Israel’s flag carrier El Al said on Thursday it requested $100 million in compensation from the government for its strict Covid-19 travel policies and asked the prime minister to help end a stalemate in bailout talks.

El Al was particularly vulnerable at the outbreak of the Covid-19 pandemic in early 2020. It has reported losses for three years and had racked up debt to renew its fleet.

The company’s financial woes were compounded by travel limitations in Israel meant to prevent new outbreaks, and like many airlines around the world it turned to the state for help. It also has new ownership and management, which has been feuding over terms with the government for months.

El Al laid off 1,900 employees, nearly one-third of its staff, as part of a recovery plan mandated by the government to receive a $210 million aid package earlier in the year, and reduced its fleet to 29 from 45. But that, it has now said, was not enough.

“The Israeli aviation sector is perched above a slippery slope, and there is still doubt whether Israeli aviation companies can survive the crisis without government assistance,” the CEOs of El Al and two small local rivals wrote to Prime Minister Naftali Bennett.

They asked him to help settle things in an emergency meeting.

In a separate letter to the director general of the Finance Ministry, El Al CEO Avigal Soreq said his airline was “demanding immediate compensation for $100 million for damages caused to El Al due to decisions by the state.”

Earlier in the month the Finance Ministry said it was ready to offer $50 million more in aid if its owners injected the same amount as part of a new aid framework. The ministry, in a statement on Thursday, said its position remains the same.

The airlines, in their letter, asked the prime minister to re-examine the Finance Ministry’s demands of their owners. They also asked him to end some health restrictions that have hurt air travel, like mandatory quarantine for kids and vaccinated travelers.

(Reporting by Ari Rabinovitch; editing by Elaine Hardcastle)

This article was from Reuters and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.

With the summer season now over, the coastal city of Zadar in Croatia is taking stock of the emerging post-pandemic trends.

Croatians and overseas visitors arrived as usual to enjoy the beaches this year, but what was different this time was that many people stayed for longer periods, and often with their families, as they took full advantage of being able to work from anywhere.

To some extent the local municipality has been ahead of the curve in accommodating them, providing free or affordable co-working spaces, thanks in part to an active IT community and digital nomad visas, and this type of government intervention is set to spread throughout Europe. The problem is summer hotspots don’t really have the right type of accommodation.

Zadar had a headstart due to a well established coworking space called Coin, set up several years ago with backing from European funds, while another hub was developed as part of a cross-border project with nearby Bosnia and Herzegovina, and Montenegro. In fact, most coworking spaces in Croatia are publicly run.

“This summer, a lot of people came from abroad. They were heavy users of the coworking spaces,” said Franjo Pehar, assistant professor at the University of Zadar. “They want to to get rid of the children and the noise of the beach, so they use the facilities as a quiet place,” he added.

Pehar is currently involved with developing another co-working space, which will be privately funded but operated by the university alongside the municipality. It’s larger than Coin, at 2,500 square meters, and will include a business incubator. Students will benefit from mixing with entrepreneurs from around the world.

Mid-Term Trends

Several Croatian towns along the coast now offer government-run coworking spaces, and three real estate companies have approached Pehar with a view to building accommodation, including one from Bulgaria that was on a fact-finding mission.

“They’ve recognised it as a potential market,” he said.

That’s because hotels and apartment-owners tend to focus on shorter stays, typically maximizing yield from tourists looking for a fortnight break.

The problem was highlighted by two fellow professors from Switzerland visiting Pehar. They struggled to find accommodation for their stay. “What we miss are mid-term arrangements which are suitable for these types of people,” he said. “It’s hard to find accommodation for three months.”

That could be about to change. Airbnb’s CEO Brian Chesky told Skift that one-fifth of its stays are for 30 days or longer, while other accommodation providers are targeting mid-term durations.

Property technology company Blueground recently raised $180 million in financing. It offers 5,000 apartments across 15 cities globally. “As the digital nomad category continues to expand and it becomes more standardized for employees to work from anywhere, the need for flexible, long-term accommodation is rising,” the company said.

Meanwhile, Barcelona-based real estate technology startup Ukio, founded by a former Airbnb executive, announced a $9 million fundraise yesterday. Minimum stays for both Blueground and Ukio start at one month.

For smaller cities, Pehar said governments should consider subsidising accommodation companies wanting to move in to offer mid-term stays.

Finding the Third Space

Coworking spaces tend to be dominated by a handful of big players, such as WeWork and IWG, and at the other end of the scale thousands of niche providers.

However, publicly funded spaces could soon fill the middle ground, particularly with reports of a European Union-wide digital nomad visa scheme in the making.

The French government announced a $150 million investment into what it calls “third spaces.” Prime minister Jean Castex is expected to announce several measures to support their development, according to reports, incorporating research from France’s Third Space Association which has identified how “local factories” can foster innovation, training and creativity.

In three years the number of these hybrid spaces in France has grown from 1,800 in 2018 to 2,500, and could reach between 3,000 and 3,500 by the end of next year.

Ireland, meanwhile, is developing a wide network of rural hubs with high-speed internet access.

Venue and workspace booking platform Hubli already offers many venues that are government owned or subsidized. Typically it sees 52 percent of on-demand meeting reservations going to non-hotels and 48 percent to hotels.

“It’s likely these newer regional hub spaces will compete on price but more importantly location. Like every new provider, they will probably lead with competitive meeting and workspace pricing to gain market share and will certainly be an attractive regional option,” said CEO and founder Ciaran Delaney. “The Irish and French government projects are very positive, and I can see more countries launching similar programs in the future.”

Platform Drivers

While governments help fund the schemes, success comes down to local communities according to Pehar. In and around Zadar, local IT communities drove the demand for coworking spaces, often using the Meetup platform. Meetup was acquired by WeWork in 2017, but later sold it in March 2020.

“When people visit a town, they check what’s going on in that (Meetup) community, and where can they regularly meet to introduce themselves. We had 10 meetups in the summer season,” he said.

Considering this coastal town as a microcosm of future trends, another takeaway is that maybe tourism boards should be engaging with local IT communities. Tech workers tend to roam more freely, so are likely to be drivers of any demand for co-working spaces — which then have the potential to attract new markets, and those people looking for longer holidays but with a need to work remotely.

Sidenotes

Rather than power to the people, it’s power to the employees. That’s according to Airbnb CEO Brian Chesky, who was one of the opening speakers at Skift Global Forum on Tuesday.

During a live interview — Chesky’s first on-stage conference appearance since the pandemic began — he described how a “revolution” was coming.

“Before the pandemic, we used to live in one place. We called that our house,” he said. “We went to another place to work, we called that our office. And we traveled to a third place. The pandemic forced us to do all three activities in one place.”

That place, he said, with Zoom could suddenly be anywhere. “This revolution really is about flexibility. Suddenly you can live anywhere, and you can work anywhere,” he added.

With that, every summer then becomes an opportunity to go away. And when it comes to future work patterns, he believes that if a CEO forces people to go back to the office five days a week, they would struggle to keep hold of staff.

“The key is, I don’t think companies will dictate this,” he said. “I think the employees will dictate this.”

Meanwhile, strategist Parag Khanna earlier discussed how a younger workforce would now become much more mobile, operating with a “sixth sense” when it comes to choosing where they live, with climate issues also playing a part.

“They’re concerned about investing their savings and going into debt to live in what could be the wrong place, so they’d rather move. Or rather they would be mobile,” he said.

This represents a great tailwind for the travel industry, he argued, with multiple moves in a year that would benefit the economy. Corporate travel may be declining, but these two observations at least offer some good news for suppliers.

10-Second Corporate Travel Catch-Up

Who and what Skift has covered over the past week: Airbnb, Airbus, Fora, London City Airport, Marriott, Plusgrade, Uber.

In Brief

Swiss Airport Operator Predicts Business Travel Recovery for 2022

The chairman of airport operator Flughafen Zuerich has said he expects business travel to rebound next year, Reuters reported. “My personal assessment is I don’t think we will see a big recovery in business travel this year. But in 2022 there will be a strong upward trend,” said Andreas Schmid. He also said it was important to offer as many direct connections internationally as possible. “However, some destinations will be served less often than before. Perhaps only one plane will take off a day where three used to,” he added.

WeWork Reveals Revout Lab Workplace Details

Fintech startup Revolut has been working behind the scenes with WeWork to design special offices, where 70 percent of the space is devoted to collaboration. Overall, 2,000 employees will use WeWork spaces, or “RevLabs,” across Berlin, Dublin, Melbourne, Moscow, Singapore and New York. In its latest deal, Revolut will take space for 300 employees at WeWork’s Dallas Parkway location, which is the hub for the company’s U.S. expansion. In another twist, Revolut also becomes WeWork’s first enterprise member to sign new space using the Bitcoin cryptocurrency.

