Indian Agency Goomo Raises More Than $25 Million: Travel Startup Funding This Week

Radisson Blu Plaza Delhi

Radisson Blu Plaza Delhi’s contemporary facilities and free WiFi appeal to corporate travelers of the kind targeted by Goomo, a travel company in India that has received a substantial private equity investment. Radisson Blu Plaza Delhi

Skift Take: Private equity aims to scale up an Indian agency with a core business traveler clientele, while two rival subscription airlines combine, and a clone of Airbnb for gay travelers receives funding. Clearly, some investors favor companies that focus on niches.

— Sean O’Neill

Each week we round up travel startups that have recently received or announced funding. The total raised this week was more than $44 million.

>>Private equity fund Emerging India recently took a majority stake in the 27-year old Indian travel agency Orbit Corporate and Leisure Tours.

The Mauritus-based fund believes it can bring the Mumbai-based, offline travel agency into the online era with the help of investment, new executives, and a multi-pronged business strategy.

Emerging India has created a new brand, Goomo, for the combined entity.

The fund has invested $25 million to date in the combined Goomo operation.
It has pledged an additional $25 million if the company meets its targets.

Goomo (formerly Orbit) has 14 domestic stores and specializes in travel services for Indian companies, such as running trade fairs and MICE (Meetings, Incentives, Conferences, and Exhibitions).

In March, the new brand Goomo also launched a consumer website that sells flights and vacation packages. The online travel agency will soon offer hotels and other products via its website and planned mobile apps.

The fund installed Varun Gupta as chief executive in November, after an 18-year career at GE, Deloitte, and KPMG that included several director roles for operations. He has staffed up the company, which has more than 250 employees.

>>Evolve Vacation Rental Network, a Denver-based vacation rental management company, has received $11 million in a Series C financing round.

The round was “led by funds and accounts advised by T. Rowe Price,” Evolve said, and included participation from Annox Capital, Allen & Company, and PAR Capital Ventures. Evolve’s total funding is now $23 million.

Evolve intends to use the capital to ramp up its techplatform for its 4,000 properties under management and on its marketing and booking tools. The company charges owners a booking fee of 10 percent.

The $100 billion managed property sector within vacation rentals came into the spotlight this year after Airbnb acquired Luxury Retreats.

>>Misterb&b, launched in 2013 in Paris, is a short-term rental platform aimed at lesbian, gay, bisexual and transgender travelers — though its marketing seems directly almost entirely at gay men.

It has closed an $8 million Series A investment round, bringing the total it has raised to date to $10.5 million.

The company participated in 500 Startups, one of the largest accelerators in Silicon Valley.

The business model is the same as Airbnb’s. Misterb&b takes a cut of 16 percent on each booking, plus some advertising.

The private company does not disclose its revenue but says it has a lot of repeat customers who use the site about three times a year, on average.

Its main difference with Airbnb — apart from its size and lack of brand awareness — is that it doesn’t cut deals with property managers, and emphasizes properties owned by individuals.

>>Surf Air, a subscription-based service for private jets, has acquired one of its main competitors, the startup Rise, for an undisclosed sum.

Skift anticipated such a possible outcome in 2015, when we noted both the close ties between the two companies founders and the difficulty of getting traction in this market.

Two years after launching its first flight, Dallas private jet subscription startup Rise will become part of a California company with similar aspirations to expand to more cities and lure high-value business travelers away from commercial airlines.

Santa Monica-based Surf Air has a members-only model that flies Pilatus PC-12 turboprops on the West Coast. It will rebrand the Rise flights, which focus on Texas and southeast U.S. region.

Rise claimed that it has about 850 members who pay about $2,000 per month and that its flights were three-quarters full on average. Surf Air makes similar claims.

The deal is an early sign of looming consolidation in the sector. Wheels Up, membership subscription service, has about 70 planes covering the U.S. northeast, a region that would complete the Surf Air network. Its managing director is an investor in Surf Air.

Surf Air would like to expand to Europe by the end of this year.

See Skift’s first-person account of Surf Air.

Check out our previous startup funding roundups, here.

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UAE Steps Up Pressure on Qatar By Closing Airspace

Hamad international airport

An aerial view of Hamad International Airport in Qatar. The United Arab Emirates banned all international flights serving Doha from flying through its airspace. Hamad international airport

Skift Take: This dispute isn’t going away and Qatar’s influence in the region (as well as its importance to the west) means it has the potential to be very serious.

