Skift Breaking News Blog

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

Travel Technology

Travel Tech Firm RateGain’s Business Buoyed by Return of Tourists

1 hour ago

As more hotels strive to optimize costs, improve return on investment and reduce cost of customer acquisition by generating direct revenue through metasearch platforms, travel technology firm RateGain continues to see considerable demand for its metasearch and digital marketing offerings, Bhanu Chopra, Rategain’s founder and chairman, said.

“We continue to see little or no impact on the overall travel industry as well as our business due to the ongoing increase in inflation, talk about rising interest rates or the ongoing Ukraine conflict,” Chopra said.

Marketing technology has emerged as the biggest vertical for RateGain, with a recurring revenue of 99 percent contributing 41 percent of the company’s overall revenue for the quarter ending June 30, 2022.

Continuing on its path of fiscal prudence, Chopra said RateGain, which made its debut in the stock market in India last year, continues to be one of the very few profitable software-as-a-service companies globally.

“We stay committed to improving profitability through cost optimization and revisiting our commercial agreements to increase revenue per customer,” Chopra said during the earnings call.

The company registered a 59 percent year-on-year revenue growth with revenue from operations reaching $15 million compared to $9 million in the corresponding quarter last year.

“We see robust growth and our annual recurring revenue is now 20 percent higher than pre-Covid levels and is 10 percent higher level compared to the last quarter,” Chopra said.

Given the labor shortages in the travel industry, there has been an acceleration towards digitization and RateGain is well positioned to capture this opportunity, according to Chopra.

“Using artificial intelligence and machine learning we are innovating and launching new products to help our customers acquire guests, retain them and expand on their wallet share,”he said.

Citing Skift Travel Health Index, Chopra said there has been continued improvement in travel demand across the world with more countries now reporting numbers at pre-Covid levels or higher.

Given the return of travel, the company’s transactional volume is up by close to 40 percent. The bundling of desktop-as-a-service products with marketing technology businesses has resonated very well for the company.

The desktop-as-a-service business unit grew on the pack of strong volumes of its online travel agency and airline products driven by existing Tier 1 accounts and new accounts, Chopra said. “Also, we entered adjacent sub-verticals within travel such as destination management companies and vacation rental companies and signed up for a set of customers.”

RateGain has also said that it would be investing in launching new products and test piloting them this quarter.

Business Travel

3 Questions That Need Answering at This Year’s Global Business Travel Association Convention

1 day ago

This is the main event. Of course the Global Business Travel Association has held previous conferences in San Diego before at the city’s waterfront convention center — but never after such a drawn-out downturn.

The association did manage to squeeze its annual convention in last year, in Chicago, but mostly minus the European contingent who were barred from traveling to the U.S.

So it’s back at full pace, with an expected 4,500 delegates here over Aug. 14-17 (down on the usual pre-pandemic 7,000, but this year organizers claim 1,000 buyers.) The mood is mostly optimistic, with delegates surprised at just how little airline and airport disruption there was, and happy to be able to network again; it’s the first time for many people in years.

But again, unlike previous conventions, has there ever been so much uncertainty about what’s ahead? There’ll be some more clarity on Monday, with the association publishing its Annual Global Report & Forecast 2022-2026.

In the meantime, here’s a few questions.

Is This Still a $1.4 Trillion Industry? This was the amount spent globally on business in travel in 2019. That figure is still quoted by travel companies in presentations and still seen as a universally accepted benchmark. But it’s time to update that. The real answer is no one really knows, not just because the pandemic disrupted travel over the past couple of years, but because it’s yet to settle down into measurable patterns, thanks to that hard-to-define mix of business and leisure travel, remote working and “company retreats.” It may take years.

Spending was forecast to have halved to $694 billion in 2020, based on its 2021 release of the Outlook, with slow growth until recovering to above more than $1.4 trillion in 2025.

