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Online Travel Trends Report 2021

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This Travel Tech Essentialist report seeks to uncover the cutting-edge trends that will reshape the online travel sector emerging from the worst crisis in its history.

Sign up to the Travel Tech Essentialist newsletter to receive 10 insights every 2 weeks: https://traveltechessentialist.substack.com/

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Online Travel Trends Report 2021

  1. 1. Online Travel Trend Report July 2021 Mario Gavira | Mauricio Prieto | Victor Tofiño (illustrations) Travel Tech Essentialist
  2. 2. 1. Thinking Outside the Travel Box 2. Mobility Enables NextGen SuperApps 3. Connecting the Dots 4. Unbundling and Rebundling 5. Rewriting the Marketing Playbook 6. Subscriptions Everywhere 7. Apps Converging into a Travel Ecosystem 8. Consolidation Turbocharged 9. Suppliers Strike Back 10.Complexity Favors Retailers 11.Travel Wins Back Investors Online Travel Trend Report Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  3. 3. 1. Thinking Outside the Travel Box Victor Torfiño Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  4. 4. The API economy provides the backbone for a sprawling array of complementary services such as fintech, micro mobility and experiential services in Travel. Siloed thinking is out, cross-sector expansion is in Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  5. 5. Sample of incumbents and startups Incumbents 70% - 75% revenue generated by financial products More than 50% of transactions use an installment payment method. Raised 120M to expand its insurance product for RV owners and travellers Creates an independent FinTech business unit to facilitate seamless access to its global travel marketplace Startups Integrates local mobility in the traveller app Flexible and convenient way to pay over time Flexible payments Simple and personalized insurance products Buy now, pay later Digital first insurance Cloud Service Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  6. 6. AirAsia leads the horizontal expansion outside travel Source:Econsultancy Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  7. 7. 2. Mobility Enables NextGen SuperApps Victor Torfiño Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  8. 8. Asian Super Apps stickiness built on offering from noodle delivery to hotel bookings will take off once Western Apps start connecting micro mobility with long distance travel. Google Map will lead the path by gradually weaving the Search Giant’s travel ecosystem into a seamless mobile experience. The Superapps in the West start with maps and mobility Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  9. 9. Map & Mobility Apps recent features show the path Google Maps enabled in-app payment of public transports in 80 different city transit systems Launched Live View showing details about shops and restaurants within the App Uber built more than 550 transport partnerships worldwide Acquired Routematch, offering technology solutions around payment and trip planning services Waze offer Shopify merchants a plug-in allowing in-store pickup Built in-app payment option at Exxon Mobil and Shell Gas stations Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  10. 10. Maps & Mobility Maps lead in Downloads and Time Spent Top Travel & Navigation Apps Worldwide in Q1 2021 Source: App Annie Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  11. 11. 3. Connecting the Dots Victor Torfiño Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  12. 12. Ground increasingly replaces Air transport for short distance travel, driven by door to door convenience and growing environmental impact concern. Players combining air and different ground transport types into a seamless travel experience will flourish. Intermodal travel becomes an imperative Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  13. 13. Sample of incumbents and startups in this trend Leading virtual interlining player of Air and Ground Transport Startups Providing and combining routes transportations Intermodal booking of trains, buses and carpooling Integrating bus in air travel in one seamless door to door experience Incumbents Valued at $3B following $650M funding round Raised $115 million to fuel expansion outside of Europe and acquires bus ticketing platform Busfor Acquired Rome2rio in 2019 Bus and train travel engine Reservation & Ticketing platform for Bus travel Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  14. 14. 4. Unbundling and Rebundling Victor Torfiño Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  15. 15. Optimizing ancillaries across the customer journey An increasing complex purchase funnel crammed with ancillary services is resulting into a wave of rebundling of services into consumer-friendly packages Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  16. 16. Sample of bundled ancillary packages Kiwi.com Pegasus Airlines Ryanair Volotea Hopper.com Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  17. 17. Ancillary Revenue has accelerated further during Covid Source: cartrawler Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  18. 18. Sample of startups streamlining ancillary revenues Helps hotels generate more revenue by selling rooms in packs of 3, 6 and 12 hours Makes it simple to sell airline ancillaries Helps generate new revenue streams by process automation Helps airlines and travel brands sell more and grow non-core revenues Access to luxurious hotel pools, spas, amenities Upgrade solutions for Hotels Makes it easy for hotels and resorts to rent beach chairs, pool cabanas, jet skis... Upselling Hotel facilities in a seamless digital experience Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  19. 19. 5. Rewriting the Marketing Playbook Victor Torfiño Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  20. 20. The siren song of brand marketing Airbnb showed the virtue of a strong brand winning traveller wallets and hearts. Shifting marketing dollars from performance to brand becomes the new marketing adage, further fuelled by the gradual sunset of 3rd party tracking capabilities. Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  21. 