In first IPO price range, Airbnb’s valuation recovers to pre-pandemic levels


This post is by Alex Wilhelm from Fundings & Exits – TechCrunch

This morning Airbnb released an S-1/A filing that details its initial IPO price range. The home-sharing unicorn intends to price its shares between $44 and $50 per share in its debut.

Per the company’s own accounting, it will have 596,399,007 or 601,399,007 shares outstanding, depending on whether its underwriters exercise their option. That gives the company a valuation range of $26.2 billion to $30.1 billion at the extremes.

The company’s simple share count does not include a host of other shares that have vested but not yet been exercised. Including those shares, the company’s fully diluted valuation stretches to $35 billion, by CNBC’s arithmetic.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


The top-end of Airbnb’s simple valuation places it near its Series F valuation set in 2017. Its fully-diluted valuation exceeds that $30.5 billion valuation and is far superior to the $18 billion, post-money valuation that it raised at during its troubled period early in the COVID-19 pandemic.

For those investors, Silver Lake and Sixth Street, the company’s initial IPO price range is a win. For the company’s preceding investors, to see the company appear ready to at least match its preceding private valuation is a win as well, given how much damage Airbnb’s business sustained early in the pandemic.

But how do those Airbnb valuation numbers match up against its revenues, and will public market investors value the company based on its current results, or expectations for a return-to-form once a vaccine comes to market? And if so, is Airbnb expensive or not?

Expectations, hopes and hype

Shares of Booking Holdings, which owns travel services like Kayak, Priceline, OpenTable and others, have almost doubled in value since its pandemic lows and is within spitting distance of its all-time highs. This despite its revenues falling 48% in its most recent quarter. There’s optimism in the market that travel companies are on the cusp of a return to form, buoyed — we presume — by good news regarding effective coronavirus vaccines.

My expectation is that Airbnb is enjoying a similar bump, as investors intend to buy its shares not to bask in awe of its Q4 2020 results, but instead to enjoy what happens in the back half of 2021 as vaccines roll out and the travel industry recovers.

But happens if we stack Airbnb’s revenues against its valuation today?

In first IPO price range, Airbnb’s valuation recovers to pre-pandemic levels


This post is by Alex Wilhelm from Fundings & Exits – TechCrunch

This morning Airbnb released an S-1/A filing that details its initial IPO price range. The home-sharing unicorn intends to price its shares between $44 and $50 in its debut.

Per the company’s own accounting, it will have 596,399,007 or 601,399,007 shares outstanding, depending on whether its underwriters exercise their option. That gives the company a valuation range of $26.2 billion to $30.1 billion at the extremes.

The company’s simple share count does not include a host of other shares that have vested but not yet been exercised. Including those shares, the company’s fully diluted valuation stretches to $35 billion, by CNBC’s arithmetic.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


The top end of Airbnb’s simple valuation places it near its Series F valuation set in 2017. Its fully diluted valuation exceeds that $30.5 billion valuation and is far superior to the $18 billion, post-money valuation that it raised at during its troubled period early in the COVID-19 pandemic.

For those investors, Silver Lake and Sixth Street, the company’s initial IPO price range is a win. For the company’s preceding investors, to see the company appear ready to at least match its preceding private valuation is a win as well, given how much damage Airbnb’s business sustained early in the pandemic.

But how do those Airbnb valuation numbers match up against its revenues, and will public market investors value the company based on its current results, or expectations for a return-to-form once a vaccine comes to market? And if so, is Airbnb expensive or not?

Expectations, hopes and hype

Shares of Booking Holdings, which owns travel services like Kayak, Priceline, OpenTable and others, have almost doubled in value since its pandemic lows and is within spitting distance of its all-time highs. This despite its revenues falling 48% in its most recent quarter. There’s optimism in the market that travel companies are on the cusp of a return to form, buoyed — we presume — by good news regarding effective coronavirus vaccines.

My expectation is that Airbnb is enjoying a similar bump, as investors intend to buy its shares not to bask in awe of its Q4 2020 results, but instead to enjoy what happens in the back half of 2021 as vaccines roll out and the travel industry recovers.

But what happens if we stack Airbnb’s revenues against its valuation today?

5 questions from Airbnb’s IPO filing


This post is by Alex Wilhelm from Fundings & Exits – TechCrunch

Airbnb filed to go public yesterday, offering the world a look into its financial performance over the past several years. The company’s S-1 detailed an expanding travel giant with billions in annual revenue that was severely disrupted by the COVID-19 pandemic.

But past our overview of Airbnb’s core financial results and our look into which investors will make the most from its public debut, there are still questions that need answering.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


We need to better understand how far Airbnb’s bookings fell during the end of Q1 and the start of Q2, when travel first collapsed. And, how far those numbers have come back since. We also want to understand what sort of booking activity is driving those gains — is Airbnb really benefiting from a surge of long-term, local stays?

Then, to close, how profitable was Airbnb when times were good, and what sort of cash stockpile does the company have to get back to its former scale?

These five questions should help us better understand how Airbnb managed to survive some tough months and still file to go public before 2020 ran out. Let’s get to work!

We’ll take each question individually, to make our homework today as simple as possible.

How far did Airbnb’s bookings fall during Q1 and Q2?

Let’s start by looking at Airbnb’s gross bookings on a quarterly basis. The company defines gross bookings as “net of cancellations and alterations,” so these numbers are not artificially inflated.

Here’s the chart:

Image Credits: Airbnb

Where does the decline begin? Q1, as we’ll see when we dig into monthly data, but the above chart does a good job painting just how bad things got for Airbnb in growth terms as Q1 closed and Q2 kicked off.

As you can see, Airbnb’s second quarter gross bookings were its lowest in recent history; Q2 2020 put up the smallest bookings result since at least the first quarter of 2017. For a company that had done $10 billion in gross bookings in a single quarter just over a year before, the declines were catastrophic.

But the results are actually worse than that chart shows; Airbnb actually saw gross bookings go negative for a few months.

How is that possible? Recall that the gross bookings figure discounts cancellations and alterations. So, if Airbnb had a big wave of cancellations, its gross bookings number could fall so sharply it goes negative, even if the company were still seeing some new bookings.

That’s what happened in March and April. Observe:

Image Credits: Airbnb

So how far did Airbnb’s gross bookings fall? They fell to -$900 million in March. More simply, Airbnb saw its expected rental volume fall by nearly $1 billion in a single month. And then in April it fell by another $600 million as more cancellations piled up.

That’s why Airbnb cut staff and took on expensive capital; its business had gone from accreting to bleeding in no time at all.

How far have Airbnb’s bookings come back since?

The VC and founder winners in Airbnb’s IPO


This post is by Danny Crichton from Fundings & Exits – TechCrunch

After a tumultuous year for the travel industry, Airbnb’s long-awaited IPO filing just dropped. One thing is clear: there is still plenty of juice left in the home-sharing platform, and a smattering of VCs and the company’s founders are positioned to receive some serious returns.

My colleague Alex Wilhelm has an overview article on Airbnb’s financial picture and overall metrics. It’s a mixed bag, but perhaps stronger than might otherwise be expected, given the global collapse of tourism due to the pandemic. Revenues are stabilizing, growth is up and bookings aren’t catastrophic.

So let’s get to the most fun question with these big startup IPO offerings, who made the money?

First and foremost, Airbnb’s founders — Brian Chesky, Nathan Blecharczyk and Joe Gebbia — managed to hold together a whopping 41.95% of the company based on data offere in its S-1 filing, with Chesky owning slightly more than his two co-founders.

Reposite streamlines the most tedious tasks for travel agents


This post is by Romain Dillet from Fundings & Exits – TechCrunch

Meet Reposite, a software-as-a-service startup that wants to help travel agents of all kinds deal with their daily tasks. While the travel agency industry is huge, most people who work in this industry still don’t have a good system in place to deal with information, orders and communication.

Reposite wants to be a one-stop shop for tour operators, event planners and more. The platform lets you centralize all information in one repository. It lets you upload client information and your supplier database so that you don’t have to juggle with Excel files and good old binders.

Compared to traditional CRM systems, such as Salesforce, Reposite is specifically tailored for the travel and events industry.

You can invite your suppliers to join Reposite and update their profile. This way, information always remains up-to-date. Travel agents looking for a specific place will have a higher chance of finding a specific supplier if there’s a lot of information on the profile.

For suppliers, maintaining a Reposite profile shouldn’t be too intensive as you only need to update a single profile. All your travel partners will get the most recent profile automatically.

After that, Reposite helps you stay on top of your projects. As a travel agent, chances are you spend most of your time interacting with clients and suppliers. You can save email templates, track your meetings and calls from the platform. There are also some task management features built in, which should help you keep an eye on your pipeline.

When you’re ready to go ahead and sign a contract, you can invoice your clients and pay your suppliers from Reposite. You can see if there are any pending payment.

The startup is still quite young and recently raised a seed round of $2.5 million. Liberty City Ventures is leading the round, with Greycroft, Pritzker and Raine also participating.

While there isn’t a ton of travel activity during the pandemic, the startup thinks its product can help the industry as a whole for a better recovery. It should certainly help some travel agents become more efficient, which could improve the bottom line.

Latin America Travel Search and Booking


This post is by Mauricio Prieto from Travel Tech Essentialist - Medium

Travel Search and Booking Dynamics in Argentina, Brazil and Mexico

This online survey was done on September 2020 with 18.000 respondents from Argentina, 13.000 from Brazil and 11.000 from Mexico. The responses below apply only to the subsegment of respondents who had purchased a flight or an accommodation (hotel or alternative accommodations) in the previous 12 months: 1134 in Argentina, 1425 in Brazil, 1231 in Mexico. The purpose of this survey was to understand their travel search and booking behaviors.

0. High level summary

Travel Search

  • Online Travel Agencies (OTAs) are the leading channel to start searching for flights and accommodations in Argentina, and for accommodations in Mexico.
  • Search engines are the leading channel to start searching for flights and accommodations in Brazil and for flights in Mexico.

Travel Booking

  • OTAs are the leading channel for booking accommodations in Argentina, Brazil and Mexico
  • Supplier direct (adding online + phone) is the leading channel for booking flights in Argentina, Brazil and Mexico.
  • There is a significant share of consumers who have no preference on the booking channel: 32% of flight bookers in Argentina, 22% of flight bookers in Brazil, 24% of accommodation bookers in Mexico.
  • There is also a significant share of consumers who are attributing their booking experience to the metasearch and search engine channels. There could be some of these travelers who are in fact booking in those channels, but there might also be some confusion on the booking channel. Consumers might be confused on what the booking channel is (or don’t care about it), but there it could point to an opportunity for the booking channel to do a better job at communicating and educating consumers on the value they bring.

Satisfaction levels with travel booking channels

Travel consumers were asked to rank their level of satisfaction (from 1 = very dissatisfied to 5 = very satisfied) with the booking experience on their preferred booking channel.

Search Engines got the best performance (5) results in two instances (Brazil flights and Brazil accommodations) and worst performance results (1+2) in two instances as well (Argentina flights and Argentina accommodations). Traditional travel agencies get the worst performance results in three instances (Mexico flights and accommodations, Brazil accommodations) and best performance results in one (Argentina accommodations).