The fact is it could be way more than $1.4 trillion. We’ll have some more concrete figures when we get our hands on the 2022-2026 forecast, published Rockford Analytics, on Monday. In particular it will be interesting to see the methodology. Which links to the next question…

Is a Recession Coming or Not? This convention brings together suppliers and travel buyers. It’s the ideal setting to test the mood regarding future booking levels. In a recession, marketing and travel tend to get cut the deepest. So how are those forward bookings looking? Are the tech companies, who are already slowing or freezing hiring, cutting back further on travel spend? How are budgets shaping up? Airlines and hotels may be reluctant to share such information, but corporate buyers may have some clues. Of the 1,000 travel buyers in attendance, they’re representing 555 companies, of which 324 are new for this year’s convention.

Will Company Retreats Go Mainstream in 2023? With remote working and vacant offices a fast-growing trend in 2022, will offsites, onsites, retreats and the like make up for any shortfall in traditional business travel. Pampering retreats don’t come cheap for the more global organizations, so offer airlines a valuable source of revenue. The internet is rife with LinkedIn-style guidance on how they should run their retreats, and how often, but hopefully travel managers from the bigger firms like Cisco and PayPal who are gathering over the coming days in San Diego will offer some clarity.

Short-Term Rentals

Short-Term Rental Firm CorpHousing Group Is Slated to Do an IPO Friday

4 days ago

CorpHousing Group, which provides short-term rentals under the SoBeNY consumer brand, was slated to see its shares begin trading Friday on the Nasdaq Capital Market.

vacasa multifamily building short-term apartment rental
A multifamily building. Source: Vacasa

The company announced that it hoped to generate $13.5 million in gross proceeds as it stock starts trading under the symbol CHG. The Nasdaq Capital Market is geared for emerging companies with smaller market caps.

The initial public offering would be for more than 3.3 million shares at $4 per share, the company said.

CorpHousing Group offers consumers short-term rentals of single and multifamily units, including furnished apartments.

“Our acquisition initiatives also include leasing portfolios of unreserved rooms at hotels or leasing closed hotels and reopening them under our brands, including SoBeNY,” the company said in its prospectus.

It currently has rentals in Denver; Los Angeles; Miami; Miami Beach; Seattle; Washington, D.C.; Boston and New York, among other locations.

Startups

Travel Tech Firm Skipper Raises $5 Million to Help Indie Hotels

4 days ago

Skipper, a hospitality tech startup that offers direct booking tools for hotels, came out of stealth on Friday with a $5.8 million seed round. 

Google’s Gradient Ventures led the round. Other investors taking part include Pear.VC, Wayfinder, Uncommon Capital, ERA, angels Ryan Simonetti (Convene), Neil Parikh (Casper), and Aaron Frank (Final).

Here’s how the startup describes itself: “Skipper is building a new network for hotels that includes a streamlined booking engine to make booking easy.”

Upselling and cross-selling can boost the revenue of hotels along the way.

CEO Jason Shames previously led digital at the trendy U.S. brand Ace Hotels, and saw how challenging it was for independent hotels to create a connected guest experience similar to what many of the big chains offer.

“Our company aims to give independent hotel owners the tools they need to compete with large chains and online travel agencies and thrive on their own,” Shames said in a statement.

Travel Agents

Travel Agency Fora Raises $13.5 Million With Aim to Attract More Prospective Agents

4 days ago

Fora, a New York-based travel agency that launched last year, announced on Thursday it raised $13.5 million.

Venture capital companies Heartcore Capital and Forerunner co-led the Series A funding. Fora, which has raised a total of $18.5 million to date, aims to use the funding to invest heavily in infrastructure, including its own booking management system. Co-founder Evan Frank said the funds will also help the company recruit more prospective travel agents, as nearly half of U.S. travelers plan to use agents coming out of the pandemic. Fora estimates that 97 percent of its roughly 500 advisors had never previously sold travel.

“We are looking to create an environment to empower thousands — hundreds of thousands — of people to participate in the travel industry in a way not previously was not possible,” said Frank. “We want to welcome the next 100,000 travel agents into the industry.”