This week, travel startups announced more than $195 million in funding.

>>Flyr Labs, which has only been selling business intelligence software to airlines for about a year, revealed it had closed a $150 million equity financing round.

WestCap Group led the round. Private equity giant Silver Lake also joined as a new investor.

WestCap is a growth equity firm founded by Laurence Tosi, the former chief financial officer at Airbnb and Blackstone. Wndr, a firm founded by Jeffrey Katzenberg, the former chairman of Walt Disney Studios and the co-founder of Dreamworks, also invested. Peter Thiel, the PayPal founder and best-selling author of Zero to One, personally took a stake, leading the firm’s Series A round and participating in the rounds since. Read this week’s Skift story on Flyr.

>>Spotnana, a New York-based travel management company and travel technology startup, officially launched on Thursday and said it had closed a $34 million Series A funding round.

ICONIQ and Madrona Venture Group led the round.

The New York-based startup revealed on Thursday that business travel luminary Steve Singh is its executive chairman. Singh previously co-founded Concur. Read this week’s Skift story on Spotnana.

>>Ukio, which provides an alternative to the traditional housing market by offering a network of design-forward, turnkey apartments for monthly stays, said it had raised more than $9 million in seed funding.

Breega led the round in the Barcelona-based real estate technology startup. Heartcore and Partech also took part, as did angel investors including Avi Meir, founder of travel management company Travelperk.

Read Skift’s story on Ukio earlier this week: Former Airbnb Exec Pitches Remote Work as Reward Not a Right.

Skift Cheat Sheet:
We define a startup as a company formed to test and build a repeatable and scalable business model. Few companies meet that definition. The rare ones that do often attract venture capital. Their funding rounds come in waves.

Seed capital is money used to start a business, often led by angel investors and friends or family.

Series A financing is typically drawn from venture capitalists. The round aims to help a startup’s founders make sure that their product is something that customers truly want to buy.

Series B financing is mainly about venture capitalist firms helping a company grow faster. These fundraising rounds can assist in recruiting skilled workers and developing cost-effective marketing.

Series C financing is ordinarily about helping a company expand, such as through acquisitions. In addition to VCs, hedge funds, investment banks, and private equity firms often participate.

Series D, E and beyond These mainly mature businesses and the funding round may help a company prepare to go public or be acquired. A variety of types of private investors might participate.

Hopper’s long trajectory in the travel industry, going from an online travel agency to venturing into fintech, has led it from barely making revenue to now earning 70 percent from selling financial products to third-party businesses.

But the company has bigger plans ahead in its ongoing mission to continue being the best at lowering the cost of travel for consumers — it’s betting on the future of superapps for travel, which are already popular in Asia.

“There will be a western global superapp for travel — it may be owned by Google, Facebook or Alibaba, but it will be a superapp and we’re trying to become that,” said Frederic Lalonde, CEO of Hopper, at Skift Global Forum, in conversation with Skift founding editor Dennis Schaal.

Lalonde did not flinch at Uber CEO Dara Khosrowshahi’s skepticism on superapps working in the West in the way they do in Asia.

“I’m obsessed with it,” Lalonde said. “Our thesis at Hopper is that the East is ahead of the West in terms of customer behavior. If you look at kids today, it’s a completely different behavior. If you slice it generationally and you start to look at Millennials and Gen Z, you see it.”

Lalonde added that people compare on average 34 websites, and won’t be doing that on apps in the future — consumers will pick one third party app, and the share between third party apps and OTAs are growing equally, Lalonde added, noting that the aggregators are winning a much larger share.

Hopper has reached 70 million users on its app, and Lalonde sees it growing. Part of the reason is that the company is innovating a lot, as well as its obsession over consumer travel pricing.

“We understand future prices better than everybody else so we can price the risk in a way that nobody else can do,” Lalonde said.

Skift’s Schaal asked whether Hopper describing itself as fintech was a buzzy way to up its valuation, but Lalonde said that given its revenue does not come primarily from being an OTA but rather from orthogonal financial products.

Lalonde said that it might even be a better version than some of the standard fintech products.

“About one out of three of our customers that freeze the price say they don’t have the money in their bank account to pay the whole thing. They’re using this as a deposit. It’s a better version of buy now pay later,” Lalonde said, adding that what Hopper does is hold the price for the consumer.

Pointing to Hopper’s recent deal with Amadeus, Skift’s Schaal asked whether the end game for Hopper was to become a B2B company or a consumer company. Lalonde recognized that it might be considered a stupid move to take your financial products and give it to your competitors, but that the fundamental reason is behind Hopper’s obsession to lower the cost of travel for its customers.

“We’re here to steal share from Expedia all day — the way we do that is we drop the price of travel. We have a digital wallet — or what we call a carrot — customers respond to a $2 difference. It’s primarily about price at the end of the day in leisure, that section our app is good at.

“I don’t see people clamoring for this kind of thing,” said Skift’s Schaal in bringing back the focus to a future travel superapp for the West. But Lalonde said that the reason is that it’s being done wrong in the West, citing the example of Pinduoduo e-commerce app in China.

“It’s this absurd mix of gamification, live streaming, the largest ramp up to $5 billion revenue faster than Alibaba and how did they do it? They have 700 million monthly active users and they sell travel. So what they did is they said people are willing to invest time doing various things, comparison shopping to save money in commerce and travel. They will make it available in the app but make it fun.”

“This app does one thing I’ve never seen: if you engage with it, you get real money back — just for using it,” Lalonde added. “So you’re not seeing this pick up in the west because we are doing it wrong and we don’t understand how customers are going to behave in the future.”

Google won’t become irrelevant, according to Hopper’s CEO, but he predicts that searching will lose share. Accepting virtual currency and getting the wallet infrastructure right is also part of the plan, which Asia does so much better, Lalonde said.

“Your DNA has to be built up from the ground up completely differently,” Lalonde said.

Will Hopper succeed in its aim to become the travel superapp of the West?

“Let’s talk in five years,” Lalonde said.

Tripadvisor CEO Stephen Kaufer defended the company’s overhaul of its Tripadvisor Plus subscription product by arguing that the change actually benefits both consumers and hotel chains.

“Consumers are likely to be getting the same savings, just at a slight different time,” Kaufer said Thursday at the Skift Global Forum in New York. “It’s literally the same to hoteliers,” he said.

Skift reported earlier this week that the $99 subscription model was shifting to a points-based reward program, and Wall Street punished the company’s share price, which fell by 8 percent and wiped out $374 million in the company’s market capitalization in the day after the news broke.

The program offered hotel discounts immediately to consumers but will shift to offering members points in a Tripadvisor wallet. These points can be withdrawn for cash or used for future travel expenses. “It’s real money you’re going to use on this trip or your next trip,” Kaufer said.

Hotels, however, objected to Tripadvisor advertising discounted rates on its public site as a way to drive subscriptions. Some hotel groups were fine with the discounted rates being advertised behind the Plus paywall, but others were not, Kaufer admitted. “Some hoteliers objected to the size of the program,” he said.

Tripadvisor made the change after “doing a lot of research,” Kaufer said. Early reaction to the changes were positive, with some calling the new wallet system “aspirational.”  Consumers trust Tripadvisor and know the cash is real, he said. “These vacation funds are real money you can put in your wallet.”

It’s too early to tell if the change will affect renewal rates, Kaufer said, adding that his gut reaction is that renewals will be high. “Customers spend $99 to get way more than that,” he said. “The near universal reaction is that this will be aspirational.”

Travel’s Resurgence

“Nobody is going on a Zoom vacation,” Kaufer told Skift in August 2020, during the depths of the pandemic. He is “hugely bullish” on travel’s resurgence, especially leisure travel. “The notion that anyone would switch over to virtual travel experience or online cooking classes — that’s utter baloney,” he said on Thursday.

“If anything, [online experiences] will spur demand to get out there,” Kaufer said.

But trends have changed as the pandemic endures. Last year, U.S. travelers flocked to camping sites and national parks for vacation travel, while avoiding cities like New York, Chicago, or San Francisco. “That has flipped,” Kaufer said. Tripadvisor is seeing more interest in travel to the big U.S. cities, especially as restaurants and theaters reopen. “Experiences will be a huge part of [the recovery,” he said. “People care about what they do at the destination.”