The channels with the best and worse scores in booking satisfaction (1 = very dissatisfied, 5 = very satisfied)

Search / Book cross tabulation

  • Many more consumers that start searching travel on search engines end up booking directly with suppliers than with OTAs. Maybe this explains partly how vocal OTAs have been about Google’s growing threat.
  • Less than half of travelers in Argentina and Brazil (and 55% in Mexico) who initiate their flight search in an OTA end up booking there.
  • There is significant transfer (between 20% and 30%) from searching flights on OTAs to booking on airlines. Less transfer (around 10%-15%) with searching accommodations on OTAs and booking directly with suppliers. I think there is an opportunity for OTAs to apply metasearch components to monetize on these leads to suppliers.
  • Conversely, the highest “retention” rates (search and book in the same channel) are with flights + airlines and also with accommodations + OTAs. More than 75% of travelers who start their flight search with an airline in Argentina and Mexico (and 53% in Brazil), end up booking there. Around 75% of travelers who start searching accommodations in an OTA in Mexico and Brazil (and 64% in Argentina) end up booking in the OTA.

1. How do you start searching for your flights / accommodations?

In Argentina and Mexico, OTAs are the leading channel to start searching for accommodations, while Brazilians prefer to start their accommodations search in search engines.

For flights, search engines are the leading channel to initiate searches in Brazil and Mexico. Argentinians give a slight edge to OTAs over search engines.

A relatively small share of travelers in Argentina (11%), Brazil (9%) and Mexico (8%) start their accommodation searches directly with suppliers. For flights, more travelers start their searches direct with the airline, with up to 23% of Mexican travelers starting their flight search this way.

2. What is your preferred channel to book flights and accommodations?

33% of Argentinians choose OTAs as their preferred booking channel for accommodations, followed by suppliers (adding online and telephone) with 26%. For flights, the situation is reversed, with 26% choosing to book direct with suppliers, and 20% with OTAs. Worth noting that almost 1/3 of Argentinians don’t have a preference of flight booking channel.

In Brasil, 28% of travelers choose OTAs as their preferred booking channel for accommodations, closely followed by suppliers (online + telephone) with 26% and search engines with 23%. For flight booking, suppliers add up to 28%, slightly ahead of search engines with 27%. OTAs are further back with only 13%, not much more than the 10% of traditional travel agencies.

OTAs are the preferred flight booking channel for 36% of Mexicans, followed by supplier direct (25%) and search engines (18%). For accommodations, supplier direct is the preferred booking channel for for 35% of Mexican travelers, followed by OTAs (18%) and search engines (15%).

3. What is your satisfaction level with your preferred booking channel (1 = very unsatisfied, 5 = very satisfied)

Flight booking satisfaction

In Argentina, the highest levels of satisfaction in booking a flight are with old school channels: traditional travel agencies and directly calling the airline. OTAs and online direct follow closely, both adding up to 79% that ranked their experience as a 4 or 5 (1 being very unsatisfied and 5 very satisfied). Search engines rank the lowest in flight booking satisfaction with 15% being very dissatisfied. Unclear if consumers are attributing to the search engine a redirection to an airline or OTA once the flight has been selected in the search engine.

In Brazil however, search engines have the highest satisfaction levels in flight booking, with 56% of flight bookers giving it a 5, followed by traditional travel agencies (52% of travelers give them a 5). Combining 4 and 5, the metasearch channel shows the best satisfaction levels adding up to 87% of travelers. OTAs and online direct with airline have similar results, with 74% and 76% of travelers respectively giving them a 4 or a 5. There seems to be a big potential for improving the experience of calling an airline to book a flight, since 19% of travelers saying that they are very dissatisfied with their experience.

In Mexico, OTAs and airline direct show the highest satisfaction levels when combining 4 and 5. However, if we only look any 5 (very satisfied), the metasearch channel has the best results. Also here, it is not clear if travelers are booking direct with the metasearch or they are being redirected, and they are ranking their overall experience of finding the right flight through the metasearch and not clear where the booking was made.

Accommodation booking satisfaction

Similar to what we saw with flight bookings, traditional travel agencies have the highest satisfaction levels for booking accommodations in Argentina. Combining 4 and 5, OTAs show the best satisfaction levels (again, similar to flight bookings). Booking accommodations on search engines show the lowest satisfaction levels, with 20% saying they are very dissatisfied, and only 26% very satisfied. This is also consistent with the flight booking results.

In Brazil, search engines have the highest number of very satisfied bookers (54%), followed by online direct (52%). Combining 4 and 5, OTAs have the best results (82%), closely followed by online direct (81%).

In Mexico, OTAs have the highest number of very satisfied bookers (48%), followed by search engines (42%). OTAs, supplier direct and search engines have similar levels of clients with a 4 or 5 satisfaction level.

4. Cross tabulation — Search and Booking

(after searching on each channel, where do consumers end up booking?)

Argentina

23% of travelers who start their flight search on search engines end up booking directly with the airline, while 17% end up booking on an OTA. For accommodations, 25% of travelers who start their accommodations search on search engines end up booking directly with the supplier, while 18% book through an OTA.

Less than half of travelers who initiate their flight search in an OTA end up booking there. 28% finalize their booking with the airline. Different story in accommodations. 73% of those who initiate the search in an OTA end up booking in the OTA, and only 15% with the supplier.

75% of travelers who start their flight search with the airline, end up booking there. Only 8% of these travelers end up booking with an OTA. With accommodations, 57% of travelers who start their accommodations search directly with the supplier, end up booking with the supplier. 15% finalize their booking with an OTA and 11% with a a traditional travel agency.

Brazil

In Brazil, 41% of travelers who initiate their flight search on a search engine end up booking there (or attributing it to that channel), while 22% end up booking with the airline and only 9% with an OTA. For accommodations, 48% of travelers who initiate their flight search on a search engine end up booking there, while 19% end up booking with an OTA and 15% with the supplier.

For travelers who initiate their search in an OTA, only 33% ends up booking their flights there, and 20% books with the airline and 12% with a traditional travel agency. For accommodations, 64% of those initiating their search in an OTA ends up booking with an OTA, 10% with the supplier and 5% with a traditional travel agency.

53% of travelers starting their flight search in an airline end up booking with the airline, while 8% go to an OTA and 5% to a traditional travel agency. Interesting that 20% of those who start a search with an airline end up booking through a search engine (or attributing their booking to that channel)

Of those that start their search in a traditional travel agency, only 22% and 37% end up booking their accommodation and flights there respectively. The supplier is the most benefited from this segment, as 29% and 24% of users that start their searches in a traditional travel agency end up booking their accommodations and flights respectively directly with the supplier.

Mexico

In Mexico, 30% of travelers who start their flight search in a search engine ends up booking directly with the airline and only 12% end up booking with an OTA. For accommodations, 27% end up booking with the supplier and 14% with an OTA.

Those that start their flight search in an OTA, 55% end up booking in the OTA and 23% go to the supplier instead. For accommodations, 77% of those who start their search in the OTA end up booking there, and only 10% opt to book with the supplier.

78% of travelers who search their flights directly with airlines end up booking with them and only 5% with OTAs. 61% of travelers who start their accommodations search with the supplier, buys with them. 16% choose to book with OTAs instead.

Those who start their search with a traditional travel agency, 43% (flights) and 58% (accommodations) book there. Airlines take up 22% of bookers who start their search in traditional travel agencies, and 17% book with OTAs.

I hope to do this type of survey on a quarterly basis. Hopefully including more countries in Latin America and also getting deeper information on a competitor level. Would love to hear from you on what you think of these results and what you’d like to see in future analyses. Thank you!


Latin America Travel Search and Booking was originally published in Travel Tech Essentialist on Medium, where people are continuing the conversation by highlighting and responding to this story.

Latin America Travel Search and Booking


This post is by Mauricio Prieto from Travel Tech Essentialist - Medium

Travel Search and Booking Dynamics in Argentina, Brazil and Mexico

This online survey was done on September 2020 with 18.000 respondents from Argentina, 13.000 from Brazil and 11.000 from Mexico. The responses below apply only to the subsegment of respondents who had purchased a flight or an accommodation (hotel or alternative accommodations) in the previous 12 months: 1134 in Argentina, 1425 in Brazil, 1231 in Mexico. The purpose of this survey was to understand their travel search and booking behaviors.

0. High level summary

Travel Search

  • Online Travel Agencies (OTAs) are the leading channel to start searching for flights and accommodations in Argentina, and for accommodations in Mexico.
  • Search engines are the leading channel to start searching for flights and accommodations in Brazil and for flights in Mexico.

Travel Booking

  • OTAs are the leading channel for booking accommodations in Argentina, Brazil and Mexico
  • Supplier direct (adding online + phone) is the leading channel for booking flights in Argentina, Brazil and Mexico.
  • There is a significant share of consumers who have no preference on the booking channel: 32% of flight bookers in Argentina, 22% of flight bookers in Brazil, 24% of accommodation bookers in Mexico.
  • There is also a significant share of consumers who are attributing their booking experience to the metasearch and search engine channels. There could be some of these travelers who are in fact booking in those channels, but there might also be some confusion on the booking channel. Consumers might be confused on what the booking channel is (or don’t care about it), but there it could point to an opportunity for the booking channel to do a better job at communicating and educating consumers on the value they bring.

Satisfaction levels with travel booking channels

Travel consumers were asked to rank their level of satisfaction (from 1 = very dissatisfied to 5 = very satisfied) with the booking experience on their preferred booking channel.

Search Engines got the best performance (5) results in two instances (Brazil flights and Brazil accommodations) and worst performance results (1+2) in two instances as well (Argentina flights and Argentina accommodations). Traditional travel agencies get the worst performance results in three instances (Mexico flights and accommodations, Brazil accommodations) and best performance results in one (Argentina accommodations).

The channels with the best and worse scores in booking satisfaction (1 = very dissatisfied, 5 = very satisfied)

Search / Book cross tabulation

  • Many more consumers that start searching travel on search engines end up booking directly with suppliers than with OTAs. Maybe this explains partly how vocal OTAs have been about Google’s growing threat.
  • Less than half of travelers in Argentina and Brazil (and 55% in Mexico) who initiate their flight search in an OTA end up booking there.
  • There is significant transfer (between 20% and 30%) from searching flights on OTAs to booking on airlines. Less transfer (around 10%-15%) with searching accommodations on OTAs and booking directly with suppliers. I think there is an opportunity for OTAs to apply metasearch components to monetize on these leads to suppliers.
  • Conversely, the highest “retention” rates (search and book in the same channel) are with flights + airlines and also with accommodations + OTAs. More than 75% of travelers who start their flight search with an airline in Argentina and Mexico (and 53% in Brazil), end up booking there. Around 75% of travelers who start searching accommodations in an OTA in Mexico and Brazil (and 64% in Argentina) end up booking in the OTA.

1. How do you start searching for your flights / accommodations?

In Argentina and Mexico, OTAs are the leading channel to start searching for accommodations, while Brazilians prefer to start their accommodations search in search engines.

For flights, search engines are the leading channel to initiate searches in Brazil and Mexico. Argentinians give a slight edge to OTAs over search engines.

A relatively small share of travelers in Argentina (11%), Brazil (9%) and Mexico (8%) start their accommodation searches directly with suppliers. For flights, more travelers start their searches direct with the airline, with up to 23% of Mexican travelers starting their flight search this way.

2. What is your preferred channel to book flights and accommodations?

33% of Argentinians choose OTAs as their preferred booking channel for accommodations, followed by suppliers (adding online and telephone) with 26%. For flights, the situation is reversed, with 26% choosing to book direct with suppliers, and 20% with OTAs. Worth noting that almost 1/3 of Argentinians don’t have a preference of flight booking channel.

In Brasil, 28% of travelers choose OTAs as their preferred booking channel for accommodations, closely followed by suppliers (online + telephone) with 26% and search engines with 23%. For flight booking, suppliers add up to 28%, slightly ahead of search engines with 27%. OTAs are further back with only 13%, not much more than the 10% of traditional travel agencies.

