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Skift Travel News Blog

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

Online Travel

Are Uncool Things Like Hotels and Making a Comeback at Airbnb’s Expense?

12 months ago

Just look at their market caps — Booking Holdings $92.05 billion and Airbnb a humbling $77.8 billion.

The Wall Street Journal reported Sunday that Booking’s share price has notched “single-digit gains” over the last six months, while “Airbnb’s shares have lost nearly a third of their value.”

Reporter Laura Forman attributes some of the discrepancy to the comeback and relative affordability of urban hotels versus soaring rates for short-term rentals.

Not to mention, we’d point out, seeming out-of-control cleaning fees with little rationale for the heft of the cost.

Airbnb’s average daily rates climbed 37 percent in the first quarter when measured against the first quarter of pre-pandemic 2019, according to the Wall Street Journal. Citing STR data, the story said average rates for urban hotels around the world in April haven’t yet inched back to pre-Covid levels, while the average price of a room night for hotels as a whole has risen less than 15 percent in April compared to the same period three years ago.

Of course, as the story notes, Airbnb has the brand advantage over as Airbnb spent less than a quarter of its revenue on sales and marketing in the first quarter of 2022 while Booking shelled out more than half its revenue on sales, marketing and related expenses.

Still, there’s a reason that spends so much on performance marketing on Google even as Airbnb has reduced the percentage of revenue it spends on marketing on Google and elsewhere since 2020. The reason spends so much? It seemingly is working.

The Wall Street Journal cited Sensor Tower data tallying’s app installs in April as being 13 percent higher than in January 2020 while Airbnb’s app downloads fell 12 percent in the same timeframe.

“Ironically, Booking has managed to reinvigorate interest in its namesake brand this year by promoting its tired image,” the Wall Street Journal said. “A Super Bowl commercial for featured The Wire star Idris Elba mocking the brand as having ‘never been accused of being sexy, flash or lit,’ unless, he adds, ‘we’re talking literal.'”

We’re unsure how much weight to give to Booking’s Super Bowl ad — which seemed to underwhelm — in its app download number uplift.

The signs of life in Booking’s stock price compared with six months ago has a lot to do with the comeback of cities, the reopening of Europe, where Amsterdam-based has most of its strength, and the relative affordability of hotels.

After all, while some people wrote off cities during the pandemic as being permanently scarred, Booking’s Glenn Fogel argued — as did Peter Kern of Expedia Group and Steve Kaufer of Tripadvisor — that urban hotels and cities would be back. It appears as though that’s starting to take shape.

Short-Term Rentals

Short Term Rental Companies Rush to Fill in Airbnb’s China Void

12 months ago

After Airbnb decided to exit the local Chinese market, local players are rushing in: Tujia, Meituan, Muniao, Fliggy and Xiaozhu are large local Chinese online travel and short-term rental players that are reaching out to the local Airbnb hosts to migrate them to their respective platforms, according to this report.

Tujia has set up a special business services team to work with the hosts and will soon launch “one-click launch” migration services, the story says. Similarly, Meituan has also set up a team to provide hosts with services such as quick audits of housing occupancy and quick responses within five minutes.

Business Travel

American Express Global Business Travel To Debut on Tuesday — Interesting Factoids

12 months ago

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.

Mergers and Acquisitions

G Adventures Hasn’t Yet Used Certares Investment Money; Closing In On Acquisitions Now

12 months ago

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.”


Venice Postpones Tourist Entry Fee Until 2023

12 months ago

At the very last minute before it was supposed to be implemented, Venice has postponed its trialling of entry fee for tourists until next year. Earlier I April it had announced that is was going to experiment with the fee to ease over tourism and crowding in its main areas.

As visitor numbers returned to pre-pandemic levels earlier in the spring, the city council earlier this year decided to move forward with the entry fee after postponing it due to covid, reports Euronews, but now it will officially launch on Jan. 16, 2023.

This plan to charge has been floating around since 2018.

Tags: venice


U.S. Airfares Up More Than a Third This Summer

1 year ago

We’ve said it once and we’ll say it again: air travel is pricey this summer, and getting pricier.