Travel in Europe lagged as lockdowns persisted longer in that continent than in the U.S., but now “business has surged,” Kaufer said. But travel remains regional. “The big international trips aren’t happening.”

The hotel industry should charge guests for add-on services just like airlines do, according to one of the largest U.S. hotel owners.

MCR Hotels CEO Tyler Morse is testing a pricing model around services and amenities at the company’s TWA Hotel at New York City’s JFK Airport. Things like early check-in, late check-out, use of the pool at peak hours, and faster WiFi are all available to guests — for an added fee on top of the daily room rate.

Some may balk at this a la carte pricing system, but Morse sees it as a way to generate more revenue while also providing guests with a lower base rate.

“I keep kind of trying to push the envelope here and say, as a hospitality business, stop giving things away for free,” Morse said Thursday at Skift Global Forum in an interview with Skift founder Rafat Ali. “Being hospitable does not mean giving people things for free.”

Prices range from $10 for early check-in to $20 for late check-out. Morse previously told the Wall Street Journal there is a $25 fee to use the hotel’s highly popular rooftop pool, which includes views of the JFK airfield, during peak times like the weekend.

“Business travelers never use the pool, so why should they pay inherently an indirect cost to use the pool,” Morse said. “It allows us to charge a lower rate to everybody, and then people can buy up for what they want. So, everybody gets a lower rate.”

Morse previously discussed an expected rocky transition period for guests to get used to such unbundling of services in the hotel sector, but it could become an industry norm similar to how airlines implemented similar measures.

There’s good reason to follow Morse’s take. MCR Hotels is the fourth-largest hotel owner in the U.S. by room count with more than 20,000 rooms in 34 states. The company’s portfolio is also rapidly growing: MCR acquired 41 hotels in the last 18 months.

The airline unbundling of services and charging up has been a financial windfall too good for hoteliers like Morse to ignore. Ancillary revenue from products and services for the airline industry was a major source of profitability leading up to the pandemic. Four airlines — Allegiant, Spirit, VivaAerobus, and Wizz Air — generated more ancillary revenue last year than they did revenue from ticket sales.

“To the extent the hotel business moves in that direction, the customer gets what they want,” Morse said. “Everybody gets a lower price point, and the industry becomes more profitable.”

But there has been pushback to the model: Marriott International CEO Anthony Capuano told the Journal in August he was skeptical owners would support the a la carte pricing model.

“[The major hotel company CEOs] all pay lip service to it but remember: They’re in the business of giving things away for free. That adds brand value,” Morse said. “We owners are in the business of not giving things away for free because it’s our bottom line. It doesn’t hurt [Marriott CEO] Tony [Capuano] or [Hilton CEO] Chris [Nassetta] to give things away for free. It hurts our P&L.”

The recent announcement that the United States will reopen to fully vaccinated international air travelers from November has undoubtedly provided a major boost to U.S. destinations battered by the large-scale absence of visitors from lucrative markets.

But the news has also led destination marketing organizations to immediately revamp their strategy to prepare for the return of overseas visitors, said three executives from major U.S. destination marketing organizations at the Skift Global Forum on Thursday in discussion with Skift global tourism reporter Lebawit Lily Girma.

Dana Young is one executive who is wasting no time to preparing her destination to welcome international visitors. The president and CEO of Visit Florida said she’s going to London on Saturday to establish new alliances in the United Kingdom, a key market for the state.

“Not only have we not backed off, we are actually, at this point, hitting the accelerator,” Young said. “Our goal is to build our market share and all of our key markets in the next year and a half.”

Meanwhile, Caroline Beteta, the president and CEO of Visit California, is counting on the fact the DMO has been prepared for the reopening to give it a leg up in being able to welcome large numbers of visitors.

“We have a presence in 14 overseas markets, and we did not cut the cord completely,” she said. “In the U.K., for example, we were able to retain 70 percent of the overall bookings to California in the form of credits and these now are ready to be deployed with this latest announcement.”

Beteta added that the DMO’s strategy to attract visitors features another key component Over the next 30 to 60 days, Visit California is working to bring influencers from key markets such as Canada, Mexico, and the U.K. to “reintroduce the product and get people excited in those prospective countries.”

Meanwhile, the large-scale absence of overseas visitors from popular U.S. tourist destinations largely led DMOs focusing on marketing their product to local residents. Elliott Ferguson, the president and CEO of Destination DC, said the DMO used the Covid-induced pause in large-scale overseas visitation, to reach out more to its local community.

“We want the local community to understand why tourism is important,” he said. “I think the pandemic has  really given us the chance to understand the impact of what happens when people don’t come.”

So the DMO decided to target nearby residents, and the step the DMO took was modifying its website to make it more appealing for the region’s residents. “We want them to use that when they’ve got that family member that’s coming in for the weekend,” he said.

Visit Florida and Visit California also decided to take similar approaches. “As the pandemic reared its ugly head, we realized we needed to market to our residents first,” Young said.

She cited a survey in which 63 percent of respondents said they had a personal goal in supporting Florida businesses and helping rebuild Florida’s economy. In addition, she said that many Floridians stated, upon resuming their travels, they would visit a Florida destination first.

“They felt an obligation and responsibility to support our tourism businesses,” she said.

While Visit Florida had never seriously marketed to instate residents before, Young credited the DMOs efforts for spreading the word out about places many Floridians  were unaware of and said more marketing to Floridians would be a part of the DMO’s efforts going forward.

Finally, further west, Beteta said Visit California would continue to use the lessons it learned during the pandemic, such as involving its more communities more in the tourism product. “We embrace stewardship, which was inclusive of communities prior to Covid,” she said.

“We needed to use that stewardship to educate visitors to these first-time area on how to be a responsible traveler. [That strategy] is bringing in our residents,” Beteta said.

Accor’s CEO is steering the brand towards more luxury and lifestyle properties. Fortunately, hotel owners are more than obliging.

“I’ve been at the helm of this company for the past eight years, and I’ve been trying to wake up a sleeping giant, which Accor has been for a number of years,” Sebastien Bazin told Skift’s hospitality reporter Cameron Sperance at Skift Global Forum on Thursday. “I decided eight years ago to be asset light, and it was five years of pain.”

Shortly after, however, the pandemic struck — which coincided with his plans to move away from Europe, and move higher up from mid-scale hotels. Following a restructure, ultra luxury and lifestyle hotels became independent divisions. And in November, Accor continued its focus on lifestyle brands by announcing plans to join forces with Ennismore, the owner of Hoxton Hotels.

Are they the segments with the most growth potential, Sperance asked. Is there lender appetite for a relatively new concept?

“Two thirds of my existing (hotel) owners are interested to go into lifestyle,” Bazin said. “We actually feed them with new lifestyle and luxury brands, which they never had the capacity to offer before.”

In terms of the numbers, the CEO said that last year, 90 percent of revenue came from just 10 Accor brands, out of 40. But in the future there’ll be less revenue concentration. “This year, it’s 80 percent from those same 10 brands,” he said. “In three years, it will be 60 percent.”

There are currently 13 lifestyle brands, which represent less than 2 percent of Accor’s room count, but 5 percent of fee volume, Bazin noted. “In the last two years, they’ve represented 30 percent of the fee stream for the years ahead, and that could go up to 40 percent,” he added.

However, for emerging destinations, such as South America, Southeast Asia and Africa, Bazin said he continued to pay a lot of attention to the legacy brands. ”This is my engine when I go to emerging countries … those brands are extremely valuable, because we know what works and it’s a good return for the investor.”

The U.S., though, remains a tougher market to crack. Bazin said that the portfolio was perfect — almost.

“There’s no empty hall I want to fill. I know exactly what I want to build. It’s close enough to have the perfect portfolio… but I wish I could be bigger in America,” he said. “We tried, and we failed.”

He also joked that his rivals had been “crushing” him in China as well as the U.S.

“I won’t crush them, as Europe is big,” he said. “But there’s a lot of respect between the groups.”

Greener Goals

As rival Marriott embarks on a net-zero mission, Accor on Tuesday joined the Sustainable Hospitality Alliance, a global organisation that brings together hospitality companies and uses the industry’s collective power to address challenges affecting the planet.

The alliance is also aligned with the United Nations Sustainable Development Goals, which commit to pilot continued actions on a range of social and environmental issues including human rights, youth employment, climate action and water stewardship.

When challenged if growth is compatible with this type of eco-alignment, Bazin said Accor had been aware of sustainable hospitality for decades. “We hire 80,000 people every year,” he said. “We know quite a bit about how to be respectful, it’s part of our DNA.”

