Skift Travel News Blog

The conventional wisdom back in 2015 was that travel agencies were a shrinking business. But that year, Spanish entrepreneur David Hernández thought he saw a whitespace for creating a fast-growing travel agency business, and he launched plans to create Pangea.

Fast forward to 2022, and his “travel store” invoiced close to 50 million euros in sales, Hernandez told the Spanish publication Time on Monday. In the first quarter of 2023, Pangea doubled its revenue year-over-year. This year, it expects to generate close to $75 million (€70 million).

What factors are enabling Pangea to grow quickly, having now served more than 20,000 travelers in only a few years?

In 2019, Hernandez raised an approximately $11 million (€9 million) round of venture funding, led by led by Axon Partners. The funding helped the company survive the pandemic and open four stores: in Madrid, at 1,500 square meters; in Barcelona, at 1,700 square meters and with a restaurant; in Bilbao, with three floors; and in Valencia, in the heart of the city.

The physical stores have attracted a new generation of travelers, just as some online-first direct-to-consumer brands like eyewear maker Warby Parker have opened physical stores as a marketing technique. Pangea’s Madrid store last year had a turnover of about $35 million (€30 million). Roughly a fifth of its customers were walk-ins.

“People fill out an online questionnaire, and based on their interests and characteristics, we find the best advisor for them,” Hernández said. “We have expert professional advisors in diving, volcanoes, safaris… anything you can imagine.”

Hernández doesn’t neglect technology. But he sees it as supplemental rather than the full offering — mainly as a way to make back-end and routine processes more efficient. His services are within a rounding error of the cost of fully booking trips online but save customers time, Hernández claimed.

“We have been developing a global technological tool for a year that aims to help further digitize the sector,” Hernández said, who aims to launch the tool at the travel trade fair Fitur early next year.

“Who thinks Booking.com, to name one, has no margins?” Hernández said. “That you always find the cheapest on the internet is not always true. For a difference of five or ten euros, it is not worth giving up the after-sales service, the security, the customization that we offer… We [as travelers] don’t have enough time to spend more than 50 hours preparing a far away and complex trip, like Costa Rica, Japan, Tanzania, the USA, or the Maldives. .. In an agency, they solve it for you in 30 minutes with all the guarantees and professional advice.”

—David Hernández, CEO of Pangea

Global Hotel Alliance gained from Spain’s tourism recovery in the fourth quarter of last year, following the addition of NH Hotels into the fold.

The country has now become the alliance’s second top earner, as it contributed $31 million in revenue in the last three months of 2022, the company said on Monday.

The United Arab Emirates, its traditional stronghold and where the alliance is headquartered, contributed $32 million.

Spain is catching up, as Singapore and Bangkok were the alliance’s second and third best-sellers, after the United Arab Emirates, during the first nine months of 2022.

Spain’s international visitors increased by 40 million last year, up from 31 million in 2021.

“The strength of recovery reflects the impact of the new GHA Discovery loyalty program, NH joining the alliance and bullish travel sentiment,” the company said.

NH Hotels also opened its first hotel, NH Collection Dubai The Palm, earlier this month, while the NH Collection La Suite Hotel Dubai will launch in 2024.

Room revenue generated by the 23 million global members of the GHA Discovery loyalty program exceeded 2019 levels from mid-November onwards. Room nights sold surpassed pre-pandemic levels by the end of its fourth quarter.

Business travel still lags however. The percentage of revenue attributed to international stays stabilized at 70 percent, the same amount as 2019, and the alliance said demand patterns were “returning to the old normal though leisure travel now dominates.”

The top feeder markets in the fourth quarter were the U.S. delivering $43 million in room revenue followed by the UK ($28 million), Spain ($26 million), Germany ($24 million) and Australia ($19 million).

China, which used to lead in outbound traffic, came in sixth place. The alliance, which counts 40 independent hotels brands as members, said China could “bounce back to number one in 2023.”

Total revenue for 2022 was $1.4 billion, up 60 percent on 2021.

Spain’s Iberia has been hit by a computer glitch, affecting its booking and boarding system.

“Due to a connectivity issue with our systems, today’s flights are experiencing delays,” it said on social media on Saturday. “We apologize to our customers and thank you for your understanding. Everyone at Iberia is working to solve it as soon as possible.”

The weekend disruption hit dozens of services across Spain and Europe, according to reports.

The software malfunction at Iberia, which is part of International Consolidated Airlines Group, is the latest in a series of computer blunders to strike the aviation industry.

The U.S. experienced a widespread shutdown of flights earlier this month, due to problems with the Federal Aviation Administration’s systems. It was forced to restore its Notice to Air Missions (NOTAM) system, which alerts pilots of potential hazards.

