Skift Travel News Blog

Short stories and posts about the daily news happenings around the travel industry.

Hotels

Generator Hostels’ Forecasts 50% Jump in Earnings as Budget Travelers Seek Deals

8 months ago

Generator Group, which owns or runs 21 hotels, gave a financial update on Monday that underscored the post-pandemic boom in travel.

London-based Generator Group forecasted that it’s on track to produce revenues of about $238 million (€225 million) this year — which would represent a 25% jump over the company’s revenue in the pre-pandemic year of 2019.

The privately held company anticipates this year it will produce earnings before interest, tax, depreciation, and amortization of about $80 million (€75 million). That would represent a 50% jump in earnings compared with 2019 — highlighting strong pricing power in so-called “compression,” or high-demand, markets.

PE-Backed Hostels

Private equity firm Queensgate Investments bought Generator for $480 million (€450 million) in 2017, and the group’s flagship brand is Generator, a set of premium economy hostels. Queensgate spent about $400 million in 2019 to acquire Freehand Hotels, which operates properties in New York, Chicago, Los Angeles, and Miami, and folded that into the group.

Generator said it has nearly 12,000 beds in ten countries. It told the Financial Times, “in the next year, it is planning to launch 10 more sites worldwide under an asset-light model where it does not own the long-term lease, including a new hostel in Bangkok.”

Queensgate is a part or whole owner of nine Generator-run properties. Generator also acts as a management company for other hostels.

For more context on Generator’s strategy, watch the interview with its CEO from last year’s Skift Global Forum East (below) or read Skift’s piece Generator’s Takeover of Paramount Hotel in Times Square Is Part of Broader Hostel Reboot.

Travel Technology

Snap Is Launching Dynamic Travel Ads Globally to Target Gen Z Vacationers

2 years ago

Snap claimed Etihad trimmed its “costs per flight search” four-fold using Snap’s new dynamic travel ads, which is now rolled out globally.

This ad format, according to Snap, is a travel category expansion that enables advertisers, including airlines, hotels, destinations and tour operators, to engage in advanced audience targeting based on a Snapchatter’s travel intent and backed by local relevance.”

“With travel demand seeing a continued strong recovery in Q1 2022, we were of course keen to capitalize by converting existing customers and, importantly, acquiring new ones,” Phil Dodwell, who heads marketing at Etihad, said in a statement. “However, the marketplace for air travel remains highly competitive so ensuring relevance is key.”

He said the airline will be continuing to use Snap’s dynamic travel ads in the second quarter, and particularly likes the format’s prospecting capabilities.

Snap’s prime users are Gen Zers and Millennials.

Tourism

Give Up Travel Because of Inflation? Gen Z in UK Is Undeterred

2 years ago

Despite inflation taking a chunk out of family spending power in the UK, only 8 percent of Gen Z respondents in a survey said they would give up vacation plans to cut costs.

But the Advertising Week Europe survey, conducted by Lucid, found a generational divide on the issue. Boomers — people age 68-77 — were the most likely (27 percent) to give up on their holiday dreams because of inflation, which saw the Consumer Prices Index jump 9 percent year over year in April.

“Fewer than half (46 percent) said they would cut back on travel and holidays, indicating cancelling trips already delayed by the pandemic is out of the question for many,” Advertising Week Europe said.

The survey also uncovered regional differences on the issue within the UK. For example, survey respondents in England’s southwest, which includes places like Bristol, were the least likely (9 percent) to quash travel plans because of inflation.

However, survey respondents in England’s east, including London, as well as people in Northern Ireland, were the most ready (23 percent) to cancel their vacation plans.

Meanwhile, plenty of U.S. residents plan to get into their cars or take flights over the upcoming Memorial Day weekend.

The Vacationer found that 60 percent of U.S. adults plan to travel during Memorial Day weekend, up from 27 percent a year ago.