OTAs are the preferred flight booking channel for 36% of Mexicans, followed by supplier direct (25%) and search engines (18%). For accommodations, supplier direct is the preferred booking channel for for 35% of Mexican travelers, followed by OTAs (18%) and search engines (15%).

3. What is your satisfaction level with your preferred booking channel (1 = very unsatisfied, 5 = very satisfied)

Flight booking satisfaction

In Argentina, the highest levels of satisfaction in booking a flight are with old school channels: traditional travel agencies and directly calling the airline. OTAs and online direct follow closely, both adding up to 79% that ranked their experience as a 4 or 5 (1 being very unsatisfied and 5 very satisfied). Search engines rank the lowest in flight booking satisfaction with 15% being very dissatisfied. Unclear if consumers are attributing to the search engine a redirection to an airline or OTA once the flight has been selected in the search engine.

In Brazil however, search engines have the highest satisfaction levels in flight booking, with 56% of flight bookers giving it a 5, followed by traditional travel agencies (52% of travelers give them a 5). Combining 4 and 5, the metasearch channel shows the best satisfaction levels adding up to 87% of travelers. OTAs and online direct with airline have similar results, with 74% and 76% of travelers respectively giving them a 4 or a 5. There seems to be a big potential for improving the experience of calling an airline to book a flight, since 19% of travelers saying that they are very dissatisfied with their experience.

In Mexico, OTAs and airline direct show the highest satisfaction levels when combining 4 and 5. However, if we only look any 5 (very satisfied), the metasearch channel has the best results. Also here, it is not clear if travelers are booking direct with the metasearch or they are being redirected, and they are ranking their overall experience of finding the right flight through the metasearch and not clear where the booking was made.

Accommodation booking satisfaction

Similar to what we saw with flight bookings, traditional travel agencies have the highest satisfaction levels for booking accommodations in Argentina. Combining 4 and 5, OTAs show the best satisfaction levels (again, similar to flight bookings). Booking accommodations on search engines show the lowest satisfaction levels, with 20% saying they are very dissatisfied, and only 26% very satisfied. This is also consistent with the flight booking results.

In Brazil, search engines have the highest number of very satisfied bookers (54%), followed by online direct (52%). Combining 4 and 5, OTAs have the best results (82%), closely followed by online direct (81%).

In Mexico, OTAs have the highest number of very satisfied bookers (48%), followed by search engines (42%). OTAs, supplier direct and search engines have similar levels of clients with a 4 or 5 satisfaction level.

4. Cross tabulation — Search and Booking

(after searching on each channel, where do consumers end up booking?)

Argentina

23% of travelers who start their flight search on search engines end up booking directly with the airline, while 17% end up booking on an OTA. For accommodations, 25% of travelers who start their accommodations search on search engines end up booking directly with the supplier, while 18% book through an OTA.

Less than half of travelers who initiate their flight search in an OTA end up booking there. 28% finalize their booking with the airline. Different story in accommodations. 73% of those who initiate the search in an OTA end up booking in the OTA, and only 15% with the supplier.

75% of travelers who start their flight search with the airline, end up booking there. Only 8% of these travelers end up booking with an OTA. With accommodations, 57% of travelers who start their accommodations search directly with the supplier, end up booking with the supplier. 15% finalize their booking with an OTA and 11% with a a traditional travel agency.

Brazil

In Brazil, 41% of travelers who initiate their flight search on a search engine end up booking there (or attributing it to that channel), while 22% end up booking with the airline and only 9% with an OTA. For accommodations, 48% of travelers who initiate their flight search on a search engine end up booking there, while 19% end up booking with an OTA and 15% with the supplier.

For travelers who initiate their search in an OTA, only 33% ends up booking their flights there, and 20% books with the airline and 12% with a traditional travel agency. For accommodations, 64% of those initiating their search in an OTA ends up booking with an OTA, 10% with the supplier and 5% with a traditional travel agency.

53% of travelers starting their flight search in an airline end up booking with the airline, while 8% go to an OTA and 5% to a traditional travel agency. Interesting that 20% of those who start a search with an airline end up booking through a search engine (or attributing their booking to that channel)

Of those that start their search in a traditional travel agency, only 22% and 37% end up booking their accommodation and flights there respectively. The supplier is the most benefited from this segment, as 29% and 24% of users that start their searches in a traditional travel agency end up booking their accommodations and flights respectively directly with the supplier.

Mexico

In Mexico, 30% of travelers who start their flight search in a search engine ends up booking directly with the airline and only 12% end up booking with an OTA. For accommodations, 27% end up booking with the supplier and 14% with an OTA.

Those that start their flight search in an OTA, 55% end up booking in the OTA and 23% go to the supplier instead. For accommodations, 77% of those who start their search in the OTA end up booking there, and only 10% opt to book with the supplier.

78% of travelers who search their flights directly with airlines end up booking with them and only 5% with OTAs. 61% of travelers who start their accommodations search with the supplier, buys with them. 16% choose to book with OTAs instead.

Those who start their search with a traditional travel agency, 43% (flights) and 58% (accommodations) book there. Airlines take up 22% of bookers who start their search in traditional travel agencies, and 17% book with OTAs.

I hope to do this type of survey on a quarterly basis. Hopefully including more countries in Latin America and also getting deeper information on a competitor level. Would love to hear from you on what you think of these results and what you’d like to see in future analyses. Thank you!


Latin America Travel Search and Booking was originally published in Travel Tech Essentialist on Medium, where people are continuing the conversation by highlighting and responding to this story.

Latin America Travel Search and Booking


This post is by Mauricio Prieto from Travel Tech Essentialist - Medium

Travel Search and Booking Dynamics in Argentina, Brazil and Mexico

This online survey was done on September 2020 with 18.000 respondents from Argentina, 13.000 from Brazil and 11.000 from Mexico. The responses below apply only to the subsegment of respondents who had purchased a flight or an accommodation (hotel or alternative accommodations) in the previous 12 months: 1134 in Argentina, 1425 in Brazil, 1231 in Mexico. The purpose of this survey was to understand their travel search and booking behaviors.

0. High level summary

Travel Search

  • Online Travel Agencies (OTAs) are the leading channel to start searching for flights and accommodations in Argentina, and for accommodations in Mexico.
  • Search engines are the leading channel to start searching for flights and accommodations in Brazil and for flights in Mexico.

Travel Booking

  • OTAs are the leading channel for booking accommodations in Argentina, Brazil and Mexico
  • Supplier direct (adding online + phone) is the leading channel for booking flights in Argentina, Brazil and Mexico.
  • There is a significant share of consumers who have no preference on the booking channel: 32% of flight bookers in Argentina, 22% of flight bookers in Brazil, 24% of accommodation bookers in Mexico.
  • There is also a significant share of consumers who are attributing their booking experience to the metasearch and search engine channels. There could be some of these travelers who are in fact booking in those channels, but there might also be some confusion on the booking channel. Consumers might be confused on what the booking channel is (or don’t care about it), but there it could point to an opportunity for the booking channel to do a better job at communicating and educating consumers on the value they bring.

Satisfaction levels with travel booking channels

Travel consumers were asked to rank their level of satisfaction (from 1 = very dissatisfied to 5 = very satisfied) with the booking experience on their preferred booking channel.

Search Engines got the best performance (5) results in two instances (Brazil flights and Brazil accommodations) and worst performance results (1+2) in two instances as well (Argentina flights and Argentina accommodations). Traditional travel agencies get the worst performance results in three instances (Mexico flights and accommodations, Brazil accommodations) and best performance results in one (Argentina accommodations).

The channels with the best and worse scores in booking satisfaction (1 = very dissatisfied, 5 = very satisfied)

Search / Book cross tabulation

  • Many more consumers that start searching travel on search engines end up booking directly with suppliers than with OTAs. Maybe this explains partly how vocal OTAs have been about Google’s growing threat.
  • Less than half of travelers in Argentina and Brazil (and 55% in Mexico) who initiate their flight search in an OTA end up booking there.
  • There is significant transfer (between 20% and 30%) from searching flights on OTAs to booking on airlines. Less transfer (around 10%-15%) with searching accommodations on OTAs and booking directly with suppliers. I think there is an opportunity for OTAs to apply metasearch components to monetize on these leads to suppliers.
  • Conversely, the highest “retention” rates (search and book in the same channel) are with flights + airlines and also with accommodations + OTAs. More than 75% of travelers who start their flight search with an airline in Argentina and Mexico (and 53% in Brazil), end up booking there. Around 75% of travelers who start searching accommodations in an OTA in Mexico and Brazil (and 64% in Argentina) end up booking in the OTA.

1. How do you start searching for your flights / accommodations?

In Argentina and Mexico, OTAs are the leading channel to start searching for accommodations, while Brazilians prefer to start their accommodations search in search engines.

For flights, search engines are the leading channel to initiate searches in Brazil and Mexico. Argentinians give a slight edge to OTAs over search engines.

A relatively small share of travelers in Argentina (11%), Brazil (9%) and Mexico (8%) start their accommodation searches directly with suppliers. For flights, more travelers start their searches direct with the airline, with up to 23% of Mexican travelers starting their flight search this way.

2. What is your preferred channel to book flights and accommodations?

33% of Argentinians choose OTAs as their preferred booking channel for accommodations, followed by suppliers (adding online and telephone) with 26%. For flights, the situation is reversed, with 26% choosing to book direct with suppliers, and 20% with OTAs. Worth noting that almost 1/3 of Argentinians don’t have a preference of flight booking channel.

In Brasil, 28% of travelers choose OTAs as their preferred booking channel for accommodations, closely followed by suppliers (online + telephone) with 26% and search engines with 23%. For flight booking, suppliers add up to 28%, slightly ahead of search engines with 27%. OTAs are further back with only 13%, not much more than the 10% of traditional travel agencies.

OTAs are the preferred flight booking channel for 36% of Mexicans, followed by supplier direct (25%) and search engines (18%). For accommodations, supplier direct is the preferred booking channel for for 35% of Mexican travelers, followed by OTAs (18%) and search engines (15%).

3. What is your satisfaction level with your preferred booking channel (1 = very unsatisfied, 5 = very satisfied)

Flight booking satisfaction

In Argentina, the highest levels of satisfaction in booking a flight are with old school channels: traditional travel agencies and directly calling the airline. OTAs and online direct follow closely, both adding up to 79% that ranked their experience as a 4 or 5 (1 being very unsatisfied and 5 very satisfied). Search engines rank the lowest in flight booking satisfaction with 15% being very dissatisfied. Unclear if consumers are attributing to the search engine a redirection to an airline or OTA once the flight has been selected in the search engine.

In Brazil however, search engines have the highest satisfaction levels in flight booking, with 56% of flight bookers giving it a 5, followed by traditional travel agencies (52% of travelers give them a 5). Combining 4 and 5, the metasearch channel shows the best satisfaction levels adding up to 87% of travelers. OTAs and online direct with airline have similar results, with 74% and 76% of travelers respectively giving them a 4 or a 5. There seems to be a big potential for improving the experience of calling an airline to book a flight, since 19% of travelers saying that they are very dissatisfied with their experience.

In Mexico, OTAs and airline direct show the highest satisfaction levels when combining 4 and 5. However, if we only look any 5 (very satisfied), the metasearch channel has the best results. Also here, it is not clear if travelers are booking direct with the metasearch or they are being redirected, and they are ranking their overall experience of finding the right flight through the metasearch and not clear where the booking was made.