Southwest Airlines has taken a considerable financial hit owing to issues assigning crew to flights during the Christmas vacation caused by outdated optimization technology. The airlines has pledged to spend $1 billion on technology upgrades.

Old technology is increasingly contributing to mass flight cancellations, as travel returns. In Spain, passenger numbers are also rapidly returning to pre-pandemic levels. Passenger numbers through Spanish airport operator Aena’s 46 airports in December were at 98 percent of three years earlier.

Iberia reported that it had fixed the problem on Sunday. “Our systems have regained connectivity. Online billing and check-in are back to normal. We apologize to all customers for the inconvenience caused and appreciate your understanding,” it said.

Spain’s rail operator Renfe has begun testing two new cross-border high-speed rail routes to France that could begin carrying passengers by summer.

Renfe tested through AVE train service from Madrid Atocha to Marseille on Tuesday, and from Barcelona Sants to Lyon on Monday. Once driver training and familiarization is complete, the operator aims to begin initial revenue service of three weekly trains on each route by summer. Renfe plans to increase the number of trains on both routes to twice daily — or 28 high-speed trains a day between France and Spain — under its second phase service plan.

Renfe did not disclose the expected duration of both routes. However, the Madrid-Marseille service would make 13 intermediate stops, including in Barcelona; and the Barcelona-Lyon route would make seven stops, including in Perpignan.

Expanding cross-border rail links is a goal of European Union authorities as they aim to cut the bloc’s carbon emissions. While many individual countries have invested in their own high-speed rail networks, connections between the networks are limited. Only about 7 percent of cross-border trips in Europe are made by rail, according to the European Commission’s DG Move department.

The rail link between France and Spain first opened in 2013. Renfe and France’s SNCF previously cooperated on cross-border rail service between Barcelona and both Lyon and Marseille but terminated their partnership in December. The SNCF operated Barcelona-Lyon trains made the trip in roughly 5 hours. Renfe’s new through trains will replace some of the services previously operated under the partnership.

SNCF operates three daily high-speed TGV trains between Barcelona Sants and Paris Gare de Lyon.

Spain’s Tourism, Trade and Industry Minister Reyes Maroto will quit to run for mayor of Madrid, triggering a cabinet reshuffle, she said on Monday.

During her stint in government, Maroto took the lead on protecting the tourism sector during the pandemic and now heads negotiations over European Union-financed subsidies for industries such as car and microchip manufacturing.

Who will replace her in Prime Minister Pedro Sanchez’s cabinet is unclear.

“I have decided to step forward and run for mayor of the city of Madrid (…) I want to be the next mayor of Madrid and I am going to put my heart and soul into it,” Maroto told a tourism event on Monday.

TV station TVE and newspaper El Pais had reported she would be candidate earlier on Monday.

Municipal and regional elections in May will be a preview of the general elections to be held at the end of the year.

(Reporting by Inti Landauro, Additional reporting by Emma Pinedo; Editing by William Maclean)

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Travel technology company Amadeus said it was making a “significant investment” by setting up a wholly-owned business called Outpayce, which will focus on “delivering a smooth and connected travel payment experience across the traveler journey and accelerating the pace of fintech innovation in travel.”

It has also applied to the Bank of Spain for an eMoney licence, so Outpayce can eventually provide regulated services in the European Economic Area, with the intention to offer card issuing and Open Banking capabilities in travel.

The new division will build on the work of Amadeus’ existing payments business with the launch of an open API-based platform that helps third-party payments and fintech companies connect quickly and easily to travel companies.

It predicts 80 percent of companies plan to either match or go beyond 2019 levels of investment in fintech innovation in the next 12 months.

Hopper recently secured an extra $96 Million investment from Capital One to expand its partnership.

If you’d thought Silicon Valley’s TripActions was running out of steam as we head towards the year’s end, after its acquisitions and extensive fundraising, think again.

On Tuesday the corp travel startup announced its fourth acquisition in 18 months, buying Spain’s Atlanta Events & Corporate Travel Consultants.

The rationale, according to the company, is because of an increase in demand for conferences, on-sites and offsites.

Terms of the deal weren’t disclosed.

The purchase was made by TripActions’ premium-travel brand, Reed & Mackay, which it itself bought back in 2021. Atlanta was also a long-standing partner of Reed & Mackay.

Reed & Mackay’s meetings and events division’s employee base has grown fivefold, year-over-year, the company added.

This acquisition fills a gap in Europe, after it previously bought Comtravo in Germany and Resia in Sweden.

Atlanta has offices in Andalucia, Barcelona and Madrid, and all 70 employees will transfer over.