He added that expansion would be stemmed at some locations, but for the right reasons. “We’ve stopped more deals than before,” he said. “I was in the south of Europe, and spent two and a half hours walking on the site, (and decided) we should not be sacrificing that land.”

American Express Global Business Travel has parted ways with Lola, the corporate travel booking (and more latterly expense) app founded by Kayak co-founder Paul English.

The split comes three years into a five-year exclusive deal, which was based around a revenue-sharing arrangement. It also permitted Amex GBT to purchase equity from Lola should the partnership prove lucrative. “I’d be very happy if GBT ends up owning a lot of Lola,” said English at the time.

However, the company this week announced it had shut down its current service.

“We have some exciting news about the next phase for Lola.com, but we have to shut down our current service for now, to make way for new things coming soon,” it said on its website. Lola said it can no longer honour requests for bookings or trip assistance, and directs enquiries to Amex GBT.

Amex GBT confirmed to Skift that its customers would no longer be using Lola, and that the partnership had ended.

One Too Many Apps?

The partnership termination comes just months after Amex GBT launched its spend management platform, Neo1, in the U.S. after a year-long trial in the UK.

With a focus on expenses, it represented a significant break from the agency’s typical travel management offering, and was built for smaller companies that probably don’t care that much about travel.

Sound familiar? Lola pushed into expenses in October last year, with Lola Spend, and recently promoted itself as a “financial operations platform.”

Other corporate travel agencies also dived into expenses, mostly notably TripActions with its Liquid platform.

Was it efficient for Amex GBT to continue promoting another travel management platform after announcing its intention to acquire Egencia, or working with another expense platform after launching Neo1?

“With the release of Neo1 in the US, we now fully support small and medium-sized enterprises looking for an end-to-end, consumerized solution for travel, expense and spend,” said Evan Konwiser, executive vice president product and strategy at Amex GBT.

“All existing Lola users have transitioned to Neo1 and will continue to enjoy the comprehensive and unique travel content, superior service, and complete digital solution that come with the powerful backing of American Express Global Business Travel.”

Will Lola refocus on payments and expenses only for its next phase?

Meanwhile, another business travel platform, Upside Travel — again founded by an online travel agency veteran, Jay Walker (founder of Priceline) — has closed down.

“Due to the ongoing impact of the pandemic on the travel industry, Upside has decided to shut down its business after six years,” the company said. “Unfortunately, lingering uncertainty about when and if business travel will return to pre-pandemic levels has made raising additional capital or finding an alternative path too unlikely at this point.”

Like Lola, it had a relationship with a larger agency, as was 25 percent owned by Flight Centre Travel Group. Upside didn’t appear to have gone down the expense pathway like many of its peers.

On Wednesday, Flight Centre’s Corporate Traveler division, which caters to startups and mid-market businesses, launched a new travel management platform called Melon.

Upside and Flight Centre did not respond to a request for comment.

Booking Holdings CEO Glenn Fogel is used to being a bit on the defensive about Airbnb. The rival online travel agency has much better brand recognition in many markets than his conglomerate’s flagship brand Booking.com — particularly with short-term rentals and vacation homes.

So Fogel seemed to enjoy teasing Airbnb CEO Brian Chesky about some comments Chesky made about performance marketing earlier during the same New York conference this week, Skift Global Forum.

Fogel was asked on Thursday by Skift Executive Editor Dennis Schaal about his reaction to Chesky’s comments earlier in the forum that Chesky doesn’t want to return to past levels of spending on Google search ads and other forms of performance marketing.

Some context, first: In 2019, Airbnb reported $1.14 billion in sales and marketing expenses related to performance marketing. On Tuesday, Chesky spoke about what the approximate unaudited “run rate” of spending by Airbnb was leading into March 2020.

“We were spending $800 million on a run-rate basis on marketing, mostly on Google Keywords,” Chesky said. “So we shut off $800 million of run-rate marketing. And what happened was our profit was still 95 percent of the year prior. So we started realizing maybe we don’t have to return to that level of spending, and we have not.”

When quizzed about the comments, Fogel seemed bemused.

“They may have misspent $800 million,” Fogel said. “Did they fire the CMO [chief marketing officer]? They spent $800 million, and nothing worked?”

Fogel acknowledged that Airbnb has “clearly” great branding overall, and he complimented Chesky for being a talented leader.

Schaal also asked Fogel about comments made the previous evening at Skift Global Forum by Expedia Group vice chairman and CEO Peter Kern.

Kern had mocked Fogel’s frequent recent commentary that Booking Holdings was looking at building “the connected trip.”

“It’s a good set of words,” Kern said. “But we’ve been in the trip business for a long time, and we sell more multi-product trips than any other OTA [online travel agency] in the world. We’re going to keep doing it.”

Fogel defended his ” connected trip ” concept after complimenting Kern for his stewardship of the rival conglomerate.

“It’s not just a bunch of words,” Fogel said. He clarified his vision that online travel agencies should be much more proactive about ensuring that if a problem arises with any aspect of a person’s trip, they should be able to rebook and service all the other affected elements of a trip immediately.

Incoming Southwest Airlines CEO Robert Jordan was only planned to pick up his food when he went through the drive through at a Dallas-area Whataburger recently. But stapled to his food bag was also a job application — a symbol of the entry-level hiring challenges that face business across the U.S.

Southwest is in the middle of that fray. The Dallas-based carrier is receiving on average just 14 applications per open position compared to 42-43 per position prior to the Covid-19 crisis, Jordan said at the Skift Global Forum in New York on Thursday. And that is even the case after the airline raised its starting wage to $15 an hour, a level that Jordan said has become the “de facto” minimum wage across the U.S.

“The constraints have always been can we get aircraft, can we get facilities, [and] can we get gates,” he said. “I’ve never experienced a time when the constraint is ‘can we get employees?’”

Staffing issues are hitting Southwest where it hurts: operations. In August, the airline cut more than 5,000 flights from its schedule in September and October citing staffing-related operational challenges during the summer and the fallout from the Delta variant on travel demand. But even with those reductions, the Southwest Airlines Pilots Association may picket at major airports during the yearend holidays to show their dissatisfaction with the carrier.

“Stability in our operation depends on staff,” said Jordan at the forum.

Southwest plans to hire 5,000 additional workers by the end of the year, and another 8,000 in 2022. Open positions are for jobs across the carrier but primarily in frontline positions.

While staffing is a top concern for Jordan as he prepares to take the reins at Southwest from CEO Gary Kelly in February, it is just one of many that the incoming chief faces. For one, the airline industry continues to slowly emerge from the Covid-19 pandemic and the travel slowdown. Asked about the recovery, Jordan said that he sees 2022 as another “transition” year in the recovery. He is optimistic that business travelers will return — his predecessor has said this may take 5-10 years — but does not expect this to occur overnight.

“I’m an optimistic guy,” said Jordan. “I’m very optimistic that we’re going to get the travel back.”

U.S. domestic passenger numbers were at roughly 79 percent of 2019 levels during the week ending September 21, according to data from industry trade group Airlines for America (A4A). That’s down from a peak in July when numbers were nearly back to where they were two years ago.

Looking forward, Southwest sees “normal” booking trends for the yearend holidays, said Jordan. U.S. airlines are broadly optimistic for a travel boost around Thanksgiving and Christmas after revising back their fall outlooks.

Jordan also faces the challenges of managing all of Southwest’s network growth during the crisis. The carrier added a record 18 new destinations — ranging from Chicago O’Hare to Miami and Steamboat Springs, Colo. — to its map in the last year-and-a-half, and greatly boosted its presence in Hawaii. It did this by reducing the number of flights — or depth of service — to many of its existing destinations when business travel evaporated.

Southwest plans to build back that depth in 2022 with the delivery of 114 new Boeing 737s. Those planes will replace the 92 aircraft used to launch all of the airline’s new markets and then some. Asked if Southwest’s growth will continue, Jordan said the airline “may open a few” new markets next year.

“I’m 80 percent excited and about 20 percent terrified,” Jordan said of his new job. And, for those wondering, he did not apply for that Whataburger job.

A new startup is attempting to strip traditional technology vendors of their clout in corporate travel. In a surprise, the New York-based company Spotnana revealed on Thursday that business travel luminary Steve Singh is its executive chairman.

The New York-based startup officially launched by closing a $34 million Series A funding round, led by venture firms ICONIQ and Madrona Venture Group.

