As I wait for the first of three flights that will bring me home from Fort Lauderdale to Singapore via Houston and San Francisco, I have downloaded the Timeshifter jetlag app, one of the startups that presented at the Phocuswright conference. It’s relatively easy to set up, I just hope it works because I cannot believe that in 2019, on the cusp of a new decade, we still haven’t solved jetlag.
This startup though is giving it a go and it has sleep experts and NASA scientists on its advisory board. At the Phocuswright conference, it was interesting to listen to the 24 startups who were all trying to use tech to solve travel problems.
From optimizing the lives of beach bums (Beachy) to solving connectivity on the road (Airalo) to helping suppliers sell even more insurance (Setoo), there was no shortage of ideas by passionate and ingenious entrepreneurs trying to change travel their way. One was even trying to build a supersonic aircraft because he feels (and he is right) that since-the Concorde bust, we haven’t reduced flying times. (See related article)
“Personally I have always believed we need to get round the world faster,” said Norris Tie of Exosonic. With a more than 24-hour journey ahead, I wish he would solve it faster.
Here are my key takeaways from the Phocuswright conference which was themed “Are we there yet?”.
1. Finding life after Google
Companies in the US that have depended on traffic from Google are finding their top search channel choked, and all are trying to navigate their way into a post-search world.
Steve Kaufer, founder and CEO of TripAdvisor, admitted to “a lot of challenges”. “The competitive landscape, when it becomes concentrated, becomes a burden on innovation. We have to build better products, better value proposition so that the next time you want to plan a trip, you come to us.”
It explains the transition Skyscanner is making from meta to marketplace, said Bryan Dove, CEO, Skyscanner, adding “it’s less about guessing what they (Google) are doing to do next but it’s our challenge and opportunity to ensure we offer enough value and product that they stay with us rather than go back to Google for the next search. We have to build something consumers will love.”
And maybe it’s me but did I detect a note of smugness in Glenn Fogel’s tone when the CEO of Booking Holdings, commenting on the same issue, said, “It’s a small channel for us, not anything we want to call out. The best way to make sure of strong results is to get people to come to us direct and give them the best service.”
Guillaume Teissonniere, General Counsel of eDreams IDIGEO, in his talk “The Case Against Google” called out the search giant for stifling innovation and for “sucking out the air from the travel funnel”. While he said regulation is coming, both in Europe and the US, he noted that “it’s a complex matter and will take time”.
Chamath Palihapitiya, CEO, Social Capital and Chairman, Virgin Galactic was even more blunt about it. In his interview with Brad Gertsner, Altimeter Capital, he said, “I don’t care what anyone says but Google is a monopoly. It’s a fabulous thing – great businesses are monopolies, you have pricing power, network effect, control of customers and repeatable profit.”
He sees the current state of SEO as a case of Google trying to figure out “as that 20-year window closes, what’s the next big step?”
“They are buying themselves more time and meanwhile, they make more profit while they throw more darts on the dartboard and the longer it takes them to find their second act, the more we are ….”
Commenting on travel and how Google was the largest player in travel, he said, “Your business strategy has to be different. If you haven’t figured out how to be unique, tough.”
2. Asia goes its own way with mobile and superapps
A panel on “Made In Asia: The Mobile Future” offered hope for a post-Google world and told the largely North American audience how Asia had moved onto a post-search and post-cash world.
Kei Shibata, CEO of LINE Travel.jp said the recent lackluster financial results of Expedia and TripAdvisor served as a wake-up call for many travel companies with high dependency on Google.
“You need to diversify your risk. The way it works on apps is different and they have to think where they can partner with superapps. If we had hung on in the Google ecosystem, it would have been a problem. That’s why we partnered with LINE,” Shibata said of the joint venture agreement his meta-search business has with the superapp, dominant in Japan.
Mieke De Schepper, executive vice president online travel and managing director APAC, Amadeus, said that superapps in Asia had their roots in these services – payments, messaging, ride hailing (all high frequency activities). “Indonesia was using messaging and group chats on Blackberry before WhatsApp. Superapps own top of the funnel and it is a good way of looking at customer acquisitions.”
Jay Shen, vice president of Trip.com Group and head of investment, Ctrip, said three factors were responsible for the rise of superapps in China – population, the smartphone and online payment systems. “I don’t have to carry my wallet anymore, I just use my smartphone.”
3. Beyond travel, capital and tech woes are top of mind
As with the Expedia conference in Las Vegas last week, there was a lot of soul-searching over the current state of the American economy and society. Palihapitiya, who made headlines when he quit Facebook in 2017, declaring that social media was ripping society apart, called the current market “an unproductive form of hyper-capitalism” and that there was too big a divide between company shareholders and company stakeholders (employees).
His sentiments were similar to Barry Diller’s comments made at the Expedia conference last week in Las Vegas when the chairman of Expedia Group said companies had to pay their employees fairer wages and to take responsibility to restore people’s hopes in the future.
Excess capital was leading to “weapons of economic destruction”, said Palihapitiya who’s confessed to “tremendous guilt” for the work he did at Facebook and he noted the pendulum needs to swing back. “Will we have the resolve to do it before the frustration erupts in violence, like in Hong Kong?”