Accommodation booking satisfaction

Similar to what we saw with flight bookings, traditional travel agencies have the highest satisfaction levels for booking accommodations in Argentina. Combining 4 and 5, OTAs show the best satisfaction levels (again, similar to flight bookings). Booking accommodations on search engines show the lowest satisfaction levels, with 20% saying they are very dissatisfied, and only 26% very satisfied. This is also consistent with the flight booking results.

In Brazil, search engines have the highest number of very satisfied bookers (54%), followed by online direct (52%). Combining 4 and 5, OTAs have the best results (82%), closely followed by online direct (81%).

In Mexico, OTAs have the highest number of very satisfied bookers (48%), followed by search engines (42%). OTAs, supplier direct and search engines have similar levels of clients with a 4 or 5 satisfaction level.

4. Cross tabulation — Search and Booking

(after searching on each channel, where do consumers end up booking?)

Argentina

23% of travelers who start their flight search on search engines end up booking directly with the airline, while 17% end up booking on an OTA. For accommodations, 25% of travelers who start their accommodations search on search engines end up booking directly with the supplier, while 18% book through an OTA.

Less than half of travelers who initiate their flight search in an OTA end up booking there. 28% finalize their booking with the airline. Different story in accommodations. 73% of those who initiate the search in an OTA end up booking in the OTA, and only 15% with the supplier.

75% of travelers who start their flight search with the airline, end up booking there. Only 8% of these travelers end up booking with an OTA. With accommodations, 57% of travelers who start their accommodations search directly with the supplier, end up booking with the supplier. 15% finalize their booking with an OTA and 11% with a a traditional travel agency.

Brazil

In Brazil, 41% of travelers who initiate their flight search on a search engine end up booking there (or attributing it to that channel), while 22% end up booking with the airline and only 9% with an OTA. For accommodations, 48% of travelers who initiate their flight search on a search engine end up booking there, while 19% end up booking with an OTA and 15% with the supplier.

For travelers who initiate their search in an OTA, only 33% ends up booking their flights there, and 20% books with the airline and 12% with a traditional travel agency. For accommodations, 64% of those initiating their search in an OTA ends up booking with an OTA, 10% with the supplier and 5% with a traditional travel agency.

53% of travelers starting their flight search in an airline end up booking with the airline, while 8% go to an OTA and 5% to a traditional travel agency. Interesting that 20% of those who start a search with an airline end up booking through a search engine (or attributing their booking to that channel)

Of those that start their search in a traditional travel agency, only 22% and 37% end up booking their accommodation and flights there respectively. The supplier is the most benefited from this segment, as 29% and 24% of users that start their searches in a traditional travel agency end up booking their accommodations and flights respectively directly with the supplier.

Mexico

In Mexico, 30% of travelers who start their flight search in a search engine ends up booking directly with the airline and only 12% end up booking with an OTA. For accommodations, 27% end up booking with the supplier and 14% with an OTA.

Those that start their flight search in an OTA, 55% end up booking in the OTA and 23% go to the supplier instead. For accommodations, 77% of those who start their search in the OTA end up booking there, and only 10% opt to book with the supplier.

78% of travelers who search their flights directly with airlines end up booking with them and only 5% with OTAs. 61% of travelers who start their accommodations search with the supplier, buys with them. 16% choose to book with OTAs instead.

Those who start their search with a traditional travel agency, 43% (flights) and 58% (accommodations) book there. Airlines take up 22% of bookers who start their search in traditional travel agencies, and 17% book with OTAs.

I hope to do this type of survey on a quarterly basis. Hopefully including more countries in Latin America and also getting deeper information on a competitor level. Would love to hear from you on what you think of these results and what you’d like to see in future analyses. Thank you!


Latin America Travel Search and Booking was originally published in Travel Tech Essentialist on Medium, where people are continuing the conversation by highlighting and responding to this story.

Latin America Travel Search and Booking


This post is by Mauricio Prieto from Travel Tech Essentialist - Medium

Travel Search and Booking Dynamics in Argentina, Brazil and Mexico

This online survey was done on September 2020 with 18.000 respondents from Argentina, 13.000 from Brazil and 11.000 from Mexico. The responses below apply only to the subsegment of respondents who had purchased a flight or an accommodation (hotel or alternative accommodations) in the previous 12 months: 1134 in Argentina, 1425 in Brazil, 1231 in Mexico. The purpose of this survey was to understand their travel search and booking behaviors.

0. High level summary

Travel Search

  • Online Travel Agencies (OTAs) are the leading channel to start searching for flights and accommodations in Argentina, and for accommodations in Mexico.
  • Search engines are the leading channel to start searching for flights and accommodations in Brazil and for flights in Mexico.

Travel Booking

  • OTAs are the leading channel for booking accommodations in Argentina, Brazil and Mexico
  • Supplier direct (adding online + phone) is the leading channel for booking flights in Argentina, Brazil and Mexico.
  • There is a significant share of consumers who have no preference on the booking channel: 32% of flight bookers in Argentina, 22% of flight bookers in Brazil, 24% of accommodation bookers in Mexico.
  • There is also a significant share of consumers who are attributing their booking experience to the metasearch and search engine channels. There could be some of these travelers who are in fact booking in those channels, but there might also be some confusion on the booking channel. Consumers might be confused on what the booking channel is (or don’t care about it), but there it could point to an opportunity for the booking channel to do a better job at communicating and educating consumers on the value they bring.

Satisfaction levels with travel booking channels

Travel consumers were asked to rank their level of satisfaction (from 1 = very dissatisfied to 5 = very satisfied) with the booking experience on their preferred booking channel.

Search Engines got the best performance (5) results in two instances (Brazil flights and Brazil accommodations) and worst performance results (1+2) in two instances as well (Argentina flights and Argentina accommodations). Traditional travel agencies get the worst performance results in three instances (Mexico flights and accommodations, Brazil accommodations) and best performance results in one (Argentina accommodations).

The channels with the best and worse scores in booking satisfaction (1 = very dissatisfied, 5 = very satisfied)

Search / Book cross tabulation

  • Many more consumers that start searching travel on search engines end up booking directly with suppliers than with OTAs. Maybe this explains partly how vocal OTAs have been about Google’s growing threat.
  • Less than half of travelers in Argentina and Brazil (and 55% in Mexico) who initiate their flight search in an OTA end up booking there.
  • There is significant transfer (between 20% and 30%) from searching flights on OTAs to booking on airlines. Less transfer (around 10%-15%) with searching accommodations on OTAs and booking directly with suppliers. I think there is an opportunity for OTAs to apply metasearch components to monetize on these leads to suppliers.
  • Conversely, the highest “retention” rates (search and book in the same channel) are with flights + airlines and also with accommodations + OTAs. More than 75% of travelers who start their flight search with an airline in Argentina and Mexico (and 53% in Brazil), end up booking there. Around 75% of travelers who start searching accommodations in an OTA in Mexico and Brazil (and 64% in Argentina) end up booking in the OTA.

1. How do you start searching for your flights / accommodations?

In Argentina and Mexico, OTAs are the leading channel to start searching for accommodations, while Brazilians prefer to start their accommodations search in search engines.

For flights, search engines are the leading channel to initiate searches in Brazil and Mexico. Argentinians give a slight edge to OTAs over search engines.

A relatively small share of travelers in Argentina (11%), Brazil (9%) and Mexico (8%) start their accommodation searches directly with suppliers. For flights, more travelers start their searches direct with the airline, with up to 23% of Mexican travelers starting their flight search this way.

2. What is your preferred channel to book flights and accommodations?

33% of Argentinians choose OTAs as their preferred booking channel for accommodations, followed by suppliers (adding online and telephone) with 26%. For flights, the situation is reversed, with 26% choosing to book direct with suppliers, and 20% with OTAs. Worth noting that almost 1/3 of Argentinians don’t have a preference of flight booking channel.

In Brasil, 28% of travelers choose OTAs as their preferred booking channel for accommodations, closely followed by suppliers (online + telephone) with 26% and search engines with 23%. For flight booking, suppliers add up to 28%, slightly ahead of search engines with 27%. OTAs are further back with only 13%, not much more than the 10% of traditional travel agencies.

OTAs are the preferred flight booking channel for 36% of Mexicans, followed by supplier direct (25%) and search engines (18%). For accommodations, supplier direct is the preferred booking channel for for 35% of Mexican travelers, followed by OTAs (18%) and search engines (15%).

3. What is your satisfaction level with your preferred booking channel (1 = very unsatisfied, 5 = very satisfied)

Flight booking satisfaction

In Argentina, the highest levels of satisfaction in booking a flight are with old school channels: traditional travel agencies and directly calling the airline. OTAs and online direct follow closely, both adding up to 79% that ranked their experience as a 4 or 5 (1 being very unsatisfied and 5 very satisfied). Search engines rank the lowest in flight booking satisfaction with 15% being very dissatisfied. Unclear if consumers are attributing to the search engine a redirection to an airline or OTA once the flight has been selected in the search engine.

In Brazil however, search engines have the highest satisfaction levels in flight booking, with 56% of flight bookers giving it a 5, followed by traditional travel agencies (52% of travelers give them a 5). Combining 4 and 5, the metasearch channel shows the best satisfaction levels adding up to 87% of travelers. OTAs and online direct with airline have similar results, with 74% and 76% of travelers respectively giving them a 4 or a 5. There seems to be a big potential for improving the experience of calling an airline to book a flight, since 19% of travelers saying that they are very dissatisfied with their experience.

In Mexico, OTAs and airline direct show the highest satisfaction levels when combining 4 and 5. However, if we only look any 5 (very satisfied), the metasearch channel has the best results. Also here, it is not clear if travelers are booking direct with the metasearch or they are being redirected, and they are ranking their overall experience of finding the right flight through the metasearch and not clear where the booking was made.

Accommodation booking satisfaction

Similar to what we saw with flight bookings, traditional travel agencies have the highest satisfaction levels for booking accommodations in Argentina. Combining 4 and 5, OTAs show the best satisfaction levels (again, similar to flight bookings). Booking accommodations on search engines show the lowest satisfaction levels, with 20% saying they are very dissatisfied, and only 26% very satisfied. This is also consistent with the flight booking results.

In Brazil, search engines have the highest number of very satisfied bookers (54%), followed by online direct (52%). Combining 4 and 5, OTAs have the best results (82%), closely followed by online direct (81%).

In Mexico, OTAs have the highest number of very satisfied bookers (48%), followed by search engines (42%). OTAs, supplier direct and search engines have similar levels of clients with a 4 or 5 satisfaction level.

4. Cross tabulation — Search and Booking

(after searching on each channel, where do consumers end up booking?)

Argentina

23% of travelers who start their flight search on search engines end up booking directly with the airline, while 17% end up booking on an OTA. For accommodations, 25% of travelers who start their accommodations search on search engines end up booking directly with the supplier, while 18% book through an OTA.

Less than half of travelers who initiate their flight search in an OTA end up booking there. 28% finalize their booking with the airline. Different story in accommodations. 73% of those who initiate the search in an OTA end up booking in the OTA, and only 15% with the supplier.

75% of travelers who start their flight search with the airline, end up booking there. Only 8% of these travelers end up booking with an OTA. With accommodations, 57% of travelers who start their accommodations search directly with the supplier, end up booking with the supplier. 15% finalize their booking with an OTA and 11% with a a traditional travel agency.

Brazil

In Brazil, 41% of travelers who initiate their flight search on a search engine end up booking there (or attributing it to that channel), while 22% end up booking with the airline and only 9% with an OTA. For accommodations, 48% of travelers who initiate their flight search on a search engine end up booking there, while 19% end up booking with an OTA and 15% with the supplier.