— Patrick Whyte

The United Arab Emirates banned all international flights serving Doha from flying through its airspace in an effort to deepen Qatar’s isolation, the latest in a series of unprecedented measures by the Saudi-led alliance that risk squeezing the country’s economy and finances.

U.A.E.’s airspace will be closed to any planes flying to or from the Qatari capital until further notice, the civil aviation authority said Thursday in an emailed statement. The move expands on an earlier ban on direct flights between the two countries and U.A.E. travel restrictions outlined Wednesday on Qatari passport-holders and citizens of other nations who have Qatari residence permits.

A senior U.A.E. official said on Wednesday that the alliance made up of his country, Saudi Arabia and Bahrain was ready to impose more sanctions unless Qatar changes policies supporting extremist groups — charges that Doha denies. Saudi Arabia’s central bank has ordered lenders in the country not to increase their exposure to any Qatari clients, according to people familiar with the matter. The regulator also told banks licensed in the country that they should not process any payments denominated in Qatari riyals, the people said.

Additional punitive measures “could include restrictions on capital flows, which would be negative for Qatari banks’ liquidity and funding,” Moody’s Investor Service said in a report. “In a scenario of a rapid loss of confidence from international investors and depositors from other GCC countries, the government might have to step in to support domestic banks.”

Credit Rating Cut

Saudi Arabia, the U.A.E., Bahrain and Egypt severed diplomatic ties with the Gulf Cooperation Council member on Monday as well as any air, sea or land links. They accuse the small Gulf state of supporting Sunni extremist groups and Iranian-backed militants to destabilize the region.

S&P Global Ratings this week lowered Qatar’s long-term rating by one level to AA-, the fourth-highest investment grade, and put it on negative watch on concern the dispute will weaken its finances. Moody’s had taken a similar action before the crisis broke out, citing uncertainty over its economic growth model.

Anwar Gargash, the U.A.E. minister of state for foreign affairs, told Bloomberg in Dubai that Qatar needed to pledge to overhaul its foreign policy for any mediation to succeed. Leading the efforts to defuse the crisis is Kuwaiti ruler Sheikh Sabah Al-Ahmed Al-Sabah, who’s been shuttling Gulf capitals for talks. He met Qatar’s emir, Sheikh Tamim bin Hamad Al Thani, in Doha on Wednesday.

U.S. President Donald Trump, who initially came out in support of the Saudi-led action, called Sheikh Tamim and offered to host talks between the U.S. allies.

Qatar’s Influence

Qatar is the world’s No. 1 exporter of liquefied natural gas. Its $335 billion sovereign wealth fund owns stakes in global companies from Volkswagen to Glencore and Barclays. Its influence goes beyond money. It’s also a home to the forward headquarters of CENTCOM, the U.S. military’s central command in the region.

“The President reiterated that a united Gulf Cooperation Council and a strong United States-Gulf Cooperation Council partnership are critical to defeating terrorism and promoting regional stability,” the White House said in a statement.

With all adjacent Arabian Peninsula nations now either shutting their airspace to Qatar or demanding advance clearance, planes serving the country are now limited to routes to its north, via Iran and Kuwait. That disrupts flights to Doha particularly from Africa, India and Southeast Asia, which would usually use shortcuts over Saudi Arabia and the U.A.E.
Qatar Airways said Wednesday that it chartered four flights to return passengers from Saudi Arabia to Doha via Kuwait or Oman, which haven’t cut ties.

Otherwise, “global operations are continuing to run smoothly and remain unaffected,” Chief Executive Officer Akbar Al Baker said in a statement at the time. The carrier didn’t respond Thursday to requests for comment on the U.A.E.’s move.

The state-owned airline has been the biggest victim of the Gulf travel bans, another blow to its earnings amid woes including the U.S.’s prohibition on laptops in plane cabins and reduced premium-class travel as low oil prices hamper the region’s economic growth.

©2017 Bloomberg L.P.

This article was written by Deena Kamel Yousef and Zainab Fattah from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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Four Seasons CEO Sees ‘Airbnb Effect’ in Luxury Hospitality

Mark Sommerfeld  / Bloomberg

J. Allen Smith, Four Seasons Hotels and Resorts CEO, thinks Airbnb could be a formidable player in the luxury space. Mark Sommerfeld / Bloomberg

Skift Take: At a time when most hotel CEOs say Airbnb isn’t a threat at all, Smith is one of the few who seems to be paying much closer attention than most to its potential impact on his company’s business.