Tech journalist Kara Swisher also called out the excessive funding going into a handful of companies. Commenting on WeWork, she said, “The world is awash with capital, funding people they shouldn’t fund and hurting people”.
She added, “The same with Lyft and Uber, I don’t see how the economics are feasible. What’s the end game? Price raises?”
Swisher, not known for mincing her words, also brought up OYO, saying, “Growth at all costs comes at a cost. Companies have to grow slowly. The judicious use of capital is the most important job of a CEO, when you have so much money, you just make mistakes.”
Greg O’Hara, executive chairman, Amex GBT and founder and senior managing director, Certares, also called out the valuation of TripActions, whose latest fund raise values it at $4 billion. This, he said, would mean an expected exit of $45 billion which is more than the valuation of all the travel management companies combined.
Since his acquisition of Amex GBT, he’s spent nearly $600m on overhauling the entire system and that it was by no means done with acquisitions, following its purchase of HRG in 2018. Certares now has $9 billion in assets under management in travel and he said he was interested in two areas – wellness and eco-adventure.
As for Swisher, the area she is most interested in is food tech, as it relates to climate change, which she called “the existential crisis of our age”.
4. Funnel no more, sphere it is – or is it the “connected trip”?
Back to travel – Tedd Evers, CEO of Triptuner, said the funnel had become a sphere where every transaction is just a point away and the distance has been blurred between inspiration and transaction. “We have been an inspiration startup for 10 years, inspiration has always been there, but it was perceived to be so far from the booking.”
Pointing to travel companies such as its parent company Ctrip and those in South-east Asia, Skyscanner’s Dove said, “We are seeing the way they have created daily frequency – the one-stop shop is quite illustrative of the way things have to go.”
Call it one-stop shop or the connected trip or the frictionless travel experience, travel brands are breaking down silos and flattening the whole travel process, and transformation is taking place at the two major OTA groups, Expedia and Booking Holdings.
Fogel, speaking about Booking’s longterm goal of delivering “the connected trip”, said he wanted Booking.com to be known for more than its accommodation – “not just hotels but one payment platform and we can fix it if things go wrong. We have in Tel Aviv, AI and machine learning geniuses to create personalized offers” across the value chain.”
And its Genius loyalty programme is what will tie it together across the group. Steve Hafner, CEO of KAYAK, and who also oversees Open Table, called Genius its “Amazon Prime” moment.
5. Rundle or Superapps, “travel companies need to double down”
Swisher, speaking about how big tech was coming into travel, said “travel companies really have to double down” much as Disney has with its new Disney Plus service. She called Disney Plus, its subscription service for entertainment content, “the moment when Disney finally arrives in the digital age” after 25 years of disasters.
She said that it’d be interesting to see how travel brands apply the “Recurring Revenue Bundle” (Rundle) idea – an idea that goes beyond subscriptions but getting customers to pay for a bundle of services. “The relationship between companies and consumers is changing, it doesn’t just stop at one thing. What would you allow Apple to sell you? Or Nike? Or Amazon Prime?”
Airbnb, she said, was already entering the Rundle era – “why wouldn’t you trust Airbnb to give you a flight?”
Of course, this is a trend already playing out in Asia with the superapps and brands like Traveloka and Trip.com which have led the way in offering a plethora of services in one mobile interface.
Noting the blurring of lines – Airbnb moving into hotels, hotels into rentals, Disney into digital delivery of entertainment, Swisher said, “As we move into the next digital era – we are on another cusp with quantum computing, AI, it will depend on who can execute best. It will be amazing to consumers, disruptive to companies.”
6. Startups still fighting the good fight
Notwithstanding the consolidation of capital in too few hands, and the challenges facing customer acquisition, it was good to see entrepreneurs still fighting the good fight with their ideas and passion. This year’s 24 entries in the Summit competition were reflective of current trends prevailing in the market from corporate travel to the meetings market, to payments.
Chris Hemmeter of Thayer Ventures and Miriam Moscovici of BCD Travel, who were dragons during the competition, were impressed with the quality of the startups. Hemmeter called insurance and fintech sexy and he believes that when it comes to the “connected trip”, hospitality companies and businesses like Uplift, which allows travellers to pay over time and in which Thayer has an investment) of cracking it.
Moscovici said lots of changes were taking place in corporate travel particularly the growing pressure on sustainability, with corporations pushing TMCs to implement more environmentally-friendly policies. “Imagine if 10 large corporations could have their own Paris Agreement and introduce policies such as having executives fly only on fuel-efficient aircraft with 30% reductions in emissions.”
Consider the winners. In the Startup category, the runner-up was Setoo, “turning insurance into products consumers love” while the winner was Airola, who wants to be the Spotify of connectivity with its eSIM roaming service.
In the Emerging category, the runner-up was Beachy, which allows beach lovers to book their beach chairs and order their drinks without having to get up from their spot, while the winner was Troop Travel, which uses big data and machine learning to help companies find the best locations to meet.
Winner of the $100,000 General Catalyst Award was 30secondstofly, a new gen tech tool for travel management companies while the OAG Award for Innovation went to Exosonic. Yes, let’s keep the dream of faster flight alive.
I can’t wait to shift time back to tropical shores.