Hotels

Selina Files Paperwork to Move a Step Closer to Going Public Through SPAC

4 days ago

Hospitality brand Selina has filed paperwork with the U.S. Securities and Exchange Commission to take another step in going public through a merger with special purpose acquisition company BOA Acquisition Corporation.

The timing is still vague, however.

“The proposed SPAC merger, which has been approved by the board of directors of BOA, is expected to be completed as soon as practicable, subject to approval by the shareholders of BOA, the effectiveness of the registration statement, and other customary closing conditions,” the company said.

Selina’s merger, which was originally due to close in the first half of this year, could see the company end up being valued at $1.2 billion. The brand generated $39.9 worth of revenue during the first quarter this year, a 150 percent increase from the same period last year.

Rail

Brightline Delays Completion of Orlando Passenger Rail Line to 2023

5 days ago

Private passenger rail operator Brightline has pushed back completion of its trunk line between Miami and Orlando to early next year.

Brightline anticipates “substantial completion” — or the end of construction — of the line in the first quarter of 2023, according to a bond prospectus released Wednesday. The delay appears to be due to work on the 129-mile section of track between West Palm Beach and Cocoa, Fla., that will not be complete until early in the new year. That timeline is several months later than the Christmas target for test trains to begin running that Wes Edens, founder and Co-CEO of Brightline owner Fortress Investment, outlined in June.

“You’re going to have the train running [to] Orlando hopefully by Christmas time,” he said at the time.

Brightline cannot begin running trains with paying passengers until construction is complete and after a U.S. Federal Railroad Administration-required testing period, the operator said. It is working with the regulator to “expedite” the latter process.

“We have made tremendous progress, completing 80 percent of construction through the pandemic and subsequent supply chain challenges,” a Brightline spokesperson said. “We’re on track to complete the system at the beginning of 2023.”

Aside from construction of the Orlando trunk line, Brightline has seen positive progress on many of its other initiatives. Passenger revenues from its in service Miami-West Palm Beach line were 147 percent above 2019 levels in the second quarter. And the railroad is on schedule to open two new South Florida stations — Aventura and Boca Raton — in the December quarter. In addition, Brightline has finalized agreements on the alignment of a planned 90-mile extension to Tampa from Orlando, which will include stations at the Orlando Convention Center, near Disney World, and in downtown Tampa.

(Brightline)

Brightline is the only privately-owned passenger rail project under constriction in the U.S.

Hotels

Indian Hotels Company Had The Best Quarter in Its History: Here’s Why

6 days ago

Tata Group-backed Indian Hotels Company (IHCL) reported what Puneet Chhatwal, its managing director and CEO, called the best first quarter in the company’s history.

The hotel brand reported strong free cash flows of almost $25 million and net cash positive of $33 million in its consolidated and standalone financials for the first quarter ending June 30, 2022.

A surge in demand across markets and segments, with occupancy and rates exceeding pre-Covid levels and backed by an asset-light model, Indian Hotels Company achieved a milestone earnings before interest, taxes, depreciation, and amortization of $51 million, compared to a loss of $15.5 million in the same quarter last year, said Chhatwal.

The company reported a profit after tax of $21 million against only $750,000 in 2019-20.

“The trend is very positive in India and we have outperformed in almost every market on the domestic front, except for a marginal lag in Rajasthan,” Chhatwal said.

With revenue per available room levels exceeding that of the first quarter of 2019-20 in Indian metropolitan cities, Chhatwal, said, “The cities of Mumbai, Bengaluru and New Delhi are back.”

Mumbai Bengaluru and Delhi are also important for the hotel brand as it has owned or licensed assets in these cities. “We account for those revenues and a change in the revenue numbers has a significant impact on our portfolio and our performance,” Chhatwal said.

The company has signed 10 new hotels in the first quarter, with three hotels each under the Taj and Ginger brands, and two hotels each under the SeleQtions and Vivanta brands, and expects to sign 15 more for the rest of the year.

With its presence in over 100 locations in India, Indian Hotels Company has further strengthened its pan-India footprint with the opening of four new hotels in the current fiscal.