Cowen & Co. analyst Helane Becker estimated in a report Friday that U.S. airfares are up roughly 34 percent compared to to last year. That’s a big jump and likely to climb higher as airlines continue to par back schedules. Delta Air Lines said Thursday that it would “thin” schedules over Memorial Day weekend and into August, including cutting roughly 100 daily flights from July 1 to August 7. Alaska Airlines, American Airlines, JetBlue Airways, Southwest Airlines, Spirit Airlines, and United Airlines have already reactively cut schedules or updated guidance with fewer flights than they hoped to fly this summer.

“Demand is above 2019 levels, but capacity is still below 2019 levels,” Becker wrote. “We estimate it is ~90 percent of levels seen three years ago, and airlines continue to reduce capacity for this summer.”

She cited five reasons, including pilot staffing, aircraft, and air traffic control, for why airlines are reducing their schedules:

True to form, at midday on the Friday before Memorial Day — the unofficial start of summer in the U.S. — the Federal Aviation Administration limited the number of flights into, out of, and through Florida airspace due to “weather and staffing” at its Jacksonville air traffic control center.

Becker estimated that roughly 13 million people will fly in the U.S. this Memorial Day weekend. That would represent 90.5 percent of the number who flew over the same weekend in 2019.


Cheap Flights Are Back Between London and New York

1 year ago

Travelers can fly between London and New York for as little as $116 one-way, plus taxes and many, many fees, beginning in August with the launch of new flights by startup Norse Atlantic Airways. The budget carrier will connect London Gatwick with New York JFK, as well as Oslo, from August 12, Norse said Friday.

Sound familiar? Discounter Norwegian Air, which retrenched during the pandemic, flew the London-New York route from 2014-2020, according to Cirium schedules. Norse, for all intents and purposes, is a reboot of Norwegian Air’s defunct long-haul operations though Norse CEO Bjørn Tore Larsen has repeatedly rejected comparisons.

(Norse Atlantic Airways)

“The introduction of affordable Norse Atlantic Airways point-to point flights between Europe and the United States, will benefit both local tourism and businesses,” Larsen said. “Not only are we directly investing in the countries that we operate by employing local staff but also supporting job creation across the wider tourism and service industry.”

Norse begins flights between Oslo and the U.S., including Fort Lauderdale, Los Angeles, and New York, in June.


Marriott CEO Tony Capuano Sees “Extraordinary Pricing”

1 year ago

Marriott International CEO Anthony Capuano sat down with CNBC’s Andrew Ross Sorkin at the 2022 World Economic Forum to discuss what the company is seeing in travel demand.

  • Capuano says revenue-per-room is off the charts.
  • Margins were back to 2019 levels in April in the U.S., which represents about 70 percent of its business.
  • Optimism is deserved because international tourism will boost demand further once pandemic restrictions are loosened.
  • In the U.S., Marriott is back to the same level of open positions as in 2019.

Take a look and listen:

Online Travel

Travelers Continue Searching Online Booking Sites in Large Numbers

1 year ago

Website and mobile traffic analytics firm SimilarWeb said on Thursday that traveler booking patterns remain strong. The company collects a mix of raw data from brands such as Airbnb, Southwest Airlines, and Vrbo, and estimated data for its methodology.

Vacation rental activity remains strong with Airbnb April traffic up 239 percent from the April 2020 trough and Vrbo traffic up 323 percent.

SimilarWeb’s other data speaks for itself. Click the charts for a larger view.

Tags: news blog


Strong Travel Demand Lifts Southwest Airlines, JetBlue

1 year ago

Southwest Airlines and JetBlue Airways have both seen travel demand improve since their last second-quarter guidance update in April.

Southwest expects operating revenues to be 12-15 percent higher than in 2019, which is either the upper limit of its previous guidance or three-points higher, the Dallas-based carrier said Thursday. The airline “expects solid profits and operating margins, excluding special items, in second quarter 2022 and for the remainder of this year.”

And JetBlue expects revenues to come in at the high end of the up 11-16 percent year-over-three-years range it previously provided, the New York-based carrier said Thursday. And in June, unit revenues — a measure of how much it makes per seat mile flown — are “shaping up to be meaningfully better” than April and May with an increase of 20 percent compared to 2019.

“The demand environment continues to be strong,” JetBlue said.