For travelers who initiate their search in an OTA, only 33% ends up booking their flights there, and 20% books with the airline and 12% with a traditional travel agency. For accommodations, 64% of those initiating their search in an OTA ends up booking with an OTA, 10% with the supplier and 5% with a traditional travel agency.

53% of travelers starting their flight search in an airline end up booking with the airline, while 8% go to an OTA and 5% to a traditional travel agency. Interesting that 20% of those who start a search with an airline end up booking through a search engine (or attributing their booking to that channel)

Of those that start their search in a traditional travel agency, only 22% and 37% end up booking their accommodation and flights there respectively. The supplier is the most benefited from this segment, as 29% and 24% of users that start their searches in a traditional travel agency end up booking their accommodations and flights respectively directly with the supplier.

Mexico

In Mexico, 30% of travelers who start their flight search in a search engine ends up booking directly with the airline and only 12% end up booking with an OTA. For accommodations, 27% end up booking with the supplier and 14% with an OTA.

Those that start their flight search in an OTA, 55% end up booking in the OTA and 23% go to the supplier instead. For accommodations, 77% of those who start their search in the OTA end up booking there, and only 10% opt to book with the supplier.

78% of travelers who search their flights directly with airlines end up booking with them and only 5% with OTAs. 61% of travelers who start their accommodations search with the supplier, buys with them. 16% choose to book with OTAs instead.

Those who start their search with a traditional travel agency, 43% (flights) and 58% (accommodations) book there. Airlines take up 22% of bookers who start their search in traditional travel agencies, and 17% book with OTAs.

I hope to do this type of survey on a quarterly basis. Hopefully including more countries in Latin America and also getting deeper information on a competitor level. Would love to hear from you on what you think of these results and what you’d like to see in future analyses. Thank you!


Latin America Travel Search and Booking was originally published in Travel Tech Essentialist on Medium, where people are continuing the conversation by highlighting and responding to this story.

Latin America Travel Search and Booking


This post is by Mauricio Prieto from Travel Tech Essentialist - Medium

Travel Search and Booking Dynamics in Argentina, Brazil and Mexico

This online survey was done on September 2020 with 18.000 respondents from Argentina, 13.000 from Brazil and 11.000 from Mexico. The responses below apply only to the subsegment of respondents who had purchased a flight or an accommodation (hotel or alternative accommodations) in the previous 12 months: 1134 in Argentina, 1425 in Brazil, 1231 in Mexico. The purpose of this survey was to understand their travel search and booking behaviors.

0. High level summary

Travel Search

  • Online Travel Agencies (OTAs) are the leading channel to start searching for flights and accommodations in Argentina, and for accommodations in Mexico.
  • Search engines are the leading channel to start searching for flights and accommodations in Brazil and for flights in Mexico.

Travel Booking

  • OTAs are the leading channel for booking accommodations in Argentina, Brazil and Mexico
  • Supplier direct (adding online + phone) is the leading channel for booking flights in Argentina, Brazil and Mexico.
  • There is a significant share of consumers who have no preference on the booking channel: 32% of flight bookers in Argentina, 22% of flight bookers in Brazil, 24% of accommodation bookers in Mexico.
  • There is also a significant share of consumers who are attributing their booking experience to the metasearch and search engine channels. There could be some of these travelers who are in fact booking in those channels, but there might also be some confusion on the booking channel. Consumers might be confused on what the booking channel is (or don’t care about it), but there it could point to an opportunity for the booking channel to do a better job at communicating and educating consumers on the value they bring.

Satisfaction levels with travel booking channels

Travel consumers were asked to rank their level of satisfaction (from 1 = very dissatisfied to 5 = very satisfied) with the booking experience on their preferred booking channel.

Search Engines got the best performance (5) results in two instances (Brazil flights and Brazil accommodations) and worst performance results (1+2) in two instances as well (Argentina flights and Argentina accommodations). Traditional travel agencies get the worst performance results in three instances (Mexico flights and accommodations, Brazil accommodations) and best performance results in one (Argentina accommodations).

The channels with the best and worse scores in booking satisfaction (1 = very dissatisfied, 5 = very satisfied)

Search / Book cross tabulation

  • Many more consumers that start searching travel on search engines end up booking directly with suppliers than with OTAs. Maybe this explains partly how vocal OTAs have been about Google’s growing threat.
  • Less than half of travelers in Argentina and Brazil (and 55% in Mexico) who initiate their flight search in an OTA end up booking there.
  • There is significant transfer (between 20% and 30%) from searching flights on OTAs to booking on airlines. Less transfer (around 10%-15%) with searching accommodations on OTAs and booking directly with suppliers. I think there is an opportunity for OTAs to apply metasearch components to monetize on these leads to suppliers.
  • Conversely, the highest “retention” rates (search and book in the same channel) are with flights + airlines and also with accommodations + OTAs. More than 75% of travelers who start their flight search with an airline in Argentina and Mexico (and 53% in Brazil), end up booking there. Around 75% of travelers who start searching accommodations in an OTA in Mexico and Brazil (and 64% in Argentina) end up booking in the OTA.

1. How do you start searching for your flights / accommodations?

In Argentina and Mexico, OTAs are the leading channel to start searching for accommodations, while Brazilians prefer to start their accommodations search in search engines.

For flights, search engines are the leading channel to initiate searches in Brazil and Mexico. Argentinians give a slight edge to OTAs over search engines.

A relatively small share of travelers in Argentina (11%), Brazil (9%) and Mexico (8%) start their accommodation searches directly with suppliers. For flights, more travelers start their searches direct with the airline, with up to 23% of Mexican travelers starting their flight search this way.

2. What is your preferred channel to book flights and accommodations?

33% of Argentinians choose OTAs as their preferred booking channel for accommodations, followed by suppliers (adding online and telephone) with 26%. For flights, the situation is reversed, with 26% choosing to book direct with suppliers, and 20% with OTAs. Worth noting that almost 1/3 of Argentinians don’t have a preference of flight booking channel.

In Brasil, 28% of travelers choose OTAs as their preferred booking channel for accommodations, closely followed by suppliers (online + telephone) with 26% and search engines with 23%. For flight booking, suppliers add up to 28%, slightly ahead of search engines with 27%. OTAs are further back with only 13%, not much more than the 10% of traditional travel agencies.

OTAs are the preferred flight booking channel for 36% of Mexicans, followed by supplier direct (25%) and search engines (18%). For accommodations, supplier direct is the preferred booking channel for for 35% of Mexican travelers, followed by OTAs (18%) and search engines (15%).

3. What is your satisfaction level with your preferred booking channel (1 = very unsatisfied, 5 = very satisfied)

Flight booking satisfaction

In Argentina, the highest levels of satisfaction in booking a flight are with old school channels: traditional travel agencies and directly calling the airline. OTAs and online direct follow closely, both adding up to 79% that ranked their experience as a 4 or 5 (1 being very unsatisfied and 5 very satisfied). Search engines rank the lowest in flight booking satisfaction with 15% being very dissatisfied. Unclear if consumers are attributing to the search engine a redirection to an airline or OTA once the flight has been selected in the search engine.

In Brazil however, search engines have the highest satisfaction levels in flight booking, with 56% of flight bookers giving it a 5, followed by traditional travel agencies (52% of travelers give them a 5). Combining 4 and 5, the metasearch channel shows the best satisfaction levels adding up to 87% of travelers. OTAs and online direct with airline have similar results, with 74% and 76% of travelers respectively giving them a 4 or a 5. There seems to be a big potential for improving the experience of calling an airline to book a flight, since 19% of travelers saying that they are very dissatisfied with their experience.

In Mexico, OTAs and airline direct show the highest satisfaction levels when combining 4 and 5. However, if we only look any 5 (very satisfied), the metasearch channel has the best results. Also here, it is not clear if travelers are booking direct with the metasearch or they are being redirected, and they are ranking their overall experience of finding the right flight through the metasearch and not clear where the booking was made.

Accommodation booking satisfaction

Similar to what we saw with flight bookings, traditional travel agencies have the highest satisfaction levels for booking accommodations in Argentina. Combining 4 and 5, OTAs show the best satisfaction levels (again, similar to flight bookings). Booking accommodations on search engines show the lowest satisfaction levels, with 20% saying they are very dissatisfied, and only 26% very satisfied. This is also consistent with the flight booking results.

In Brazil, search engines have the highest number of very satisfied bookers (54%), followed by online direct (52%). Combining 4 and 5, OTAs have the best results (82%), closely followed by online direct (81%).

In Mexico, OTAs have the highest number of very satisfied bookers (48%), followed by search engines (42%). OTAs, supplier direct and search engines have similar levels of clients with a 4 or 5 satisfaction level.

4. Cross tabulation — Search and Booking

(after searching on each channel, where do consumers end up booking?)

Argentina

23% of travelers who start their flight search on search engines end up booking directly with the airline, while 17% end up booking on an OTA. For accommodations, 25% of travelers who start their accommodations search on search engines end up booking directly with the supplier, while 18% book through an OTA.

Less than half of travelers who initiate their flight search in an OTA end up booking there. 28% finalize their booking with the airline. Different story in accommodations. 73% of those who initiate the search in an OTA end up booking in the OTA, and only 15% with the supplier.

75% of travelers who start their flight search with the airline, end up booking there. Only 8% of these travelers end up booking with an OTA. With accommodations, 57% of travelers who start their accommodations search directly with the supplier, end up booking with the supplier. 15% finalize their booking with an OTA and 11% with a a traditional travel agency.

Brazil

In Brazil, 41% of travelers who initiate their flight search on a search engine end up booking there (or attributing it to that channel), while 22% end up booking with the airline and only 9% with an OTA. For accommodations, 48% of travelers who initiate their flight search on a search engine end up booking there, while 19% end up booking with an OTA and 15% with the supplier.

For travelers who initiate their search in an OTA, only 33% ends up booking their flights there, and 20% books with the airline and 12% with a traditional travel agency. For accommodations, 64% of those initiating their search in an OTA ends up booking with an OTA, 10% with the supplier and 5% with a traditional travel agency.

53% of travelers starting their flight search in an airline end up booking with the airline, while 8% go to an OTA and 5% to a traditional travel agency. Interesting that 20% of those who start a search with an airline end up booking through a search engine (or attributing their booking to that channel)

Of those that start their search in a traditional travel agency, only 22% and 37% end up booking their accommodation and flights there respectively. The supplier is the most benefited from this segment, as 29% and 24% of users that start their searches in a traditional travel agency end up booking their accommodations and flights respectively directly with the supplier.

Mexico

In Mexico, 30% of travelers who start their flight search in a search engine ends up booking directly with the airline and only 12% end up booking with an OTA. For accommodations, 27% end up booking with the supplier and 14% with an OTA.

Those that start their flight search in an OTA, 55% end up booking in the OTA and 23% go to the supplier instead. For accommodations, 77% of those who start their search in the OTA end up booking there, and only 10% opt to book with the supplier.

78% of travelers who search their flights directly with airlines end up booking with them and only 5% with OTAs. 61% of travelers who start their accommodations search with the supplier, buys with them. 16% choose to book with OTAs instead.

Those who start their search with a traditional travel agency, 43% (flights) and 58% (accommodations) book there. Airlines take up 22% of bookers who start their search in traditional travel agencies, and 17% book with OTAs.

I hope to do this type of survey on a quarterly basis. Hopefully including more countries in Latin America and also getting deeper information on a competitor level. Would love to hear from you on what you think of these results and what you’d like to see in future analyses. Thank you!


Latin America Travel Search and Booking was originally published in Travel Tech Essentialist on Medium, where people are continuing the conversation by highlighting and responding to this story.