Singh’s involvement in Spotnana will catch notice. He successfully sold travel-and-expense specialist Concur to SAP for $7.4 billion in 2014. He also has evaluated hundreds of startups as a managing director at Madrona. This Seattle-based venture-capital firm was an early investor in Amazon, and it maintains close links with the e-commerce titan.

“While I’m not the CEO of Spotnana, I spend an inordinate amount of my time on it because I love the platform,” Singh said.

Officially, Spotnana came out of stealth on Thursday, led by CEO and co-founder Sarosh Waghmar. But Skift had named and clocked its behind-the-scenes development earlier this year.

Spotnana does two things. One is that it acts as a travel management company, offering unbundled services to corporations.

“We have a consumption-based commercial model,” Waghmar said. “There are no upfront fees or minimums you must pay. This model differs from the way the industry has typically worked, which has been pay-to-play.”

Separately, the startup provides automation tools on a white-label basis to travel management companies. The companies can replace many point solutions, or single-function tools, with the startup’s platform.

“I don’t think you can beat the incumbents by building incrementally on their technology or copying their business model,” Singh said. “Instead, we’ve built something from the ground up that solves business travel problems 10 times better than what we’ve seen before — and that has a very different economic model for customers.”

Spotting a Need for Speed

Behind the scenes, corporate travel is an industry still dominated by traditional systems and data exchange methods. Typically, travel managers at a global corporation have their data and software broken up country-by-country, without easy integration for managing costs and policy compliance. Usually, a mid-market travel management company pulls content from a complex set of sources, leading to complex (and too often manual) workflows.

Singh said that corporate travel’s technology stack needs to shift to the cloud much faster than it has. Next-generation internet-based services offer benefits because vendors sell them via subscriptions, not licenses. They also come without cumbersome on-premise installations and with a single, consistent system rather than multiple ones.

“Obviously, I’m respectful towards the company I was fortunate to be a part of building [Concur],” Singh said. “But if you think about what a global deployment of Concur typically looks like for a corporation, it can take many quarters at least to deploy many instances of it globally for a company that may have, say, 300,000 employees.”

“Solutions built today with true cloud-native computing, like what we’ve done at Spotnana, should let you deploy to 300,000 employees worldwide in a matter of weeks or months. That’s a massive step-function change in cost structure for the customer.”

So is anyone buying yet?

“We have 50 customers using our product, ranging from enterprise accounts to middle-market accounts,” Singh said.

Only one corporate client so far is a “Fortune 1000 company.” Yet, the startup aims to tackle the high end of the corporate travel market, rather than the small-and-medium-sized businesses that business travel management startups such as TravelPerk and TripActions target.

What about its enterprise software tools for travel management companies?

Two mid-market agencies based in the U.S. have been using Spotnana’s platform, but the startup didn’t disclose their names.

“We charge one fee on a consumption-based model,” Waghmar said. “So mid-market agencies can stop paying 30 vendors to run their business on a mix of systems and point solutions, and instead move everything to us for one fee, only buying what they need.”

Looking to Succeed Where Others Have Stumbled

Spotnana has raised $41 million in funding since its birth in 2019. Besides Iconiq and Madrona, investors include Decibel, Mubadala Capital, 8VC, and Global Founders Capital.

Spotnana has more than 110 employees. Shikhar Agarwal, who previously worked at Google DeepMind (the tech titan’s artificial intelligence unit), is the startup’s chief technology officer and co-founder. Bill Brindle, who once served as the chief operating officer of American Express Global Business Travel, is vice president of operations. Johnny Thorsen, who has previously worked on strategy at American Express, Concur, and Travelport, is head of strategy and partnerships. A member of the board of directors is Greg Stanger, a former chief financial officer of Expedia.

Yet experienced executives and investors have backed corporate travel startups before with mixed results. In 2015, Priceline founder Jay Walker launched Upside, a company with a plan to upend how businesses book unmanaged travel. Upside drew more than $100 million in venture investment, but it closed its doors earlier this month. Lola, the mobile travel agency startup co-founded in 2015 by two Kayak veterans, attracted funding from top-tier venture capital firms Accel and General Catalyst. But it has meandered since until more recently gaining some traction in a cautious sector.

The startup’s leaders said the pandemic-related revenue crisis has prompted travel management companies and corporations to rethink everything and take risks. The mass cancellations created a mess of refunds with a lack of visibility into who spent what and how to track travelers to ensure their safety and security. Spotnana’s executives claim this crisis has created a willingness among many players to make big changes.

A Question of Content

Yet it wasn’t fully clear whether Spotnana had aggregated enough content — meaning all of the most desirable airfares, hotel rooms, and rental cars — that the corporate customers of travel management companies will need.

The startup said both corporations and agencies would prefer its commercial approach to obtaining content. Most travel agencies get much of their airfare content from one of three so-called global distribution systems, Amadeus, Sabre, and Travelport, which provide incentive payments to agencies to use their reservation systems.

The tech middlemen cut complex deals with airlines, and sometimes content may be displayed, promoted, or left out of any given corporate booking tool or travel management company offering. For example, Lufthansa Group had been witholding some content from Amadeus, Sabre, and Travelport but has slowly been making that content available, first through Sabre and Travelport.

Spotnana doesn’t pay incentive fees to agencies, and it said it avoids using the global distribution systems, choosing whenever possible to source content either directly or via other aggregators.

“Things have gone wrong when a TMC [travel management company] in effect says to a corporate client, ‘Hey, you know what, I’m only going to make this content available to you because I happen to make the most economics on it.”

Yet Spotnana’s content will only be satisfactory if it compares to the breadth and depth of the current leaders, the global distribution systems — which, while they have some gaps in content, remain the gold standard.

The startup was vague on how much content it had today.

“The reality is the best fares in the broadest selection of content is only available directly through an airline or hotel,” Singh said, adding that the company is building business relationships with suppliers. “We’re not just building a booking tool or replacing pieces of the mid-office or the system of record. We are building out the distribution pipes with direct business relationships with suppliers.”

It seems like the startup’s executives are hoping that if it has “good enough” content for the most popular routes, that will be enough to entice some companies to test it out. Maybe it can also overcome a sector’s historic resistance to sweeping changes — a resistance that has often been grounded in practical realities.

“Look, maybe I’m being a little bit idealistic,” Singh said. “But I feel that after many decades of working in the technology space, I can say it’s not a false sense of idealism. You can’t solve big problems like the inefficiency in corporate travel without being ambitious in how you attempt to solve them.”

SoftBank Group-backed Indian hospitality startup Oyo Hotels and Rooms is expected to file for an initial public offering (IPO) next week to raise around $1 billion, a source told Reuters on Thursday.

The hotel aggregator is looking to list in India’s financial capital of Mumbai and its IPO is tentatively pegged at between $1 billion and $1.2 billion, the source said, adding it will consist of a fresh issue of shares and an offer for sale from existing shareholders.

Oyo did not immediately respond to a request for comment.

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The listing plan follows a stellar debut by food delivery firm Zomato Ltd in July. Berkshire Hathaway Inc-backed Paytm and private equity firm TPG-backed Nykaa have also filed for IPO. Ride-hailing firm Ola, which is also backed by SoftBank, is also set to enter markets.

Oyo, in which SoftBank owns a 46 percent stake and is one of its biggest bets, has endured months of layoffs, cost-cuts and losses during the global health crisis.

Its founder and CEO Ritesh Agarwal had said in July that business was likely to return to levels seen before the second wave of Covid-19 infections in India and “grow from there.”

Last month, Oyo received a $5 million investment from Microsoft Corp. Kotak Mahindra Capital, JP Morgan and Citi are the bankers advising Oyo on the IPO, the source said.

(Reporting by Chandini Monnappa and Rama Venkat in Bengaluru; Editing by Arun Koyyur)

This article was written by Chandini Monnappa from Reuters and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.

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Welcome to the second edition of the Travel Tech Briefing. I’ve been enjoying meeting several readers at Skift Global Forum this week.

• More on what I heard from Forum attendees in future editions of this weekly briefing.
• Today I wanted to talk about why a recent top travel executive switched companies during the Great Resignation.
• The story hints at how airlines are coping with “digital supply chains” that have become a mess. It also anticipates the type of “order” some industry executives want to impose on it all and gain an upper hand in selling.
• If you’ve been talking NDC, or the “new distribution capability,” here’s why you have to at least know about an emerging concept called One Order — whether or not you believe it will become real.

Tye Radcliffe, who had been United Airlines‘ top distribution executive, quietly hopped to a new role at airline software vendor Accelya.

• Radcliffe joined Accelya in late June as vice president of product strategy. The move required a significant shift in perspective — given that he had been director of distribution for United for years.
• Vista, a private equity firm, bought Accelya in November 2019 and has been funding its growth.

