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Travel Tech Insights from July, 2019

An Expedia study found that 69% of travelers turn to a search engine when starting to think about a trip, ranking even higher than OTAs and travel websites. A digital travel touchpoint may include searches on Google Maps, of flights and accommodation options, things to do, places to visit, Youtube videos and pictures saved on Pinterest that may be found via Google.

And in the July newsletter, we shared an article from Think with Google mentioning searches for experiences is three times higher than hotel searches and eight times higher than air searches in the 12 weeks prior to a trip. Is Google not a travel monopoly, really? As written by Peter Thiel in the book Zero to One, monopolists tend to do whatever they can to conceal their monopoly and keep their profits as unmolested as possible.

Is Google only a search engine or also an advertising company? Why does this question matter? Let's suppose Google control 70% of the search engine market, but if they frame themselves as just a company in the global advertising market, claiming their profits come from search advertising, it may represent a small fraction of the whole industry, maybe 1%. And a similar logic applies to Facebook. Will Facebook capitalize on the cryptocurrency Libra for travel payments? Currently, Libra is targeting developing markets that totalize over 1.7 billion unbanked individuals who couldn't make a reservation, for example.

Despite monopoly monopolies tend to profit at the expense of the rest of the industry, it's not necessarily a pathology since the real world doesn't operate on a binary horizon competition versus monopoly. Big monopolies, in the end, can solve unique problems and bring benefits on a large scale. Would booking tech and mobile solutions exist without smartphones? Would influencers exist without social media?

Following the Facebook and Google scaling up from their initial core businesses, will the big tech companies expand their monopolies to the travel industry? Platforms don't go naked into a new industry, and the acquisition of small travel tech players is a strong sign they intend to come into travel.

As shown by the emerging regulations for OTAs and short-term rentals, new regulations may come for the abusive market power and censorship that proliferated in the last years. By observing the recent discussions on the US Senate and restrictions to contents out of the political correctness sphere on Facebook, YouTube, Google, and Instagram, how would travelers and influencers approach sensitive topics like safety, criminality, and terrorism, for example? Innovation also brings new problems, challenges, and regulations.

Apart from the thoughts on monopoly, we gather the highlights of July in travel tech according to the following topics:

• Tours & Activities: Klook expanding to Europe and the importance of T&A platforms maximize the exposure of their partners' inventories.
  
  
• Emerging markets: travel startups are booming in India, and highlights from Brazil, Myanmar and mobile booking in the Middle East.
  
  
• Startups: highlights on funding, rumours of a toxic culture at Culture Trip and the dilemma of travel startups of thinking globally from day one or not.
  
  

Tours & Activities

Klook is expanding to Europe to compete with GetYourGuide and the importance to expose tour operators inventories on tours & activities platforms.


A nice question brought by Voyager HQ presenting the perspectives from the 2019 Travel Disruption Summit: are the booking companies missing to solve the problem of exposing tour operators' inventories to the right customer at the right time while competing against each other?

Klook will expand its coverage to match GetYourGuide in every major European city by the end of 2019, which will intensify the competition between the two startups. Covering more than 300 destinations, 80% of Klook's users are in Asia.


Emerging Markets

The travel industry is booming in emerging markets and in this section, we share highlights about travel startups from India, Singapore, Myanmar, Brazil and mobile bookings in the Middle East.

Indian international travel market is estimated at 20-25 million coming from an emerging middle class traveling every year, and in the next years, it can reach 80-100 million. India is still a very large market but still unorganized, and local travelers seek value for money so as to assistance for international trips for bookings, accommodations and tedious visa applications.

Top travel and tourism industry leaders in India have asked the government to focus on better infrastructure for connectivity and lower taxation in the sector in the run-up to the annual budget.

Between 2017 and 2019, RailYatri has grown dramatically riding on increased long-distance travel in Inda, and the rising adoption of internet services and apps. Their platform has also added features including taxi booking, ticket purchases, and meals.

Bangalore-based UUO Innovation has been backed by Airbus India to develop a travel pillow startup, aiming to provide solutions that ease the pain of long-haul flights.

Singapore-based Travelstop is backed with $3 million in funding by the venture capital firm Accel, investing in corporate travel and expense management in Asia for the first time. And to simplify travel bookings and offer affordable options, the company partnered with the OTA Traveloka.

India-based startup Pickyourtrail is partnering with Tourism Australia to offer its users exclusive itineraries and activities from the DMO's "UnDiscover Australia" initiative.

Brazilian startup Instaviagem raised $500K to accelerate its business platform that pioneered "surprise trips" in Brazil.

Indian online travel company Yatra is acquired by Ebix through a $337.8 million merger process.

Myanmar-based OTA FlyMya wins the WiT Japan & North Asia Startup Pitch, held in Tokyo by Amadeus.

The digital spend in the Middle East's travel sector is showing huge potential with mobile bookings becoming popular across the biggest cities in the region. Hotel operators and tourism boards are aligning themselves alongside OTAs.


Startups

The highlights on funds, Setoo innovating on insurance, European startups breaking records, rumours of a toxic culture at Culture Trip and a tricky question: do travel startups need to think globally from day one?

Amadeus will again sponsor the Startup Showcase and Competition by Travel Forward during the WTM 2019, which will happen in London on November 4-6.

Japan's largest airline All Nippon Airways will be joining Plug and Play on a three-year partnership aiming to build connections with travel startups.

Q2 2019 was a record-breaking quarter for European startups, a sign the Old Continent is breeding unicorns such as GetYourGuide that announced a €433 million round in May.

Amsterdam-based Bohemian Birds has raised €500K to develop its product, marketing, and sales. The company aims to become the market leader in incentive and student travel in Benelux.

UK-based Setoo believes that insurance should not only protect but also delight customers by tailoring it into the customer journey of travelers instead of the one-size-fits-all that deters from buying adequate protection policies.

The short term rental management company GuestyReady was the only travel startup listed in the top 10 of UK's top 100 Startups index running since 2014 to showcase new businesses demonstrating innovation, economic impact, solid financials, and scalability.

France-based property management platform HostnFly has raised $10 millionto grow its vacation rental service for hosts.

Roomer, Splitty, Hotelmize, Pruvo, WeTrip, TripActions, TravelPerk and Arbitrip are the Israeli startups working on booking accommodations and a business trip for less.

TravelPerk has raised $60 million in further Series C funding that will be used for product innovation and to expand into Europe, and the company recently announced a service to make changing travel plans easier..

Do travel startups need to think global from day one? Consumer brands are entering travel and investors have been triggered to support such ventures as a lot of friction points remain in the travel industry.

Would your startup overcome all the challenges with a $100 million funding? High turnover and constant changes in strategic directions were described by former Culture Trip's staff members painting a picture different of a dream team.


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

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