This is Travelabs Insights — a monthly summary of the most important news from the travel tech industry around the globe, picked up for you by the Travelabs team. You can see what happened in travel tech world previously in our Insights Archive, check out upcoming travel tech events and currently open programs in startup accelerators on our website.


Travel Tech Insights from 2019

Along with our newsletters in 2019, we have written several times about the importance of understanding the customer journey in the travel industry since travelers search across multiple platforms before taking any final decision, giving priority to search engines. A digital touchpoint must consider searches for maps and routes, pictures on Pinterest, videos on Youtube, blogs, travel tips, and more. According to Google's study, searches for experiences are three times higher than hotel searches and eight times higher than airline searches during the 12 weeks prior to a trip.

Observing Facebook and Google moving to the travel industry during 2019, how will the big tech companies impact the travel scene? Will travel contents be vulnerable to restrictions from the big tech platforms as we have been seeing on politics, for example? And what about the promotion of travel services for operators and startups?

While Facebook and Instagram have reached the status of big channels for travel advertising, competition for travel bookings has become more intense as Google, Airbnb, Amazon, and more startups show up in the travel industry disputing for the travelers' attention across their search and consumption journey.

In parallel with the travel services developing in the digital ecosystem, cybercrimes reveal to be one of the greatest threats for the industry as criminals feel attracted by the billions of dollars moved daily by the purchases. The fragmented purchase journeys open weak links in the travel industry and demand real-time fraud protection across all the customer journey.

2020 is coming, so how will the travel industry look like in the next decade? Some of the biggest developments in tours & activities have come from Asia, following the economic growth and the increasing demand for overseas holidays, as well as the desire of young Asian travelers to travel independently.

On the last newsletter of the year, we have selected the most important news in travel tech for 2019, featuring the following segments:

• Tours & Activities: Europe and Asia were the epicenters for this segment in 2019, with GetYourGuide and Klook receiving the biggest investment rounds.
  
  
• OTAs: New business models, expanding beyond selling hotel reservations and the arrival of Google in the travel industry.
  
  
• Airlines, Transportation & Cruise: the challenge of understanding the customer journey from planning until the way back home.
  
  
• Airbnb: acquisitions in 2019, venture in tours & activities, and the ecosystem of startups created in the short-rental landscape.
  
  
• Investments & Funding: the segments that received more funds in the travel industry during 2019.
  
  

Tours & Activities

GetYourGuide and Klook have received big investment rounds in 2019, and the tour & activities segment consolidated as an important segment in the travel industry.

In 2019, GetYourGuide has raised $484 million that allows the company to expand its inventories, plan acquisitions ahead and develop solutions. One of the GYG's novelty this year was the partnership with Viasat Inc. to offer excursions for in-flight passengers. However, we must remember that more than $1.8 billion was raised on tours & activities since 2017, mostly for startups from Europe and Asia. GetYourGuide started to bring in-flight excursions.

In addition to the acquisition of Bokun in 2018, TripAdvisor has expanded its non-hotel segments to 40% of its mix, including the acquisition of the restaurant reservation platform Restorando.

ITB Berlin 2019 devoted a platform for tours & activities for the first time, considering travelers talk and remember what they did during their holidays as the most important. Business models in this segment require partnerships among operators, destinations, tech suppliers, that brings new commercial possibilities for everyone and consider the spontaneous purchase decision of travelers.

In 2019, Klook celebrated its 5th anniversary, pushing growth to expand offerings for its Asian customer base and bring Westerner travelers to Asia and has started to expand its coverage in the major European cities. Growth was observed on bookings coming from the UK, France, and the Netherlands.

Booking.com has launched tours & activities options that enable customers to book excursions on a standalone basis. A pilot has started in a couple of European cities and in Dubai, as part of a plan to cover 150 cities.


OTAs

OTAs have expanded beyond selling hotels and flights, and new business models are emerging according to local market needs.

OTAs have started their business models selling hotel reservations and have been diversifying to selling tours & activities, ridesharing, restaurants, food delivery, and more services according to the travelers' demands.

In 2019, Google has started a website for hotels with the possibility for travelers booking reservations accompanied by reviews, photos, and prices; including flights in some destinations.

The Argentinian OTA Despegar has invested heavily in mobile in 2019 to skip the economic crisis in its home market and expanded travel agency sales through consumer financing.

Indonesia's unicorn OTA Traveloka started its first steps out of Southeast Asia in 2019 through a partnership with the Indonesian tourism ministry and has moved to a lifestyle platform by introducing tours & activities, movies, spa, beauty, and food on its platform.

TripAdvisor Experiences & Dining revenues jumped from $25 million to $125 million in 2019 while the hotel revenues haven fallen short.

TripAdvisor has introduced a loyalty program, sponsored placement product, started to focus more on digital and integrated marketing while Booking has pushed to brand marketing as an alternative against Google moving to the travel industry.


Airlines, Transportation & Cruise

Airlines and cruise must pay attention to the customer journey from home to embarking, so as to the verticals where their services fit in.

Airlines must shift the mindset to become more relevant for travelers who are planning their trips, add more products and increase the frequency of demand. Since airlines compete with different verticals and industries, a question that comes for constructive opportunities is: What business are we in?

And for the cruise industry, engage with travelers requires from ship companies to understand the passengers' mindset considers everything from home until embarking.


Airbnb

Airbnb had advanced steps on acquisitions and on cross-listing and started to venture on tours and activities sector. And the bigger impact until now was opening doors for a new ecosystem of travel startups.

Since its consolidation, Airbnb has transformed the travel sector opening doors for a whole ecosystem of startups to attend the new demands generated along with the advancement of the short-rental industry. A novelty of Airbnb in 2019 was getting into the TV game, looking at building its own TV studio for documentaries, productions, and promotion.

In 2019, Airbnb has done acquisitions to broaden its offerings, buying Gaest in January for meetings and events, the same-day booking platform HotelTonight in March, and Urbandoor in August for short term corporate rental.

This year, the company had also started to venture in tours & activities launching Airbnb Adventures for multi-day tours. And a luxury inventory was built from the 2017 acquisition of Luxury Retreats.

In September, Airbnb started to cross-list Atlas Obscura's experiences to its own website to increase inventory supply and to become an end-to-end travel platform.

Airbnb booked 91 million room nights in the first quarter of 2019 and has received a large number of direct traffic to its website.


Investments & Funding

2019 was remarkable for funding to travel startups, in addition to the big rounds of GetYourGuide and Klook on tours and activities.

Lodging, private accommodation, ground transportation, tours & activities were some of the most significant areas of funding in 2019. And venture capitalists looked beyond the United States, investing strongly in the Asia Pacific.


With lots of love, yours truly,
Valentin Dombrovsky, Chief Alchemist at Travelabs,
Andre Fernandes and Travel Tech Newsletter Team


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