United’s revamped approach to distribution will debut shortly, Radcliffe said. 

• “You’re going to see United take off within a new distribution approach soon,” Radcliffe said.
• “The analogy is like when you’re building a new aircraft and it’s flight worthy and painted and you’re just finishing putting in the entertainment system and the seats to make it fully functional,” Radcliffe said.
• United wants to make sure it has the systems and workflows in place to let travel management companies “service” their clients’ tickets — meaning, be able to handle refunds or cancellations seamlessly — before debuting the new model, he said.

Radcliffe felt he could shape distribution’s future more as a full-time product person at this particular moment in the industry’s ferment.

• “Full disclosure: I really wasn’t looking for a new job,” Radcliffe said. “I love United, and I think what Scott Kirby is doing is fantastic, especially the work that he and the team are doing in the environmental space with carbon sequestration and new investment in electric aircraft.”
• But Accelya executives pitched the new position as a “once-in-a-lifetime opportunity to help reshape distribution for the airline industry,” Radcliffe said.
• “Accelya is bigger than many people realize,” he said. “When you look at revenue management and NDC revenue accounting, 50 percent of passengers boarded globally use one or multiple Accelya products.”
• “My passion has been in getting new distribution processes globally adopted,” Radcliffe said. He argued he can advance his cause more quickly by developing products at a vendor.
• “While I enjoyed my time at United, I won’t miss negotiating OTA [online travel agency] or GDS [global distribution system] agreements,” Radcliffe said.

Airlines are in a new phase of how they approach the “build, buy, or partner” question. “Partnering” has greater appeal as carriers emerge from the pandemic.

• “I believe it’s broadly true today across major airlines that if a project is going to require a ton of people to keep it updated and maintain lots of integrations, there is definitely an appetite to buy rather than build,” Radcliffe said.
• “At airlines today, even at one with a strong IT group that is passionate about building, their product and business folks will understand the complexities of a project,” Radcliffe said. “If it’s something you can just build and sort of set it and forget it — or just do maintenance on it, why not build it?”
• “When I worked at United, we absolutely could’ve built our own distribution API [application programming interface] if we wanted to,” Radcliffe said. “The building of a translation layer for our existing United APIs into the next-generation XML programming language wouldn’t have been that difficult.”
• “The hard part would’ve been onboarding all the partners. Also, keeping it updated, and taking care of all the bugs, and customizing when one partner uses it a little differently than the others,” he said.

The recent watchword among airline distribution executives has been NDC, or the new distribution capability — a term that has come to stand for adopting more modern data exchange methods and user interfaces to make selling airfares more like shopping on Amazon.

• Some airline groups, such as American, Lufthansa, and soon United, embrace NDC.
• Others, such as Delta, have been more hesitant —though Delta has been trying similar things like the “new airline storefront” via online booking services such as TripActions.

Radcliffe argued that the real energy is with a futuristic airline-backed project called One Order, which has larger ambitions than NDC.

• “Even if an airline executive right now is thinking, ‘Why should I be interested in One Order because it isn’t likely to really happen any time soon?’, they should still make sure they understand it because it’s the direction the sector is heading in,” Radcliffe said.
• The airline industry will replace the concept of a plane ticket, which functionally gets represented in computers either as a passenger name record (PNR) or an electronic miscellaneous document (EMD), with a new concept called an “order” that is more elastic.
• “To explain One Order to investment analysts covering the space, I would use the Amazon example, where consumers shop and have multiple items in their cart. They don’t have a ticket for each item in a cart because it’s all part of one order, conceptually,” Radcliffe said. “The exciting thing for a corporate customer that buys travel is having a trip come in with one easy-to-read receipt and having the ability to pay for it with any valid type of form of payment.”
• “NDC has been about laying the foundation of modern retailing by becoming able to get content in front of customers in third-party channels via modern selling methods,” Radcliffe said. “But the next step is to start to chip away at those legacy barriers that stop people from really selling creatively. Once you’ve replaced a ticket with an order you’ve got the freedom to move farther faster.”

One Order, which is championed by airlines such as American and Lufthansa Group, has several “pillars.”

• Key topics include changes to how travel agencies shop for flights, how airlines go about setting fares, “availability calculation” as a concept replacing today’s “schedule builder” concept, greater revenue integrity through a modernized accounting and settlement process, and savvier business intelligence, meaning the ability to use data gathered across an airline organization in actionable ways.
• When airline folks come up with new product ideas, they have to really think through every system that will be impacted by the addition of the new product, Radcliffe said. That slows down the introduction of new products. They also have to check every channel they sell in to make sure each channel can display the product in the airline’s preferred way, such as with the correct pricing or branding attached.
• In theory, a change to a “one order” world would streamline all those processes.
• “For airlines, the behind-the-scenes benefit of a One Order world is that when you want to roll out a new product, you don’t have to figure out what ‘reason for issuance code’ you’re going to put on the EMD to fit the old accounting process, so to speak, to operationalize it,” Radcliffe said.

Some industry executives are skeptical about the chances of One Order seeing daylight anytime soon. Some others believe a top-down change led by airlines wouldn’t necessarily be in the best interests of the sector at large. 

• Meanwhile, analysts should expect more job-hopping by airline executives during the pandemic-related revenue crisis.
• Investors should also expect to have to learn new industry jargon after having taken some time in recent years to master the intricacies of NDC, or the new distribution capability.

One of Radcliffe’s proudest moments represents some of the overall trends in airline tech, regardless of the outcome of the One Order project.

• Radcliffe cited the example of United’s previously announced integration with TripLink, a product from travel-and-expense management software specialist Concur.
• After the integration, corporate customers using TripLink could capture corporate or other bookings that their travelers made on United’s or other channels and then have the data synced with their Concur account. That allowed for seamless expensing and monitoring for company policy compliance.
• “We were the very first airline to launch Triplink globally,” Radcliffe said. “I’m very proud of that. It was a heavy lift, and it touched so many parts of the airline, including the website, app, and shopping engine.”
• “We had to make sure that the private fares that the customer wants and the ancillaries that you’ve negotiated to be included are there — and that we could accept any given corporation’s preferred method of payment.”
• Radcliffe expected to see more projects like that continue at United.

In Brief

All-Star Investors Katzenberg, Thiel, and Tosi Take Stake in Travel Startup Flyr

Prestige investors Jeffrey Katzenberg, Peter Thiel, and Laurence Tosi have taken stakes in Flyr, a startup that helps travel companies boost their revenue. [Skift]

Private Equity Backs Travel Upgrade Startup Plusgrade to Do Acquisitions

Expect more travel tech companies to mimic Plusgrade and get private equity backing to be able to do the acquisitions they need to grow during the recovery. [Skift]

Advance Purchase Versus Flexibility for Visitor Attractions

Covid restrictions pushed many attractions to require advanced purchase with timed entry, but most in a survey of 1,000 U.S. travelers found that flexibility matters more to them. Worth reading by tech vendors serving the tours, activities, and experiences sector. [Arival]

Please let me know your reactions to this week’s Travel Tech Briefing and email me your news tips at so@skift.com. To share information in confidence, contact me on a non-work device via sean.f.oneill@protonmail.com.

The reports of business travel’s death are greatly exaggerated, at least in the eyes of Hilton CEO Christopher Nassetta.

Nassetta closed out the second day of Skift Global Forum Wednesday not only with optimism surrounding the recovery of business travel demand during a freewheeling interview with Skift founder Rafat Ali. Nassetta went a step further by saying business travel demand would eclipse 2019 levels in a matter of three years.

The optimistic forecast went directly against the more dire outlook on business travel delivered by other forum speakers like Airbnb CEO Brian Chesky.

“My fundamental optimism, which I think is well-founded on data, is pretty much what it was [prior to the Delta variant outbreak],” Nassetta said before adding with a laugh on the naysayers: “They have a view that supports their business model, so I guess I’ll have one that supports mine.”

It isn’t necessarily blind optimism driving Nassetta’s upbeat recovery forecast. The company’s business transient demand already recovered to 75 percent of Hilton’s pre-pandemic performance.

The strong recovery isn’t because major financial and consulting firms were exclusively traveling to Hilton properties. It is because 80 percent of the company’s business transient travel clients are from small and medium-sized companies.

“They don’t have the luxury of saying they’re not going to travel,” Nassetta said. “Big businesses are a small part of our business.”