21. Increased TV investment reflects renewed focus on brand building Airbnb and Expedia launched in Q2 2021 their largest advertising campaign in at least 5 years Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  22. 22. 6. Subscriptions Everywhere Victor Torfiño Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  23. 23. The quest for the Amazon in Travel Loyalty in travel has historically been linked to miles programs. Travel players are defying the common wisdom attracting travellers into a new breed of paid subscription programs promising recurrent discounts and perks. Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  24. 24. Sample of incumbents and startups with subscriber programs Incumbents Startups Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  25. 25. 7. Apps Converging into a Travel Ecosystem Victor Torfiño Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  26. 26. Apps as a travel companion becomes a reality Mobile native SDK’s standards turbocharge App capabilities to connect with other platforms. Travel Apps moving forward will self- generate Visas based on travel destination, offer voice-based translation at arrival and deliver check-in and room key function in the hotel, among other services. Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  27. 27. Sample of incumbents and startups in this trend Incumbents Offers check-in and Room key within Apple Wallet Novotel partners with meditation App Calm Automates SMS interactions between hosts and guests with Twilio In-App Check-in and Upsell platform AI travel assistant Threat intelligence data Hotel operations software Digital concierge and guest interactions Guest experience and upsell revenue Bag check-in & delivery from anywhere Customized travel companion app Virtual reception and user interaction software Secure infrastructure to manage identity data Startups Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  28. 28. 8. Consolidation Turbocharged Victor Torfiño Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  29. 29. Going bigger in a post-pandemic world Mid-size and regional players coming out of the pandemic with a weak balance sheet might face being acquired or extinction. Global players with a highly scalable tech stack will apply the classic economies of scale playbook triggering a wave of consolidation. Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  30. 30. Sample of post-Covid M&A activity acquires acquires acquires acquires acquires acquires acquires acquires + + Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  31. 31. Suppliers are catching up In the past, OTAs provided a significantly better online booking experience than suppliers, but the quality gap is closing fast. A thriving ecosystem of marketing tech providers combined with a larger first party data pool levels the playing field in the online marketing front Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  32. 32. Better conversion → increasing booking share Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  33. 33. Sample of technology players boosting supplier Ecommerce activity Cloud platform for accommodations Hotel AI chatbot and communication platform Open hotel commerce platform Revenue operating system Growth for hotels direct channel Airline digital passenger engagement Powering decisions with data and insights Airline revenue performance AI empowered travel content Incremental airline customers through the power of price Incremental airline profits in the post-COVID climate Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  34. 34. 10. Complexity Favors Retailers Victor Torfiño Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  35. 35. Retailers thrive under chaos and complexity Everywhere we turn, the travel product is growing in complexity: air content, non-air transportation alternatives and non-hotel accommodation options, price unbundling, border travel restrictions. OTA’s flexible tech stack and a business model laser focused on aggregating and merchandising travel content gives them an edge in bringing order into the chaos for the end customer Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  36. 36. OTA’s thrive in highly fragmented travel verticals Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  37. 37. Sample of incumbents and startups in this trend Incumbents acquires acquires acquires Airline distribution acquires Virtual interlining Flight aggregator Extended stay apartments Meeting space marketplace acquires Startups Up-to-date travel health requirements Data intelligence for the short-term rental NDC for airline distribution Enabling connection to GDS, NDC, LCC Tour Operator marketplace Mario Gavira - Mauricio Prieto Travel Tech Essentialist
  38. 38. 11. Travel Wins Back Investors Mario Gavira - Mauricio Prieto Victor Torfiño
  39. 39. Investors bullish on travel recovery Pent-up demand is materializing and both private and publicly traded travel companies are seeing renewed investor interest. Mario Gavira - Mauricio Prieto
  40. 40. Investors betting on public and private travel companies Share prices of publicly traded OTAs Funding to venture-backed travel startups (in $ billion) Mario Gavira - Mauricio Prieto
  41. 41. Sample of travel companies & SPACS going public Some of expected IPOs this year The result of Gojek’s merger with Tokopedia to IPO at $35-$40b To go public in a $40 billion merger with Altimeter SPAC To go public in a $1.1 billion merger with Thayer Ventures SPAC Joby IPO in a $6 billion merger with Reinvent SPAC Mario Gavira - Mauricio Prieto To go public in a $2.2 billion SPAC merger Rumours to go public in a SPAC merger at around $2.75 billion $500 million SPAC $500 million SPAC $300 million SPAC $170 million SPAC
  42. 42. Thank you! Sign up to the Travel Tech Essentialist newsletter to receive 10 insights every 2 weeks: https://traveltechessentialist.substack.com/ Mario Gavira - Mauricio Prieto Travel Tech Essentialist
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This Travel Tech Essentialist report seeks to uncover the cutting-edge trends that will reshape the online travel sector emerging from the worst crisis in its history. Sign up to the Travel Tech Essentialist newsletter to receive 10 insights every 2 weeks: https://traveltechessentialist.substack.com/

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