s stock is expected to be owned by public shareholders.
Egencia, which Amex GBT acquired from Expedia Group in November 2021, did $8.4 billion in transactions in pre-pandemic 2019. Expedia Group traditionally disclosed revenue for its corporate segment, but not total transaction value for Egencia. That $8.4 billion would have amounted to roughly 8 percent of Expedia Group’s gross bookings that year.
The Egencia business was therefore a significant volumes chunk of Expedia Group, which sold Egencia during a huge business travel downturn in a drive to simplify Expedia’s overall operation. At any rate, Expedia Group got a 13 percent stake in Amex GBT because of the deal.
Ovation Travel, which Amex GBT acquired in January 2021, was tiny compared with Egencia in total transaction value, $1.2 billion for Ovation versus $8.4 billion for Egencia.
Amex GBT CEO Paul Abbott had 2021 total compensation of $18.4 million compared with $5 million a year earlier.
Tuesday’s stock market coming out party for Amex GBT, trading under the stock symbol GBTG, should be an interesting one to watch in terms of investor confidence in the future of managed business travel.
G Adventures, the small group tour operator hasn’t yet used any of the large amount of money it received in early 2021 from travel-focused private equity firm Certares, CEO Bruce Poon Tip admitted in an interview with Phocuswire.
When Skift first broke the news about this investment in early Feb 2021, the company said at that time that there was no change in ownership or equity involved in the transaction, and that this investment was for growth capital, not working capital, and Certares did not take a minority stake in the G Adventures. Which meant that this money was allocated for M&A by G Adventures, and it looks like after all this time, finally the company may be ready with its first set of acquisitions.
From the interview: “We haven’t done much, I’ll admit. There’s a bit of pressure now, to be honest. It’s just over a year later. We were given a substantial amount of capital for acquisitions…There are going to be some announcements within the next month that we’re finalizing….We signed this deal within that first year of COVID thinking there were going to be great opportunities for acquisition on the other side of COVID. But like every other travel company, we were in survival mode taking care of our own business… We’ve looked at startups, we’ve looked at established brands within the group travel space. We looked at investments in minority and majority stakes. Our wheelhouse is definitely group travel…I’m looking to other niche travel markets that could use more of our infrastructure and distribution and also our lens for community tourism and social enterprise.”
Have you ever claimed your value added tax back for things you bought during a trip to Europe? Then you probably used a Global Blue Tax Free Shopping service. Global Blue, a payments specialist for 300,000 partner stores primarily in the European Union, is now on the rebound.
It has agreed to receive $225 million in investment, subject to shareholder approval, from CK Opportunities, an investment fund co-managed by Certares, a global travel, tourism and hospitality investment firm, and Knighthead, a credit investment management firm.
The news comes shortly after Global Blue reported its first notional profit since the pandemic began, as measured by positive adjusted earnings, before interest, taxes, depreciation, and amortization.
Certares was founded as a private equity firm in 2012 in New York and has gone on to invest heavily in travel companies — most prominently American Express Global Business Travel, Hertz Corp., airline group Latam, and Liberty Tripadvisor Holdings.
One of the broad themes of Certares’ recent travel investments is that luxury or premium travel will prove to have long-term resilience despite other headwinds that might buffet the travel sector. Global Blue processes payments and has made particularly inroads on facilitating purchases made by international travelers on luxury good purchases at airports. In a non-pandemic year, Global Blue manages 35 million transactions. (See Skift’s coverage of Certares, here.)
Recovery led by US travelers in Europe is especially strong. Spending by U.S. travelers of which Global Blue is managing the VAT refund was up 166 percent in April compared to pre-Covid levels.
Global Blue is a Silver Lake portfolio company that went public in 2020.