Investing in Casai


This post is by Lauren Murrow from Andreessen Horowitz

The nature of travel, especially work travel, is undergoing a seismic change. In the post-COVID future, we may travel less frequently but stay for longer; companies may hire more remotely and workers may travel to their headquarters for extended periods.

The post Investing in Casai appeared first on Andreessen Horowitz.

Understanding Airbnb’s summer recovery


This post is by Alex Wilhelm from Fundings & Exits – TechCrunch

New numbers concerning Airbnb’s summer performance were reported this week, with The Information adding to the performance figures that Bloomberg previously detailed earlier this year.

Airbnb announced that it filed privately to pursue a debut this August. We have yet to see its public IPO filing, but, all the same, the flotation is coming.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


If you’re like me, this year’s chaotic news cycles have made it hard to track any single story well. So this morning I want to put together a financially focused chronology of Airbnb’s year, including the new data. Enough has happened over the past few months that any prior work we’ve done is too dated to use.

So, let’s rewind the clock and dig into the biggest financial moment from Airbnb’s 2020, capping off with the latest reporting, including details from the company itself on booking volume recovery as we go.

This should be easy, fun and useful. Let’s go!

Airbnb’s 2020

Heading into 2020, Airbnb promised to go public in 2020. Given that there’s technical pressure from holders of Airbnb stock options for the company go public inside the year, the vow made sense. Airbnb was founded around 12 years ago, meaning that the company was already a bit aged for a private firm on an IPO path. Toss in the options issue, and if Airbnb wanted to hold onto its workforce, this was the year to go.

And Airbnb was well-capitalized heading into this year, so a direct listing was in the cards.

Enter 2020 and a few unexpected events. When COVID-19 hit Airbnb’s key markets it took the travel market with it, leading to this column asking on March 18th whether the company could go public this year given the state of its industry. At that point we knew that Airbnb’s cash balance was about $2 billion heading into the start of the year, and that the company had reported Q4 2019 revenue of around $1.1 billion (+32% YoY, per Bloomberg) and negative earnings before interest, taxes, depreciation and amortization of $276.4 million (+92.4% YoY, per Bloomberg).

The company’s persistent lack of profits heading into 2020 was the subject of our curiosity at the start of the year.

In late March, Airbnb announced that it would pay out $250 million to hosts to soften the blow of the pandemic’s travel declines. That was not a cheap move, and when the company expanded the policy this column wrote that it was “an intelligent if expensive way to help preserve user trust.”

Travel activities platform KKDay raises $75 million Series C as it focuses on “staycations”


This post is by Catherine Shu from Fundings & Exits – TechCrunch

With lockdowns around the world, the COVID-19 pandemic has hit the travel industry especially hard. In Asia, however, several startups are adapting by focusing on domestic activities (or “staycations”) instead of international travel. They include Taipei-based KKday, which announced today that it has closed a $75 million Series C led by Cool Japan Fund and the National Development Fund of Taiwan. Existing investors Monk’s Hill Ventures and MindWorks Capital also returned for the round.

Founded in 2014, KKDay will use its new funding on Rezio, a booking management platform it began piloting in March, starting with Japan and Taiwan.

Created for tour operators and activity providers, especially those who previously operated mostly offline, Rezio can help reduce operational costs by allowing its users to set up a booking website that works with different payment gateways and manage availability by tracking bookings from different channels. The latter is especially important during the pandemic because many venues have set up capacity limits.

The company says that Rezio has served over 150,000 customers so far, and will be launched in more Asian markets with its Series C funding. KKDay currently has more than five million users on its platform, and has hosted more than 30,000 tours and other activities so far in 92 countries.

In May 2020, the company began seeing more demand for local travel in Japan, Taiwan and Hong Kong. This parallels Klook, which also saw an increase in demand for “staycations” bookings that helped it recover after its business was hurt during the early stages of the pandemic in Asia.

In a statement, Cool Japan Fund managing director Kazushi Sano said his firm invested in KKDay because “we believe that KKDay’s strong execution and innovative mindset will drive the tourism industry in Japan even under adverse conditions.”

The Non-Obvious Insights Show – Episode #233


This post is by n Rohit n from Influential Marketing

This week’s stories will include desperate airlines selling in-flight meals online, the LA Olympic committee’s brilliantly inclusive new logo, how to use stupidity to get a promotion, a conversation with Silicon Valley’s last ethical thinker and how a Japanese rock star and Lady Gaga are showing us the future of virtual performances.

This Week’s Stories:

The Non-Obvious Insights Show – Episode #233


This post is by n Rohit n from Influential Marketing

This week’s stories will include desperate airlines selling in-flight meals online, the LA Olympic committee’s brilliantly inclusive new logo, how to use stupidity to get a promotion, a conversation with Silicon Valley’s last ethical thinker and how a Japanese rock star and Lady Gaga are showing us the future of virtual performances.

This Week’s Stories:

The 100 Most Popular City Destinations


This post is by Theras A.G. Wood from Visual Capitalist

100 Most Popular City Destinations for Travel

The 100 Most Popular City Destinations

The pandemic has grounded many of us, but it can’t curb human wanderlust.

Cities like Hong Kong, Bangkok, and London have led city destination rankings for years, but movement within the ranks below them—revealed in the above infographic—help to highlight the intriguing travel trends happening before COVID-19.

With data from Euromonitor International’s 2019 travel report, we can uncover where travelers are likely headed once their passports are useful again. Pulling data from 400 cities, collected into mid-2019, the report encompasses millions of international travelers who stayed at their destination longer than 24 hours.

Here’s a closer look at where travelers are likely to touch down in post-pandemic life.

Not-So-Lonely At the Top

Although the top of this list has remained fairly stable in terms of rank in recent years, two cities have seen an impressive influx of travelers.

Paris and Istanbul both made significant gains between 2017 and 2019 with 20.6% and 37.2% growth in visitors respectively:

Note that only one North American city, New York City, is found in this top 10. As well, Asian cities account for half of the leading group, with two of the top 10 cities are located in China. Although Hong Kong leads the top 100 list, political turmoil led to a marked decline of international visitors of 4.2% from 2017 to 2019.

The largest rank changes in the top 10 were made by Macau and Istanbul, but the rise was subtle. Both cities gained two spots each between 2013 and 2018, though each had sizable traveler growth rates, with Macau growing by 19.0%.

Rank City Country Arrivals (Millions) 5yr Rank Change Growth (’17-19)
1 Hong Kong China (SAR) 29.26 -4.2%
2 Bangkok Thailand 24.17 15.1%
3 London United Kingdom 19.23 -1.4%
4 Macau China (SAR) 18.93 2 19.0%
5 Singapore Singapore 18.55 -1 12.2%
6 Paris France 17.56 -1 20.6%
7 Dubai UAE 15.92 3.4%
8 New York City US 13.60 1 7.0%
9 Kuala Lumpur Malaysia 13.43 1 9.6%
10 Istanbul Turkey 13.43 2 37.2%
11 Delhi India 12.65 30 49.6%
12 Antalya Turkey 12.44 -1 40.6%
13 Shenzhen China 12.20 -5 2.0%
14 Mumbai India 10.59 28 38.5%
15 Phuket Thailand 10.55 8.4%
16 Rome Italy 10.07 -3 8.3%
17 Tokyo Japan 9.99 15 9.3%
18 Pattaya Thailand 9.61 -1 8.9%
19 Taipei Taiwan, China 9.60 -1 7.7%
20 Mecca Saudi Arabia 9.57 1 0.3%
21 Guangzhou China 9.00 -5 0.1%
22 Prague Czechia 8.95 -3 3.9%
23 Medina Saudi Arabia 8.55 1 0.7%
24 Seoul South Korea 8.43 -10 19.1%
25 Amsterdam Netherlands 8.35 3 12.6%
26 Agra India 8.14 38 52.6%
27 Miami US 8.12 -7 6.9%
28 Osaka Japan 7.86 69 36.2%
29 Los Angeles US 7.50 -7 7.8%
30 Shanghai China 7.48 -7 7.8%
31 Ho Chi Minh City Vietnam 7.20 6 31.6%
32 Denpasar Indonesia 7.19 13 37.5%
33 Barcelona Spain 6.71 -6 11.6%
34 Las Vegas US 6.59 -9 -0.8%
35 Milan Italy 6.48 -9 3.9%
36 Chennai India 6.42 7 55.8%
37 Vienna Austria 6.41 -8 7.1%
38 Johor Bahru Malaysia 6.40 8 29.8%
39 Jaipur India 6.38 29 42.9%
40 Cancun Mexico 6.04 17 1.8%
41 Berlin Germany 5.96 -10 10.1%
42 Cairo Egypt 5.75 18 55.1%
43 Athens Greece 5.73 18 31.3%
44 Orlando US 5.55 -10 8.7%
45 Moscow Russia 5.51 -10 24.4%
46 Venice Italy 5.50 -16 5.3%
47 Madrid Spain 5.44 -8 6.3%
48 Ha Long Vietnam 5.29 14 44.0%
49 Riyadh Saudi Arabia 5.27 -9 0.9%
50 Dublin Ireland 5.21 -12 9.4%
51 Florence Italy 5.06 -15 3.9%
52 Ha Noi Vietnam 4.69 21 19.3%
53 Toronto Canada 4.51 10.5%
54 Johannesburg South Africa 4.12 -10 3.4%
55 Sydney Australia 4.09 1 12.1%
56 Munich Germany 4.06 -7 11.0%
57 Jakarta Indonesia 4.03 17 30.9%
58 Beijing China 4.00 -25 3.8%
59 St. Petersburg Russia 4.00 -11 23.9%
60 Brussels Belgium 3.94 -13 24.8%
61 Jerusalem Israel 3.93 -9 27.0%
62 Budapest Hungary 3.82 -7 10.4%
63 Lisbon Portugal 3.54 9 3.4%
64 Dammam Saudi Arabia 3.50 -14 0.3%
65 Penang Island Malaysia 3.44 -2 16.3%
66 Heraklion Greece 3.40 -1 -3.8%
67 Kyoto Japan 3.29 58 4.4%
68 Zhuhai China 3.26 -9 4.4%
69 Vancouver Canada 3.21 13 13.3%
70 Chiang Mai Thailand 3.20 6 4.2%
71 Copenhagen Denmark 3.07 8 7.8%
72 San Francisco US 2.90 -14 3.1%
73 Melbourne Australia 2.89 12 20.9%
74 Krakow Poland 2.85 -8 3.9%
75 Marrakech Morocco 2.84 2 13.1%
76 Kolkatta India 2.83 14 22.3%
77 Cebu Philippines 2.81 51 -4.2%
78 Auckland New Zealand 2.80 6 9.7%
79 Tel Aviv Israel 2.78 -8 16.0%
80 Guilin China 2.75 29 19.7%
81 Honolulu US 2.74 -11 6.0%
82 Hurgada Egypt 2.74 45 108.1%
83 Warsaw Poland 2.73 -16 7.2%
84 Mugla Turkey 2.72 -33 47.5%
85 Buenos Aires City Argentina 2.69 -31 8.6%
86 Chiba Japan 2.68 106 14.4%
87 Frankfurt Germany 2.64 -7 9.2%
88 Stockholm Sweden 2.60 10.1%
89 Lima Peru 2.54 -11 17.5%
90 Da Nang Vietnam 2.51 72 44.0%
91 Batam Indonesia 2.49 20 27.8%
92 Nice France 2.47 -17 10.7%
93 Fukuoka Japan 2.44 104 24.6%
94 Abu Dhabi UAE 2.40 12 14.7%
95 Jeju South Korea 2.35 -8 -6.2%
96 Porto Portugal 2.34 22 11.7%
97 Rhodes Greece 2.34 -11 10.6%
98 Rio de Janeiro Brazil 2.28 -7 3.6%
99 Krabi Thailand 2.26 -5 12.7%
100 Bangalore India 2.24 83 50.6%

It’s also worth noting that based on the data collected into 2019, London was projected to continue its downward trend, bringing it to 5th spot—mostly due to complications brought on by Brexit and associated visa restrictions.

