Skift Travel News Blog

The CEO of Southwest Airlines issued a statement to customers with new details about actions the company is taking following the debacle in the last week of December. 

The most notable new information that CEO Bob Jordan shared is that the company has created a board committee to review the company’s response during that time, and consultancy Oliver Wyman has been hired to assess the airline’s systems.

The actions are in response to several issues that led to nearly 16,000 cancellations, caused primarily by a lack of investment in back-end technology. Southwest said the incident could cost the company up to $825 million. 

In the short term, the company is working on updating the crew recovery system, enhancing the crew communications tools, and establishing supplemental operational staffing

As Southwest has said, the company plans to spend about $1 billion on tech upgrades. The recent disruption will accelerate those plans, Jordan stated. 

He also stated that, as of the end of last week, nearly all bags have been returned and nearly all refunds and reimbursements have been processed. 

“We fell short of your expectations and the high standards we have of ourselves, and for that we are deeply sorry. It is our steadfast commitment to make the necessary changes to address the issues we faced and to regain your trust and confidence,” Jordan said in the statement.

The company is holding its quarterly earnings call next week, during which executives will likely further discuss the issue.

The U.S. Department of Transportation has said it is investigating the issue, and a group of U.S. senators sent a letter Friday demanding that Jordan answer questions about the incident.

Travelport is planning to sell its Hotelzon division to corporate travel agency startup TripStax, which was officially launched earlier this year — by two former execs at Travelport.

Hotelzon claims to offer 1.5 million properties from multiple content sources that include Booking.com and Expedia, and says it has 370,000 users, including travel agencies, corporations and event management companies.

It was established in 1972, but has been a wholly-owned subsidiary of Travelport since 2014.

TripStax signed the agreement to acquire Hotelzon as of Dec. 1 2022. Terms of the deal were not disclosed, but TripStax said the agreement establishes a “long-term strategic relationship between TripStax and Travelport whereby Hotelzon will continue to generate hotel bookings on Travelport+.”

Travelport has been streamlining its technology since it announced Travelport+ in April last year.

Skift first revealed the development of TripStax as a spin-off from corporate travel agency ATPI in July 2021. TripStax’s investors include Intermediate Capital Group, which is one of ATPI Group’s owners. ATPI also made a significant investment, with ATPI CEO Ian Sinderson joining TripStax as a director.

Jack Ramsey, CEO of TripStax, was previously global sales director at Hotelzon.

The Unbundling Trend

TripStax said the acquisition will boost its technology offering of “connected proprietary business travel modules with a fully integrated hotel booking tool for agencies and corporates direct.”

The travel agency startup wants to stand out from the crowd by offering modules, such as analytics, content and traveler tracking, rather than a full service. Corporate travel agencies are under growing pressure to separate their bundled services as company travel managers look to cut costs and add flexibility.

Hotelzon will be integrated as an additional module.

It is the second acquisition made by TripStax, following its purchase of TapTrip earlier in the year. TapTrip also received investment from ATPI.

“Since its conception, TripStax has been on the look-out for acquisitions which add relevant and complementary tech to its already powerful stack of business travel management modules,” said Ramsay. “We are also excited to welcome the hugely experienced Hotelzon team to the TripStax business and plan to further invest in the team to strengthen existing customer and supplier relationships and realise the full potential of this joint opportunity.”

Yanolja said this week it expected that a post-pandemic rebound in international travel will continue to boost its twin businesses of online travel sales via a superapp and software sales to hotels and other travel companies. The South Korea-based startup has made progress on both ambitions since 2011, when it received a $1.7 billion investment from the Softbank Vision Fund in a transaction that valued Yanolja at the time at approximately US$9 billion.

The privately held travel company in South Korea reported this week some of its financial results for the third quarter, saying it had experienced “high growth rates in all business areas.”

Yanolja recorded consolidated sales of approximately $147 million (192.2 billion Korean won) in the quarter, a 112 percent jump from the same period a year.

Unlike many travel startups, the company is profitable. Yanolja reported an adjusted earnings before interest, taxes, depreciation, and amortization, of about $8.1 million (10.6 billion Korean won).

Roughly half of the company’s growth has been partly driven by its software business, which had a 32 percent year-over-year increase to $71 million in sales in the quarter. For more context on the travel software sales, see Skift’s story Decoding Yanolja Cloud and Its Hotel Software Strategy.

The mid-sized company said it has been staffing up for roles in product management, software engineering, and user experience design, and has cash on hand to make acquisitions.

Jongyoon Kim, CEO of Yanolja, will discuss the company’s overall strategy and business performance at Skift Global Forum East in Dubai on December 14. Kim joined Yanolja in 2015 as chief strategy officer and in 2021, was elevated to CEO. He has previously worked at McKinsey & Company, Google, and 3M. Many industry analysts wonder if Kim will be able to guide the ambitious tartup to a successful initial public offering someday, and if so, when.