Finding Momentum

The business travel demand outlook isn’t the first time Nassetta has been a sunnier presence in the travel orbit. He was among the more optimistic travel CEOs when it came to what potential impact the Delta variant might have on bookings heading into fall — labeling the variant an “easily manageable” risk during the company’s second quarter earnings call in July.

“We’re not oblivious to the Delta variant and things that are going on in the world, but we’re confident because we think we will power through that,” Nassetta added on that summer call. “The trends that we see real-time are very strong and improving. We feel really good about that going to happen in the fall.”

He defended those statements Wednesday but also admitted there had been some setbacks in what had generally been a strong recovery momentum over the summer.

“My big picture view then was, as we get to the end of this year and into early next, we are on a solid road to recovery and I think we’ll continue to see pick up in the segments that have been lagging,” Nassetta said. “If you dive a little deeper to where we are in this exact moment relative to where I would have hoped then, we’re a little behind, but that doesn’t change my view.”

Data does suggest the Delta variant ate into a mid-week occupancy rate recovery in the U.S. Mid-week occupancy rates for the top 25 U.S. hotel markets steadily declined from more than 67 percent in late July to just shy of 56 percent at the end of August, according to STR. Mid-week occupancy rates in the largest U.S. cities are typically dominated by business travelers.

But any Delta-related decline in U.S. gateway markets like New York City and San Francisco could be offset later this year by the reopening of U.S. borders to vaccinated international travelers. The Biden administration announced the plan this week, and it could be a major recovery windfall to hotel owners in major cities heavily reliant on international tourism.

Airlines like British Airways, Virgin Atlantic, and Latam Airlines Group each reported triple-digit increases for flights to the U.S. in the first 24 hours since the border reopening announcement.

Once again regarding the naysayers, Nassetta noted it’s never wise to base a prediction on the lowest point of a performance decline — likening it to people 20 years ago who viewed the Sept. 11 terrorist attacks as a permanent end to air travel.

“Broadly, it’s a fool’s errand to trend line off the bottom of the top,” Nassetta said.

Expedia Group used to be like a sports team where the athletes were competing against each other rather than using the same game plan. According to Peter Kern, the vice chairman and CEO, his ongoing reorganization will help the online travel conglomerate win more often.

“We’re moving away from a competitive house of brands,” Kern said when speaking at Skift Global Forum on Wednesday in New York City. He said he wanted “a simplifying universe of brands” that are “working toward a common goal.”

Expedia Group earlier this week said it was consolidating its far-flung loyalty programs that used to compete to win customer loyalties.

“The goal [of the loyalty program change] was to make it simpler for the customer to understand how to get the most value out of our brands and products,” Kern said in an interview with Skift Executive Editor Dennis Schaal. “We’re letting them earn and burn their rewards however they want.”

An additional benefit will come to Expedia Group by reduced marketing costs. In the past, brands such as Hotel.com, Expedia, and Orbitz used different loyalty programs to fight for consumer attention. That meant that the group inefficiently spent its money, especially when it fought for the same customers’ attention by buying paid search marketing ads via Google.

“I prefer to our spend money on almost anything than give it to Google,” Kern said. He added the caveat that he was commenting on the degree of usage, acknowledging that Expedia Group would continue to buy ads via Google as long as it continued to make economic sense versus other forms of marketing expenditure.

Another reason the online travel conglomerate has been reorganizing by trimming business units is that Kern is looking to close the lopsided profit margin gap with its chief rival Booking Holdings.

“They have higher margins than us,” Kern said. “There’s no question.

Yet Kern tried to pivot from that to argue that there was now “more upside” for investors by betting on Expedia Group than Booking Holdings.

“We’re like a great athlete that maybe hasn’t gotten all the best coaching,” Kern said. “But if we get everything right, we have more upside. We’re in this similar business, even though we’re heavier in air.”

Kern did have special praise for arch-rival Booking Holdings overall.

“They’re a nearly perfect machine at driving discounts through performance marketing,” Kern said. “Nobody’s better than them. I admire them greatly. But that doesn’t mean it has as much potential because, when we get it right, our machine will accelerate as we lean into our advantages.”

Kern mocked rival CEO Glenn Fogel’s much-touted concept of Booking Holdings building a “connected trip” for consumers as a novel thing.

“It’s a good set of words,” Kern said. “But we’ve been in the trip business for a long time, and we sell more multi-product trips than any other OTA [online travel agency] in the world. We’re going to keep doing it.”

He also ridiculed Booking Holdings’ loyalty program.

“There rewards program has no rewards,” Kern said. “It just offers discounts.”

In answer to Schaal’s questions, Kern said Expedia Group wasn’t talking about a subscription model for travel.

Vacation rentals will remain a growth area for Expedia Group, the executive said.

Earlier in 2021, Vrbo outpaced Airbnb in listings growth while also outspending Airbnb on advertising by 10-fold. Kern said he would continue to support the Vrbo brand.

On corporate travel, Kern weighed in on Egencia, the corporate travel arm Expedia Group. He said people shouldn’t misinterpret a deal earlier this year that made American Express Global Business Travel the company’s majority owner.

“We’re still a shareholder in Egencia, and it’s not like we’re saying goodbye to corporate travel,” Kern said. “[Egencia] has just had one of our best years in signing new business in corporate travel.”

“But we’re trying to make the businessa simpler,” Kern said.

Ultimately, Kern said some parts of the recovery of his company depend on forces beyond his control. He called on both governments and the private sector to do more for vaccine equity, a topic Skift has covered at length.

“The more people we get vaccinated, the better it is for the people, their economies, and the global economy,” Kern said. He cited a $10 million charitable donation his company made to the cause, noting that, like many travel sector companies, Expedia Group “doesn’t have bottomless pockets.”

“Maybe Google could contribute,” Kern joked. “Google has bottomless pockets.”

Although the travel industry has made numerous vows over the last year to include more diverse voices in decision making, the industry lacks real diversity regarding who makes crucial decisions affecting local communities.

That’s the message two panelists at the Skift Global Forum conveyed on Wednesday during a discussion moderated by global tourism reporter Lebawit Lily Girma centered on how the tourism industry can no longer ignore social issues. Naledi Khabo, the CEO of the Africa Tourism Association, and Jeremy Sampson, the CEO of The Travel Foundation — a non-profit organization that works to ensure tourism benefits host communities — said that diverse influential voices that support local communities are lacking. 

Leakage is a crucial issue affecting many host communities, and despite the growing push Sampson has seen for many things local, he stated the definition of what is considered local isn’t often clear. “It could be just across the street or across the border,” he said.

Sampson expressed what he considers the growing potential for “local washing,” the term he used for slapping a local label on a product. “Local isn’t always synonymous with diversity or genuinely supportive of community needs,” he said.

While Khabo has seen increased diversity around marketing, messaging and story telling, it’s a different story in regards to diversity among decision makers.

“What do our boards look like? What do our executive councils look like?” she asked

Companies are creating advisory committees featuring more diverse voices but “Advisory boards don’t have a lot of power,” she said “What’s the real change that has been performative and not window dressing?”

Sampson strongly advocates for local communities to play a leading role in the tourism product. “Communities own the table,” Sampson said, in contrast to local communities sitting at the table. “If we’re not ensuring that tourism benefits residents, local businesses and visitors, how can we say tourism really works?”

He supports an approach called destination stewardship, in which businesses and communities collaborate as equal partners in the tourism product. An example of this is the new partnership between The Travel Foundation and EasyJet Holidays, which was announced on Tuesday.

Progress being made in climate Action

Sampson also touched on an issue affecting host communities — climate change. He said more tourism entities had committed to publishing a climate action plan through the Glasgow Declaration. Furthermore, Khabo added destinations are grappling with issues brought about by climate change.

“Climate action is a priority,” she said.

Marlene Valle, a young deaf Mexican-American travel content creator, wrote off her dreams of traveling the world after losing her hearing as a child.

A Los Angeles native, she believed it would be financially demanding and otherwise an impossibility because she was deaf, Valle signed in a special video presentation at Skift Global Forum on Wednesday about what the travel industry needs to “build on the other side of this crisis.”

Valle said she initially internalized the fears others passed on to her. 

“How could I travel if I’m not going to hear everything? How am I going to navigate the airport or communicate with local people in different languages,” Valle asked herself.  

After doing some research on her own, Valle said she embarked on exploring travel adventures domestically, internationally. 

She writes about her experiences and insights in traveling as a deaf person on her blog, Deafinitely Wanderlust, to de-stigmatize deaf travel for both the deaf and hearing communities. 

What she found was, albeit challenging, deaf travel was indeed a possibility.