“So our pan India footprint is stronger and is getting even further stronger as each month and each quarter goes by through our aggressive asset-light growth strategy that has been in place,” Chhatwal said, adding that the asset-light model is not only driving growth, but is also helping the brand find the right balance which is in line with its Ahvaan 2025 strategy.

Even as IHCL is getting ready to launch a new website and a new mobile app, the hospitality brand is clear that the backbone of the company was, is and in the foreseeable future remains the Taj.

“We are very clear that all brands associated directly or indirectly with the Taj are perceived as premium brands in their respective segment,” Chhatwal said during the first quarter earnings call.

“One thing which we have been very careful about in the last few years is the premiumization of our portfolio. Any business that we enter in we want our offering to be in the premium level in their relative positioning.”

The company’s long-term growth will also focus significantly on digital enablers such as the super app — Tata Neu. “The Tat Neu integration has enabled us to get one million new members in four months and a 50 percent growth in our loyalty base,” Chhatwal said.

Hotels

Timeshare Giants Report Strong Quarter

6 days ago

Vacation ownership is having a boom time this year as the travel sector broadly recovers from the pandemic.

Hilton Grand Vacations said Tuesday that its contract sales in the second quarter were $617 million, or 5 percent above 2019 contract sales. It produced a net income (a measure of profit) of $73 million on $948 million in revenue.

Hilton Grand Vacation has also been adding back employees after the pandemic crisis, having added 3,890 employees over two years to reach about 14,000.

Meanwhile, Marriott Vacations Worldwide Corp. said Monday that it had produced a quarterly net income of $136 million on revenue of $1.16 billion.

Some analysts have been making a case that timeshare companies would be able to handle a potential recession in the U.S. without much trouble.

Deutsche Bank’s Chris Woronka and research analyst colleagues recently wrote a report making this case:

“To be clear, Marriott Vacations’ business is well within the wheelhouse of being discretionary in nature and the core sales function can also rightfully be described as being a “big ticket” purchase, especially for first time buyers. But VAC also noted that roughly 40 percent of earnings before interest, taxes, depreciation, and amoritization is largely recurring in nature and isn’t directly correlated with contract sales. …. Management also noted that its customers have an average (self-reported) net worth of $1.5 million; 54 percent of Interval owners have annual income in excess of $100,000 compared to an industry average of 29 percent.”

—Deutsche Bank Securities

Cruises

Norwegian Cruise Line Reports $509 Million Net Loss for Second Quarter

7 days ago

Norwegian Cruise Line Holdings Ltd reported a net loss of $509.3 million for the second quarter of this year, as the company benefits from relaxed Covid protocols and navigates through inflation and higher fuel costs. The company reported a reported a net loss of $1 billion in the last quarter.

Revenue was $1.2 billion, up from $4.4 million in the second quarter of 2021. Onboard revenue has risen over 30 percent from the same quarter in 2019. Load factor was 65 percent, up from 48 percent from in the last quarter.

Total cruise operating expenses rose year over year. Inflation and continued Covid-19-related costs including testing were major contributors. Fuel prices per metric ton rose to $836, up from the second quarter of $673 in 2021. The impact of the labor shortage has been limited to Norwegian Cruise’s U.S. operations, according to Norwegian Cruise President & CEO Frank Del Rio.

Looking ahead, Norwegian’s advance ticket sales balance rose $0.3 billion in the quarter to $2.5 billion, an all-time record high for the company. Sales for 2023 tickets are 40 percent higher than they were in 2018 for 2019 tickets, according to Del Rio.

Recent events are boosting the cruise line’s recovery in the months ahead. Del Rio cited President Joe Biden lifting the testing requirement for incoming travelers, the Center for Disease Control retiring its Covid outbreak tracking program for cruise ships and Norwegian Cruise’s recent protocol relaxation around vaccination and testing requirements. “Each one had a positive impact on booking,” he said. “Each of those events triggered an improvement in bookings.” 

The company expects a net loss for the next quarter due to the effects of the Russia-Ukraine conflict and current macroeconomic conditions.