Busbud, an online marketplace for bus and other ground transport tickets, is now offering more software services to operators in that industry following a company acquisition. 

Montreal-based Busbud has acquired Toronto-based Betterez, according to LP Maurice, CEO and co-founder of Busbud. 

The deal was made with a mix of cash and equity, Maurice said. As part of that deal, the group that made undisclosed investments into Betterez in 2017 and 2018 are now investors in Busbud. 

That means Amadeus Ventures is now a “key investor” in Busbud, along with JetBlue Ventures, Porter Airlines CEO Michael Deluce, and Donald Carty, former CEO and chairman of AMR Corporation. Angel Gallego, executive vice president of travel distribution for Amadeus, is joining the Busbud board as an observer. 

“As part of that transaction, they became shareholders into Busbud — pretty significant shareholders,” Maurice said. 

Further details about the deal price and terms were not disclosed.

The Busbud marketplace allows consumers to compare and buy tickets for intercity busses, trains, and other forms of ground transportation from nearly 4,000 companies in 16,000 cities across more than 80 countries.

Betterez is a reservations and ticketing management software platform, enabling mobile ticket sales and more for ground travel operators. 

Betterez is used by about 50 of the 4,000 bus companies that sell tickets through Busbud, Maurice said. 

“We could take what we think is a pretty good piece of software, a reservation system, and really introduce it to either folks that don’t have any — which is actually surprisingly often — and also people who have legacy systems but may not have all the range of functionality that Betterez offers,” Maurice said. “And they can become a lot more innovative and drive a lot more sales.” 

Busbud acquired Recorrido, a Chile-based intercity bus marketplace, earlier this year to support  expansion plans in Latin America. Busbud also raised $11 million earlier this year, bringing its total to $44 million raised. 

The company now employs more than 150 people worldwide and is hiring. 

Busbud has quadrupled net revenue year-over-year in 2022 and is now “significantly above” 2019 levels, Maurice said. 

He attributes much of that growth to increased demand for travel post-pandemic. And he is confident Busbud will continue doing well even as some consumers have less disposable income.  

“We’re actually seeing a lift in people taking the bus and not driving,” Maurice said. “Most of them are actually leaving their car at home because of gas prices.” 

Hilton reported its third-quarter earnings on Wednesday. During a call with investment bank analysts, executives were asked what role the company’s software for setting rates may play in the company’s performance.

“I’d say we have a long history of being really good at revenue management, and it is part of our special sauce,” said Kevin Jacobs, chief financial officer.

The hotel giant’s CFO didn’t name a travel technology vendor but did refer to “a vendor we work with” while praising the software. Skift knows that for some years Hilton has relied on a vendor IDeaS to help build its revenue management system.

“We have a vendor that we work with. We co-created the algorithm with them. They’ve been an amazing partner…. We’ve created the concept of the consolidated center. We drive more of our owners that sign up to be in these consolidated centers where we help them. We don’t set pricing for the vast majority of our system, right, because 75 percent of it’s franchise, and it’s ultimately up to the franchisees to set the pricing. But we can advise them on how we do it, and we’re really good at it, and it’s part of our special sauce.

“In the old days, [you would build a new system and then you let it run for a long time. [Today’s] algorithms are being tweaked constantly to add incremental data fields that used to be in revenue management in our world. The world is awash in data that are contributing to the decision-making in these algorithms and just make it smarter.”

“During COVID and the aftermath of COVID, one of the big things has not been less about [pricing] floors and more about [pricing] ceilings. And so I think we’ve been very thoughtful about that as well. So yes, it’s part of our — one of the many things that we think we — our commercial teams are second to none in the industry, not just in revenue management. But in every other regard, this is one area that we think we do a really good job.”

—Kevin Jacobs, chief financial officer of Hilton.

The executives cautioned that no one thing the company does uniquely drives its premiums. Even so, it is rare for a travel sector chief executive to talk about the importance of the technology under the hoods of their commercial engines. So this comment stood out.

CORRECTION: This post originally misattributed the executive speaking.

Former Kayak Europe leader and now travel investor Jan Valentin has joined Seatfrog‘s board of directors, as the rail startup looks to move on from the pandemic by tapping into the trend for more sustainable travel.

The app, which lets train travelers upgrade their ticket at a reduced rate on the original cost by bidding, was named a Skift Top Travel Startup to Watch in 2019. Then the pandemic hit, and it lost 97 percent of its revenue.