“I learned to trust myself and to leave behind the societal beliefs about deaf people traveling. I am deaf, and I can navigate the world,” Valle said. 

But the industry, she said, is globally designed for hearing and able-bodied travelers, making it a challenge for the deaf traveler.  

Marlene’s advice for those in the travel industry designing experiences for deaf travelers is to include them. 

From hiring deaf people to offering sign-language interpreters and asking deaf travelers their preferred mode of communication — written, reading lips, gestures, or a combination, Valle said the industry could do more to adapt travel and become more inclusive. 

She said that the little things like communicating could make travel accessible for people with disabilities. 

Being able to face a deaf person and respecting their preferred mode of communication goes a long way in making the deaf traveler feel included. For example, the pandemic and the use of masks have created a barrier for the hard of hearing and deaf communities relying on the crucial survival skills of lip-reading and seeing facial expressions.

Valle said that a solution to the mask problem is working together to adapt to the situation by either using clear masks or alternative forms of communication.  

So how can the industry be more accessible for deaf travelers? 

Valle suggests reaching out to different deaf and hard of hearing travelers or local deaf organizations and working together on making it an accessible experience. 

Additionally, developing long-term partnerships to accommodate the community’s diverse needs and keep up with the ever-evolving technology and industry.  

“Start gaining knowledge and awareness about the deaf and hard of hearing communities and learn it from us — and challenge your perspective to stop painting all deaf communities with one brush stroke,” Valle said. 

Accessible travel comes at a higher cost for the disabled, and that’s why it needs to come into the mainstream, said John Sage, the founder and CEO of Accessible Travel Solutions. 

Sage believes there are many opportunities for travel businesses and destinations to be more inclusive of People with Disabilities. 

In May, Sage authored the “Inclusive and Accessible Travel Guidelines” report for the World Travel & Tourism Council. The four key themes of the study are developing an inclusive and accessible system, creating safe spaces, designing an engaging and relevant system, and exemplifying inclusion and accessibility. 

Sage said while many in the travel industry are aware of the need to be accessible, few follow through on all the steps needed to become accessible truly. 

When discussing accessibility, he uses the Sage Seven keys to success in accessible travel as a framework to drive home the point for businesses. They include being accessible, showing accessible, talking accessible, leading accessible, marketing accessible, involving accessible, and standardizing accessible. 

He has found businesses employing all seven steps benefit from an increased return on investment, enhanced reputation in the disabled community, and improved customer service, Sage said. 

These are in line with Valle’s suggestions at the Skift Global Forum, including asking the community for feedback on accessibility and providing close captioning videos or transcripts for podcasts.  

Based on the Sage Seven, Sage also created 27 key focus areas for businesses and 16 for destinations on developing inclusivity. A key question for destinations is how they can make it easier for disabled travelers to visit?

From training and marketing to having hotels and attractions audited for accessibility and clearly posting accessibility information and options for public transportation to having a support plan for disabled travelers if something goes wrong, destinations can work across the board to increase inclusivity.

For businesses, it includes aligning all departments to work towards a single accessibility vision, Sage said.  

“By including us into the travel industry, you’ll learn to recognize all of our different needs and challenges,” said Valle. “Together, we can make tourism accessible — and genuinely, because accessibility isn’t charity, like Haben Girma the deafblind lawyer said.”

Accessible travel shouldn’t be something to be checked off a list. Instead, Valle said, it’s a human right.

It’s an investor’s market during the fits and starts of the Covid pandemic, and the easiest time to invest in travel.

That’s the view of Greg O’Hara, founder and senior managing director of Certares, the private equity firm that owns Internova Travel Group, has a joint venture with American Express in their business travel unit, and recently helped lead Hertz out of bankruptcy.

In an online interview Wednesday with Skift founder and CEO Rafat Ali, who was presentat Skift Global Forum 2021 in Queens, New York, O’Hara said his company sometimes fields 5-10 calls per week from CEOs looking for investments.

O’Hara claimed he doesn’t need to make outbound calls any longer sniffing out potential companies to invest in or acquire. “Now we are probably passing on more things that we have ever done before,” he said.

O’Hara said it is easy to find out which are the good companies to invest in, and to structure deals fairly for both the target companies, and investors seeking attractive returns.

Of course, not all investments are winners, and scouting attractive investment targets are definitely a tad more complicated than O’Hara is letting on, although the current market environment may have certainly made things easier for investors.

The interview theme was “Investor Predictions on the Future of Travel.”

Ali asked O’Hara whether he’s down on “buzzy” travel startups. O’Hara replied that “the majority” are overvalued and may not be worth the $5 billion to $15 billion price tag they are trying to command.

O’Hara said Paul English’s Lola, which had a partnership with American Express Global Business Travel, might have made a success out of the business travel startup had the pandemic not dashed its plans.

Certares, the private equity firm and travel industry powerhouse with its joint venture in American Express Global Business Travel, ownership of Internova Travel Group, stakes in Latam Airlines and Azul, and others, recently joined with Knighthead and Apollo to co-lead Hertz’s reorganization and bankruptcy exit.

Will Business Travel Be Back?

O’Hara predicted that business travel would be operating at 75 to 80 percent of 2019 levels by the end of 2023.

“We don’t see any data that would indicate otherwise,” O’Hara said, adding that such a reduction is a massive shift.

O’Hara, who is a Tripadvisor board member, is bullish about subscription travel finding a more solid place in the sector despite hotel chains mounting resistance to the current version of Tripadvisor Plus.

A positive thing about subscriptions is that just about every travel sector is willing to try them, he said. For example, airlines might offer subscription plans to enable frequent flyers to achieve various status tiers, O’Hara said.

On the SPAC, or special purpose acquisition company front, O’Hara argued that the boom isn’t over, although more regulation is in the offing, and there are “silly valuations” that result in companies trading well below their issue prices after a time.

“Most companies should be indifferent to an IPO or SPAC, in my opinion,” O’Hara said.

Google’s plan to provide information on a hotel’s sustainability practices offers transparency amid the climate crisis. But non-participating hotel owners don’t need to worry about their placement on the search engine.

Google will put an eco-badge of sorts next to a listing if sustainability-minded firms like GreenKey or EarthCheck have highlighted a hotel for its positive impact with environmental practices. Potential guests can even find out property-specific sustainability practices through the new feature, which will also be on Google Travel.

Transparency is one thing, but the new sustainability metric isn’t expected to hold weight on how high up a property would appear on a search. Beyond saying sustainability is the right pursuit, Google leaders aren’t publicly offering much in the way of an incentive to opt into the new initiative.

“There are a lot of aspects that go into a ranking,” Richard Holden, managing director of Google Travel, said Wednesday at Skift Global Forum while declining to offer up more details regarding the status quo that will continue to dictate where a property shows up on a search. “Most are [from a] quality perspective.”

Hotel companies like Hilton and Accor have already contributed their sustainability information for the new platform, and individual property owners can provide their details through their Google My Business profile, Skift executive editor Dennis Schaal reported this week. There are signs the race to be the most sustainable hotel brand is the latest competitive streak for the hotel sector, at least optics-wise.

Accor this week joined the Sustainable Hospitality Alliance, a global organization aimed at developing sustainable travel experiences and reducing the industry’s environmental impact. Hilton, Hyatt, IHG Hotels & Resorts, and Marriott are already members. Marriott earlier Wednesday at Skift Global Forum went a step further by announcing a pledge to achieve net-zero emissions no later than 2050.

Google itself even jumped into the fray, announcing Wednesday its own sustainability pledge by joining the Global Sustainable Travel Coalition. The company joins the coalition as a partner alongside founding partners like Booking.com, Trip.com Group, Skyscanner, Tripadvisor, and Visa.

“Travel obviously has an outsized impact on the world in terms of carbon,” Holden said.

One way to make an impact and get some tangible movement on sustainability might be to tether a property’s ranking to its environmental plan. But Holden reiterated Google’s eco-badge plan for hotels won’t necessarily reward early adopters of sustainability transparency on a business page. The plan is in its early stages, and Google would want to verify accuracy over time, he said.

But even the company’s verification network for the new information page relies heavily on data an individual property self-reports. The company is considering “some other checklists” in the future as an added verification step, Holden said.

“Most people look at sustainable travel and information on carbon impact and don’t know what it means, frankly,” he said while noting the confusion surrounding what things like sustainable travel and even net-zero pledges mean. “If we’re going to get meaningful impact on this, we’ve got to join forces across the industry.”

Perhaps one way to get even more meaningful impact is to provide an incentive for users to get on board.