Travel companies heal losses but position themselves for emerging trends

Travel and Leisure Industry Updates

Airbnb co-founder Brian Chesky told a tech industry conference in 2014 that his accommodation booking platform was “the space eBay in its infancy.”

Now a giant accommodation and experiences provider for avid travel customers, the 13-year-old platform has inspired hundreds of small travel companies in its wake, many of which are featured in the FT’s latest annual ranking of companies. fastest growing European countries.

Michele Matt, founder of MyCamper, a Swiss motorhome sharing startup ranked 51st on the list by 2016-19 compound annual growth rate, says his business was inspired entirely by Airbnb.

In fact, the same year that Chesky was speaking to technical officials in San Francisco, Matt was on vacation in his Volkswagen California camper van in Sardinia. “[The van] a lot because we don’t use it to go to work, so we said to ourselves: ‘think of Airbnb for recreational vehicles’, ”he explains.

But the pandemic has not been favorable to the travel industry, especially fast-growing businesses without war treasures to survive closed international borders and government urges to stay at home.

S&P Global analysts say 56% of the European travel agencies they review are now rated “CCC”, meaning they are deemed to have an “unsustainable capital structure”. Anglo-German travel giant Tui had to take out three state-guaranteed loans of more than a billion euros each, while several small cruise operators, travel agents and coach companies collapsed.

“As a travel start-up, we weren’t in the best neighborhood at the time” – Michele Matt, founder of MyCamper

Italianway, which ranks 955th in the FT 1000, is a platform that offers vacant second homes to tourists. Since its creation in 2014, it has become the largest short-term rental operator in Italy, he says. In 2019, Italianway’s revenues, as well as its related activities in property management and real estate, increased by 30% year-on-year to reach 5.3 million euros (for Italianway Spa only, revenues were 4.1 million euros).

Chief Executive Officer Marco Celani said the company expected to double its revenue in 2020, but the onset of the pandemic last spring caused sales to plummet by nearly 100%. As a result, the company reduced its workforce by 25% and its turnover reached only 2.8 million euros last year. Still, Celani is confident that 2019 income levels will return by 2022.

Matt from MyCamper says his business has suffered as well. A round table last April which aimed to raise 2 million euros raised only 1.1 million euros. “As a travel start-up, we weren’t in the best neighborhood at the time,” he says.

But some have been hit harder than others. At A&D Holidays (ranked 864th), which operates as Holiday Architects – an online travel company offering tailor-made holidays from the UK to countries like South Africa and Oman – revenues have fallen to zero.

“As a company, it will take us two to three years to catch up and return to our 2019 size,” says Andrew Hunt, founder of the company.

Hotel owners, like the 424th-ranked German company Tristar, which primarily serves airports and conference centers, have also felt the full force of the lockdown.

Last month, a group of more than 60 European travel agencies called on EU leaders for a coordinated plan to restart travel in time for the crucial summer season, as countries gathered in Brussels to discuss l introduction of a block-wide health passport.

However, at the same time, Covid-19 has accelerated existing trends that will leave some businesses potentially in a better position.

Managing Director of Italianway, Marco Celani

Marco Celani, Managing Director of Italianway © Cristina Casati

Marc de Vries, Managing Director of Swapfiets, ranked ninth on the list, explains that the company’s success comes from customers wanting to enjoy the ‘service you get from using a bicycle’ without the ‘hassle of owning it. “.

Swapfiets rents bikes through a monthly subscription that allows users of its app to call engineers to change flat tires, repair brakes, or, if the problem is more serious, replace the bike.

Andreas Scriven, Head of Hospitality and Leisure at Deloitte, says the sharing economy has become “a huge trend” in travel, adding that younger consumers are more likely to prioritize buying experiences over owning items.

Celani of Italianway says pandemic has also prompted travelers to book independent rentals hotels, in order to stay “away from common areas”.

His business has also benefited from “vacation work,” as video conferencing has allowed people to work remotely – if lockdown rules allow it.

Driving vacations and more local activities are also in the foreground. For Swapfiets in particular, people’s desire to burn ‘corona kilos’ and be greener has helped increase its membership by 40% to 220,000 during the pandemic, de Vries said. Turnover rose from € 23m in 2019 to € 30m last year. It plans to launch in London, Barcelona, ​​Vienna and four other cities in France this spring.

As travel picks up, MyCamper’s Matt expects more competition. “Maybe during the corona period, not everyone has the capital or the courage to open [their] own company, but I think there will be a lot more players coming into the space, ”he says.


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