A regional consumer affairs agency in Spain fined eDreams Odigeo $23,300 (24,000 euros) for allegedly duping some consumers into buying the company’s much-publicized Prime subscription service.

The General Directorate of Consumer Affairs of the Balearic Islands, which include Mallorca and Ibiza among the better-known islands in the archipelago, levied the fine against eDreams Odigeo based on consumer complaints, finding that the Spain-based online travel company enticed travelers to book discounted flights, for example, but didn’t show prominently enough online that they would also be charged a roughly 55 euro ($53) annual fee for activation of the company’s subscription service, according to multiple published reports.

Edreams Odigeo announced in August that Prime attracted 3.5 million subscribers, after notching its largest ever quarterly growth in April, May and June, namely 560,000 paying members.  

The amount of the fine, $23,000-plus is a tiny for eDreams Odigeo from a financial perspective — the company claims to be the #2 flight online travel agency in the world behind Trip.com Group in China — is inconsequential. But the hit to eDreams Odigeo’s brand reputation, which had some trying times several years ago, could be more significant.

The company’a brands include eDreams, Opodo, and GoVoyages, among others.

An eDreams Odigeo spokesperson commented on the regulatory action.

“The resolution proposal by the Balearic consumer authority is not final and we respectfully disagree with it,” the eDreams Odigeo spokesperson said. “Our subscription programme, Prime, is exclusively offered to consumers as an optional service. Users must expressly opt-in to enroll on the programme after confirming they have read the terms and conditions. All the details of the subscription are displayed clearly and upfront, ensuring that no customer joins the programme unknowingly. 

“For further transparency, we offer a free trial period to allow consumers to enjoy the benefits of the service at no cost for 30 days. Furthermore, all customers who decide to join the free trial receive an email confirmation that clearly informs them of their subscription and how to easily cancel it online at any time before any charge is made, should they wish to.”

Janis Dzenis, a spokesperson for WayAway, a recently launched travel price comparison service that operates a subscription plan in the U.S., reacted to the news, arguing that such services need to be up-front with travelers.

“One hundred percent transparency about what the consumer is signing up for is a must for us,” Dzenis said. “Subscriptions are a long-term business play and unsatisfied customers could jeopardise your brand. By all means show people a ‘if you were a subscriber you’d get xx percent off this flight’ option, but it has to be completely clear. No surprises.”

The consumer affairs unit of the Balearic Islands, which is an autonomous province of Spain, likewise proposed a euro 24,000 fine against Spanish low-cost-carrier Volotea on similar lack of transparency grounds in inducing sign-ups for its own subscription plan.

“In the case of Volotea, the Consumer Affairs Directorate of Baleares points out that, when simulating buying a ticket for the Menorca-Asturias route, a discount of just over five euros was offered, but at the same time a subscription to the Megavolotea Plan was activated, with a cost of almost 50 euros per year. In the case of eDreams, different discounts entailed the activation of the Prime service, with a cost of 55 euros,” Facua reported.

The consumer affairs agency considers the case against the airline as being in its preliminary stages, and the proceeding against eDreams Odigeo resolved.

The value of the euro is plummeting and that means Americans vacationing in Europe will see their dollars going further, CNN reported.

The euro’s falling means the dollar and euro are almost at parity, and “the UK pound is also weak: It’s exchanging at $1.20,” the report said.

That means more expensive vacations for Europeans and British.

Even if the dollar is strong, though, compared with the euro and pound, hotel prices across Europe in May were soaring in some countries compared to May 2019 before the pandemic.

Average daily rates in May 2022 were up in Italy (23 percent), Ireland (21 percent), and Spain (17 percent) compared with the same period in 2019, according to STR Global.

Spanish railroad operator Renfe will open its newest high-speed line between Madrid and Burgos on July 22.

The new line will save travelers roughly 45 minutes with AVE trains taking just an hour and 33 minutes for trips between Madrid and Burgos, which is 134 miles north of the Spanish capital. In addition, it will reduce travel times between Madrid and the coastal cities of Bilbao and San Sebastián by up to 38 minutes. Renfe will offer up to 32 trains a day between Madrid and Burgos.

Renfe is offering 100,000 one-way tickets starting at €18 ($18.85) for travel on the new line.

The opening comes as European countries are increasingly pushing rail travel as a key way to reduce carbon emissions. Germany is offering a so-called “9 Euro ticket,” or less than $10, regional rail monthly passes this summer in an effort to boost ridership, and the UK opened the long-planned Elizabeth Line across London in June. Even airlines, which have long competed with trains, are expanding their partnerships with rail operators and offering more joint air-rail itineraries to travelers. Renfe unveiled a new partnership with Iberia in March.