Trending: Indian and Japanese Cities Take Flight

Most of the dramatic shifts in city travel patterns are happening below the top 10. Asian hot spots are gaining steam and swiftly making their way up the top 100 rankings, signaling a shift in global preferences before lockdowns began.

Take Japan for instance. The five Japanese cities in the top 100 rose by 352 places collectively since 2013. The country’s top city destinations have had an average traveler growth rate of 17.8% from 2017 to 2019. In light of Japan’s impeccable containment of COVID-19, that trend may be compounded in coming years.

Japan’s dramatic rise in the ranks is echoed by India. India’s seven cities in the top 100 have risen 229 places — with a huge average growth rate of 44.6% from 2017 to 2019. Some of that growth is the result of lifestyle tourism, particularly in the case of Delhi, which saw its traveler rate grow by 49.6% since 2017.

Prior to the pandemic, Delhi was expected to continue that steady growth and experience a leap in rank, which currently sits at 11.

With health and wellness tourism on the rise, India has gained noteworthy attention for its yoga retreats and Ayurveda practices. Delhi’s connectivity to important locations across North India has boosted inbound arrivals to the city.

— Euromonitor International

Where in the World? Asia and Europe

Asia continues to lead all other regions, followed by Europe.

Since 2013, the number of Asian cities in the top 100 has grown from 34 to 43. Asian outbound travel has also seen a surge, spurring a rise in travel campaigns from Europe and the Americas that target Asian travelers on social media platforms like WeChat.

Why the Ranking Matters: In Travel, They Trust

Before the pandemic, tourism was considered a leading and resilient economic sector.

In 2019, 1.5 billion people traveled internationally. By 2030, that number could grow to 1.8 billion—and many cities could become increasingly reliant on tourist dollars.

According to the World Travel and Tourism Council, cities like Macau, Cancun, Marrakech, and Las Vegas are all heavily dependent on direct tourism and travel contributions to their respective GDPs. As of 2018, more than 50% of Macau’s GDP was derived directly from tourism, while almost half of Cancun’s GDP relies on travelers.

Countries like India and the Philippines are also particularly reliant on travel. India has a related job-to-tourist ratio of two jobs for every tourist and the Philippines has a ratio of one job per tourist.

By 2030, there could be 1.8 billion tourists – just over one in five persons in the world–traveling around the globe.

United Nations World Tourism Organization

Where to Next? Wheels Up

Millions of travelers don’t lie — the siren call of cities is undeniable. In turn, those tourists have become a major lifeforce for many of these destinations, and a boon for the international travel industry.

The pandemic has thrown these dynamics off course, with much of the world grinding to a halt since early 2020. However, it’s only a matter of time before the world opens back up again.

Although travel may look very different in the future, wanderlust doesn’t simply disappear. In fact, frustrated travelers — including digital nomads and remote workers — may have all the more reason to run away.

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The post The 100 Most Popular City Destinations appeared first on Visual Capitalist.

Strive to Dominate


This post is by Mauricio Prieto from Travel Tech Essentialist - Medium

Better to strive to dominate your industry than to complain about Google’s dominant position in search.

I’ve written in the past on how OTAs regularly blame Google as a reason for their underperformance: OTAs and Google and The Selective Scapegoating of Google. In recent months, a few influential German travel start-ups have also publicly stood up against Google’s so-called abusive and dominant practices.

In this post, I raise some questions to understand if complaining companies are practicing what they preach, and drive the point that it would serve us all better to focus more on how we can build a unique product and customer experience so that we don’t have to resort to complaining about Google.

According to a German newspaper report, GetYourGuide, Trivago , Flixbus, Omio and HomeToGo filed an antitrust complaint against Google, accusing it of stealing content and data: “Google is abusing its search dominance by asserting its data standards on advertising partners, extracting their data and using it to promote its own products at a cheaper rate. To achieve this, it forces its partners to sign non-disclosure agreements [NDAs] to access their products and data” (Competition Policy International).

Due to the monopoly Google has in horizontal search, just by having this kind of access, they’re so top of the funnel that they theoretically can go into any vertical. And with the power of their monopoly they can turn on products there without doing any prior investment in it. Anyone else has to work a lot on SEO strategies and these kind of things to slowly go up in the ranking but Google can just snap its fingers and say, basically, tomorrow I want to have a product. — Patrick Andrae, CEO and co-founder of HomeToGo. Source.

It is a tough sell to pretend that the good old days of SEO and the 10 blue links were better for consumers than what they get today. When a business relies on a third party continuing to send them free traffic, that’s a good time to rethink the business model. Google does not have the obligation to be sending free traffic to whoever is able to best crack the SEO code or to showcase businesses who are not unique enough to convince their customers to visit them directly.

As Ben Thomson points out, Amazon could have also blamed Google for trying to favor its own shopping channel results. But instead, Amazon worked at improving its product and customer experience from search to delivery to become the aggregator and the go-to platform for product search. Amazon focused on being better than Google in its industry, not on calling for regulatory help.

More product searches start on Amazon than Google, not because Amazon spent its energy complaining about Google favoring its own shopping results, but because Amazon went out and delivered a better experience for users. — Ben Thompson, Stratechery (Nov 2019)

Back in April, the CEOs of 8 German travel companies (Dreamlines, FlixBus, GetYourGuide, Homelike, HomeToGo, Omio, Tourlane and Trivago), wrote a letter to Google requesting a restructuring (cancelation/reduction/delay) of ad payments linked to search campaigns that ended up generating travel bookings that were subsequently canceled by customers as a result of the Covid crisis. The companies asked Google to “share the burden”.

“We’re absolutely not satisfied with the support Google offered during this ongoing crisis.” Patrick Andrae, HomeToGo’s co-founder and CEO (CNBC)

“Trivago has missed a collaborative spirit from Google.” Axel Hefer, CEO Trivago (CNBC)

Two tweets from Alex Bainbridge and ClickMallorca made me wonder if these companies are asking from Google to abide by a set of business practices and behaviors that they themselves don’t adopt.

Twitter

Are GetYourGuide, Trivago, HomeToGo and others (which have raised a total of $2.1 billion to date, not including Trivago’s IPO nor its sale to Expedia) extending towards their own advertisers and suppliers the level of generosity and flexibility that they demand from Google?

Do these companies NOT use their dominant positions towards their suppliers to access their products and data to gain better SEO and SEM positioning?

Are these startups acting with the sense of solidarity and collaboration that they demand of Google?

I don’t really have answers to these questions (if you do, I’d love to hear from you), but at least some of their business practices don’t seem to be consistent with the spirit of their letter against Google. Let’s briefly take some examples from GetYourGuide.

If I search for Casa Batlló in Google, the SERP displays a prime positioned window to purchase tickets. The ticket seller is GetYourGuide. GetYourGuide is certainly getting an extremely valuable distribution agreement and visibility in Google. The fact that GetYourGuide is getting consistently such favorable presence above the fold could be argued by some as anti-competitive as these listings tend to favor few providers (GetYourGuide among them).

Google Booking window in the Search Engine Result Page of a “Casa Batlló” search

If we are talking about fairness and solidarity, why isn’t Casa Batlló showing up as the default booking option?

Is it “fair” towards Casa Batlló to have to pay a commission to GetYourGuide for this transaction? After all, I searched for Casa Batlló and would in all likelihood want to book direct if that option had been provided.

Not only GetYourGuide appear in a prime position as the official ticket seller of Casa Batlló, it also appearing both in SEO and in paid search when I search search in Google using the keyword “Casa Batlló”:

GetYourGuide is also present in SEO and in Paid Search for Casa Batlló keywords

Does all this mean that GetYourGuide is using its dominant position in making its partners (such as Casa Batlló) sign agreements to allow GetYourGuide to bid for its brand and access their products and data? From GetYourGuide’s Supplier Terms and Conditions, it makes it clear that suppliers give GetYourGuide a pretty open-ended access to use and license its content as needed.

GetYourGuide Terms and Conditions

For online marketing and PPC advertising, suppliers have to agree that GetYourGuide can use the supplier’s name for mail marketing and PPC advertising. But suppliers cannot use the GetYourGuide brand for the same purpose. This could also be interpreted by some as GetYourGuide using its dominant position.

GetYourGuide Terms and Conditions

I have heard that GetYourGuide suppliers are having to pay commissions of up to 30% to be distributed in the platform. Quite steep. Is getYourGuide reducing commissions to suppliers as a good faith gesture given the current crisis?

Just to be clear. I am not criticizing GetYourGuide’s or any of the German companies’ business practices. Good for them to occupy as much digital real estate as possible in Google’s results pages. Good for them to close distribution agreements that are aligned with their business and consumer interests. I don’t even have an issue with them charging high commissions. If they’re “too” high, the market and/or other competitors will come in with better or cheaper options. My issue is the knee jerk reaction that many companies have to point their finger at Google and call for government intervention as soon as it is convenient for their business interests. Blaming Google is opportunistic and does not add value to the business. And actually, it seems like the companies that most complain about Google’s dominant position are the ones that have the most dominant positions in Google.

The media and some in the industry have been talking about a Google monopoly in travel since the search company bought ITA in 2010. Since then, Booking Holdings (then called Priceline Group), probably the most Google-dependent competitor in the online travel industry, has gone from a market cap of $9 billion in July 2010 to $78 billion today (in the midst of a worldwide pandemic that has decimated the travel industry). 9X in 10 years. Not bad. Since 2010, billions of dollars in value has been created by online travel companies and billions of VC money has flowed to thousands of travel startups. There has been tremendous innovation in all travel categories. These signals don’t seem to be consistent with a monopolistic environment. They point to plenty of opportunities for companies that have learned to work effectively and profitably with Google, and for companies that have managed to bypass Google in building value.

If a company complains that Google has too much power, it might mean that it’s spending lots of money on Google and/or has ended up overly relying on Google for gaining marketshare and/or is short on innovation. This is on them, not on Google. Others in the travel and mobility industry have succeeded in not depending on Google precisely because they’ve focused their energy in building a unique product and customer experience that consumers go to directly without needing to take a prior stop at Google. And it’s not only the well known companies like Uber, Airbnb and HotelTonight that have succeeded in not depending on Google. It’s also smaller (for the time being) players such as Autoura (AI powered in-destination travel experiences) that are seeking to control their own destiny and using Google opportunistically and not by default.

In today’s digital age where all players are one click away, a company becomes dominant when it builds a product or service that is head and shoulders above its competitors’. Getting to a dominant position is what startups and companies of all sizes should strive for. As Ben Thompson from points out, anticompetitive behavior is often “simply another name for ‘driving differentiation’, which no one should want to be illegal for any company that is not in a dominant position; it is the potential to make outsized profits that drives innovation”

Similarly, companies strive to become a monopoly by building a unique product. In his book Zero to One, Peter Thiel puts it as follows: “All happy companies are different: each one earns a monopoly by solving a unique problem. All failed companies are the same: they failed to escape competition.”

It would be in the best interest of some travel companies to take a cue on Google’s approach to reaching a dominant position. By never stopping to innovate.

At the end of the day, Google has the dominant position in its value chain largely by providing a better product. Search was better to start, but Google didn’t rest on its laurels: it made search better on mobile in particular with these sorts of modules, and while users could download another app or go to a different URL, they simply don’t want to. — Ben Thompson, Stratechery.