Now the company wants to put coronavirus behind it with the appointment of Valentin, who used to be Kayak’s managing director and senior vice president in Europe. Valentin also runs ennea capital partners, which in 2020 merged with Howzat Partners to create a new $100 million fund to invest in travel startups and other digital businesses.

Howzat also invested in Seatfrog’s $1.2 million seed round, but Skift understands no extra investment accompanied Valentin’s appointment to the board.

Valentin is also a backer of Comtravo, the German corporate travel agency that was recently bought by TripActions.

Seatfrog said in a statement Valentin joins at a perfect time to support the company’s mission to reimagine the rail experience in a category that has been “trundling along without meaningful innovation for decades.”

“Governments are spending $400 billion plus in Europe to drive modal shift to more sustainable train travel, but it remains a massively under-digitized category, and the customer experience is a mess,” he said.

Seatfrog said it had recorded 1,400 percent growth so far this year, and is expanding internationally.

“We’ve delighted millions of passengers, and driven large revenue uplifts for rail companies well beyond the capabilities of the category’s legacy systems,” added Iain Griffin, CEO and co-founder of Seatfrog.

SiteMinder, a hotel commerce services company, said on Tuesday it had acquired GuestJoy, a provider of tools to help hotels communicate digitally with travelers. The Sydney-based SiteMinder also reported its latest financial performance, showing that its revenue is recovering though it continues to suffer net losses.

The companies didn’t disclose the transaction details.

“GuestJoy’s capability to automate and personalize guest communications will allow SiteMinder to offer a fully integrated user experience for our hoteliers,” said SiteMinder CEO Sankar Narayan.

GuestJoy offers a mobile app that lets hoteliers use chatbots to streamline some communications with guests before, during, and after stays.

SiteMinder went public last November in Australia. As of Tuesday, it had a market capitalization of about $703 million ($1 billion Australian). Its flagship service is channel management, but the company also offers products and services for distribution, taking direct reservations, and business intelligence.

For the year ended June 30, SiteMinder suffered a net loss of about $76 million ($110 Australian) on revenue of $80 million ($116 million Australian). It now has 34,700 customers, which represents growth over the pre-pandemic period.

Reposite, a maker of software for travel agents and advisors, has raised $7.5 million.

The company wants to establish itself as “the definitive group travel tool that fuels discovery and simplifies coordination for travel planners.”

The New York-headquartered startup was founded to address the needs of the group travel market, and in particular it wants to simplify it by leveraging data to consolidate planning.

Its supplier marketplace aids planners in finding new suppliers and receive proposals for their active trips. As well as activity providers it connects to restaurants, hotels, venues and transportation, and can notify them of trips happening in their area, so they can proactively connect with planners to win new business.

Current customers include Virgin Holidays, TUI, Bloomingdales, Major League Baseball and Brazilian steakhouse chain Fogo de Chao.

“We believe that group travel planning is ready for a data-driven refresh,” said Reposite co-founder Alexa Berube.

The round was co-led by returning investors Liberty City Ventures and Greycroft, with participation from MATH Ventures and BDMI. In 2020 it raised $2.5 million in funding.

Financial services firm Citi is launching Citi Travel later this year. The travel booking platform will be powered by Booking.com and its Rocket Travel subsidiary.

The portal is set to replace its existing City Thank You Travel Center website, and will offer hotel, air, and car hire options.

“Leveraging the scale and range of Booking.com, the new Citi Travel provides an unmatched breadth of hotel reservation options,” the companies said in a joint statement. “With more than 1.4 million hotels available worldwide — ranging from boutiques to beloved chains — there is the right option for every budget, vacation type and preference.”

Banks are continuing to develop travel products to gain more loyalty from their customers, giving them more options to spend their points. Capital One has recently invested in Hopper as well as private jet startup Aero.

Earlier this year, JP Morgan bought luxury travel agency Frosch, while in Nov. 2021, U.S. Bancorp acquired Will Smith-Backed TravelBank for $200 million.

Flyr Labs, which sells software to airlines to help them set their fares in revenue-boosting ways, has bought Newshore, a Barcelona-based software business that helps airlines with selling.

The companies didn’t share the deal terms or price. They said the acquisition would help Flyr’s clients in a few ways, such as by helping carriers more accurately predict buying patterns and respond to disruptions.

“Newshore’s disruption management solution automatically manages and communicates remediations to customers – streamlining many previously inefficient manual processes,” said a spokesperson. The software tools sync with the most commonly used airline technology systems.

Newshore’s Internet booking engine, its tools for improving upselling, and other services, will also appeal to airline customers, the companies said.

Flyr is a San Francisco-based startup backed by JetBlue Airways’ corporate venture arm JetBlue Technology Ventures. It has disclosed raising more than $150 million in funding from multiple investors to date.