Google earned its way into becoming a dominant platform in search. Amazon earned its way into becoming a dominant platform in retail. 24 years after the launch of the first online travel companies, there is still no dominant multi-product platform in travel. If there is space for a dominant travel platform, and no travel company fills the role, maybe Google or Amazon will take over. But this does not necessarily mean that it would result in less innovation and opportunities, compared to a scenario where a travel industry player would become the dominant platform.

We all should be vigilant of potential monopolies and of Google expanding a natural monopoly in search into neighboring sectors such as travel, where the monopoly may not be natural. But we should also be vigilant of regulation called by competitors against products that have proved to be “too compelling” for customers.

Unlike traditional monopolies, it is hard to argue that Google’s product isn’t getting better. Sure, OTAs need to pay to play on the hotel module, but the hotel module is a genuine improvement over 10 blue links. The same can be said of the other areas where Google gives answers instead of options. I absolutely get the argument that this might be an unfair extension of Google’s search dominance, but the possibility of stifling innovation, both directly and also its incentives, are worth consideration. — Ben Thompson, Stratechery (Nov 2019)


Strive to Dominate was originally published in Travel Tech Essentialist on Medium, where people are continuing the conversation by highlighting and responding to this story.

Omio takes $100M to shuttle through the coronavirus crisis


This post is by Natasha Lomas from Fundings & Exits – TechCrunch

Multimodal travel platform Omio (formerly GoEuro) has raised $100M in late stage funding to help see its business through the coronavirus crisis. It also says it’s eyeing potential M&A opportunities within the hard-hit sector.

New and existing investors in the Berlin -based startup participated in the late stage convertible note, although omio isn’t disclosing any new names. Among the list of returning investors are: Temasek, Kinnevik, Goldman Sachs, NEA and Kleiner Perkins. Omio’s business has now pulled in around $400M in total since being founded back in 2013 — with the prior raise being a $150M round back in 2018.

In a supporting statement on the latest raise, Georgi Ganev, CEO of Kinnevik, said: “We are very impressed how fast and effective Omio adapted to such an unprecedented crisis for the global travel industry. The management team has delivered quickly and we can see the robustness of the business model which is well diversified across markets and transport modes. We are looking forward to supporting Omio on its way to become the go-to destination for travellers across the world.”

While COVID-19 has thrown up major headwinds to global tourism and travel — with foreign trips discouraged by specific government quarantine requirements, and the overarching requirement for people to maintain social distancing meaning certain types of holidays or activities are less attractive or even feasible, Omio is nonetheless sounding upbeat — reporting a partial recovery in bookings this summer in Europe.

In Germany and France it says bookings are above 50% of the pre-COVID-19 level at this point, despite only “marginal” marketing spend over the crisis period.

Its business is likely better positioned than some in the travel space to adapt to changes in how people are moving around and holidaying, given it caters to multiple modes of transport. The travel aggregator platform spans flights, rail, buses and even ferry routes, allowing users to quickly compare different modes of transport for their planned journey.

More recently Omio has added car sharing and car rentals to its platform, including via a partnership with rentalcars.com. So as travellers in Europe have adapted to living with COVID-19 — perhaps opting to take more local trips and/or avoiding mass transit when they go on holiday — it’s in a strong position to cater to changing demand through its partnerships with ground transportation networks and providers.

“That diversification in terms of not depending on a single mode of transport has really helped the business come back much stronger, because we’re not depending on — for example — air or bus,” CEO and founder Naren Shaam tells TechCrunch. “The diversification has helped us.”

“People will travel a lot more to smaller regions, explore the countryside a little more,” he predicts, suggesting the current dilution of travel focus it’s seeing — away from usual tourist hotspot destinations in favor of a broader, more rural mix of places — augurs a wider shift to more a diversified, more sustainable type of travel being here to stay.

“It’s not longer just airport to airport travel,” he notes. “People are traveling to where they want to go — and it’s a lot more distributed across geographies, where people want to explore. A platform like ours can accelerate this behaviour because we serve, not just flights, but trains, buses, even ferries etc, you can actually reach any destination with us.”

Direct booking via Omio’s platform is possible where it has partner agreements in place (so not universally across all routes, though it may still be able to offer route planning info).

Its multimodal booking mix extends to 37 countries in Europe and North America — where it launched at the start of this year. Last year it acquired Rome2Rio, bulking out its global flight and transport planning inventory. The grand vision is “all transport, end to end, in a single product”, as Shaam puts it — although executing on that means continuing to build out partnerships and integrations across its market footprint. 

Asked whether the new funding will give Omio enough headroom to see it through the current coronavirus crisis, Shaam tells TechCrunch: “The unknown unknown is how long the crisis lasts. But as we can see if the crisis lasts a couple of years we will make it through that.”

He says the raise will help the business come out of the crisis “stronger” — by enabling Omio to spend on adapting its product to meet changing consumer demand, such as the shift to ground transportation. “All of those things we can use these capital to shape the future of how the travel industry actually interacts with consumers,” he suggests.

Another shift in the industry that’s been triggered by the coronavirus relates to consumer expectations around information. In short, people expect a lot more travel intel up front.

“We have hypotheses on what comes back [post-crisis]. I think travel will be a lot more information centric, especially coming out of COVID-19. Customers will seek clarity in the near term around basic information around what regions can I travel to, do I need to quarantine, do I need to wear a mask inside the train etc,” he says.

“But that’ll drive a type of consumer behavior where they are seeking more information and companies will need to provide this information to satisfy the consumer needs of the future. Because consumers are getting used to having relevant information at the right point in time. So it’s not a data dump of all information… it’s when I get to the train station, what do I need to do?

“Each of those is almost hyperlocal in terms of information and that’s going to drive a change in consumer behaviour.”

Omio’s initial response to this need for more information up front was the launch of a hub — called the Open Travel Index — where users can look up information on restrictions related to specific destinations to help them plan their journey.

However he admits it’s a struggle to keep up with requirements that can switch over night (in one recent example, the UK added France to a list of countries from which returning travellers must self quarantine for two weeks — leading to a mad dash by scores of holidaymakers trying to beat a 4am deadline to get back on UK soil).

“This is a product we launched about a month and a half ago that tells you, if you’re based in the UK, where you can go in Europe,” he says. “We need to update it faster because information’s changing very, very quickly — so it’s on us now to figure out how to keep up with the constant changes of information.”

Discussing other COVID-19 changes, Shaam points to the shift to apps that’s being accelerated by the public health crisis — a trend that’s being replicated in multiple industries of course, not just travel.

“More than half of the ground transport industry was booked at a kiosk at a station [before COVID-19]. So this will drive a clear change with people uncomfortable touching a kiosk button,” he adds, arguing that that shift will help create better consumer products in the sector.

“If you imagine the kind of consumer products that the app/web world has created you can imagine that should come to the consumer experiences in travel,” he suggests. “So these are the things, I think, that will come in terms of consumer behavior and it’s up to us to make sure that we lead that change as a company.”

“We’re investing quite heavily in some of the other shifts that we’re seeing — in terms of days to departure, flexibility of fares, more insurance type products so you can cancel,” he adds. “We’re also trying to help customers in terms of whether they can go.

“We’re investing heavily in routing so you can connect modes of transport, not just flights, so you can travel longer distances with just trains. And we’re also in talks with all our suppliers to say hey, how can we help you come back — because not all suppliers are state monopolies. There’s a lot of small, medium suppliers on our product and we want to bring them back as well so we’re investing there as well.”

On M&A, Shaam says growth via acquisition is “definitely on the radar for us”. Though he also says it’s not top of the priority list right now.

“We’ve actively got our ears out. More so now, going forward, than looking back — because the last four months, imagine what we went through as a travel company, I just wanted to stablize that situation and bring us to a stable position,” he says.

“We are still in COVID-19. The situation’s not yet over, so our primary goal coming out of this is very much investing in the shifts in consumer behavior in our core product… Any M&A acquisitions we’ll do is more opportunistic, based on [factors like] pricing and what’s happening in the industry.

“But more of our capital and my time and everything will go a lot more to build the future of transport. Because that’s going to change so much more for so many millions of consumers that use our product today.”

There is still plenty of work that can be done on Omio’s core proposition — aka, linking up natural travel search for consumers by knitting together a diverse mix and range of service providers in a way that shrinks the strain of travel planning, and building out support for even more multifaceted trips people might wish to take in future.

“No one brings the natural search for consumers. Consumers just want to go London to Portsmouth. They don’t say ‘London Portsmouth train’. They do that today because that’s what the industry forces them to do — so by enabling this core product to work where you can search any modes of transport, anywhere in Europe, one click to buy, everything is a simple, mobile ticket, and you use the whole product on the app — that’s the big driver for the industry,” Shaam adds.

“On top of that you’ve got shifts towards ground transport, shifts towards app, shifts towards sustainability, which is a big topic — even pre-COVID-19 — that we can actually help drive even more change coming out of this. These are the bigger opportunities for us.”

Uncertainty clearly remains a constant for the travel sector now that COVID-19 has become a terrible ‘new normal’. So even with an unexpected summer travel bump in Europe it remains to be seen what will happen in the coming months as the region moves from summer to winter.

“In general the overall business outlook we’re taking is purely something of more caution,” says Shaam. “We just don’t know. Anything at all with respect to COVID-19, no one knows, basically. I’ve seen a number of reports in the industry but no one really knows. So in general our outlook is one of caution. And that’s why we were surprised in our uptick already through the summer. We didn’t even expect that kind of growth with near zero marketing spend levels.”

“We’ll adapt,” he adds. “The business is high variable costs so we can scale up and down fairly easily, so it’s asset light and these things help us adapt. And let’s see what happens in the winter.”

Over in the US — where Omio happened to launch slightly ahead of the COVID-19 crisis — he says it’s been a very different story, with no bookings bump. “No surprise, given the situation there,” he says, emphasizing the importance of government interventions to help control the spread of the virus.

“Governments play a very important role here. Europe has done a superior job compared to a lot of other regions in the world… But entire economies [in the region] depend on tourism,” he says. “Hopefully entire [European] countries shouldn’t go into shutdowns again because the systems are strong enough to identify local spike in cases and they ring fence it very quickly and can act on it. It’s the same as us as a company. If there’s a second wave we know how to react because we’ve gone through this horrible phrase one… So using those learnings and applying them quickly I think will help stabilize the industry as a whole.”

Today’s Perfect Tourism Campaign: Send Your Virtual Scream To Iceland


This post is by n Rohit n from Influential Marketing

There are many things these days that might make you want to scream out loud – but it’s not always easy to find a place to do it. Now, in a timely new campaign for Iceland tourism, you can send your most heartfelt scream to them and the Icelanders will release that scream in nature for you. The campaign is called “Looks Like You Need Iceland” and it’s a perfect way to remind people about the therapeutic effects of a scream but also of being out in a remote place far from others. While people may not be ready or able to book their next holiday right now, this campaign will get people dreaming of making Iceland their next destination when they finally do travel again.

Today’s Perfect Tourism Campaign: Send Your Virtual Scream To Iceland


This post is by n Rohit n from Influential Marketing

There are many things these days that might make you want to scream out loud – but it’s not always easy to find a place to do it. Now, in a timely new campaign for Iceland tourism, you can send your most heartfelt scream to them and the Icelanders will release that scream in nature for you. The campaign is called “Looks Like You Need Iceland” and it’s a perfect way to remind people about the therapeutic effects of a scream but also of being out in a remote place far from others. While people may not be ready or able to book their next holiday right now, this campaign will get people dreaming of making Iceland their next destination when they finally do travel again.