— Deanna Ting

Four Seasons isn’t taking Airbnb’s push into high-end lodging lightly.

“I would be naive to say that we aren’t being mindful of the Airbnb effect,” Four Seasons Hotels and Resorts Chief Executive Officer Allen Smith said in an interview about the Toronto-based company’s history and future outlook. “It’s just another example of the speed in which the market is changing and the manner in which we need to be prepared to respond to it.”

The five-star hotel chain created six decades ago by Isadore Sharp continues to expand worldwide while working to preserve its top-tier reputation in an industry increasingly driven by millennial expectations and tastes. The company, jointly controlled by Microsoft Corp. co-founder Bill Gates and Saudi Prince Alwaleed Bin Talal, has introduced a mobile app that will include a chat function and plans a guest recognition program to bolster loyalty. In an era where plush bathrobes and free high-end toiletries are standard, the focus must be on refining guest service and staying on top of emerging trends, including the rapid ascent of digital disrupters, according to Smith.

“If you don’t, the risk is that the relevance of your brand diminishes over time regardless of what a great company this is,” Smith said last week from the restaurant at the closely held company’s Four Seasons hotel in Toronto.

Luxury Deal

Smith’s comments are a departure from the party line typically espoused by upscale hotels — that Airbnb Inc. opens up a new market but doesn’t compete directly with them. The San Francisco-based firm moved closer to becoming a full-service global travel company in February when it bought Montreal-based Luxury Retreats, a manager of high-end rentals and services, in a deal valued at $300 million. It marked the home-sharing service’s biggest acquisition yet.

Luxury rentals are a main growth area for the vacation market, which has seen online home-sharing companies muscle in on traditional lodging providers.

Airbnb’s push into the space gives it further potential to “capture the millennial category at all price points,” Jan Freitag, a senior vice president at Hendersonville, Tennessee-based STR Inc., a hotel data and analytics firm. The customer who initially used Airbnb to save money now sees the option to splurge, he said.

Rental Competition

The Luxury Retreats purchase puts Airbnb in competition with Four Seasons’ own rental service it operates through partnership with its private residential owners, allowing the company to offer a more secluded setting for resort guests.

“It’s a very important part of our business and something that we want to continue on,” said Smith, 59, former head of Prudential Real Estate Investors who was appointed Four Seasons CEO in 2013. He oversees the company’s growing number of properties, which now stand at 105 hotels in 43 countries.

Of the 33 Four Seasons-branded private residences worldwide, 17 participate in the company’s vacation rental program. The hotelier expects further rental growth as it adds resorts to its roster, including a recently opened property in Anguilla and an upcoming project in Los Cabos, Mexico.

Airbnb also has the potential to influence pricing across the board.

“Ours is a business of supply and demand, so anything that introduces additional supply tends to put pressure on rates,” Smith said.

The Four Seasons CEO also foresees Airbnb becoming a bigger player in providing services as opposed to just accommodations.

Meaningful Force

“Will they match us head to head in terms of service quality? Probably not,” Smith said. “That’s pretty hard for people to do, but I wouldn’t underestimate their ability to get pretty close. I think that they will be a meaningful force that we have to reckon with.”

One looming question is whether Airbnb ultimately positions itself “to control hotel inventory that they can then distribute,” Smith said.

“They are a distributor of inventory, however you want to describe it. Whether it’s in someone’s home or it’s within a hotel it’s all the same in many respects,” Smith said. “I don’t underestimate at all the impact they’ll continue to have on the marketplace, whether it’s at the more mid-market or the higher end of the market.”

If Airbnb goes public and begins to feel more pressure to boost growth, the easiest way is to allow regular accommodations on its system, according to Freitag.

“The scary scenario for the hotel industry is for the millennial user who is used to using the Airbnb app to book their accommodations to not have to leave that walled garden and suddenly have the full travel experience,” Freitag said in an interview.

Meanwhile, Smith said he can’t point to any business the company is losing because of Airbnb and that he is fully confident in Four Seasons’ outlook.

“There’s ample opportunity for us to grow in a meaningful way, but it’s not growth at any cost,” he said.

©2017 Bloomberg L.P. This article was written by Kim Chipman from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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Certification and Accreditation: The Opportunity for Guest Assurance

The Internet reset the Vacation Rental (VR) market’s product life cycle as it took what was once a simple cottage  industry and exploded it into a multibillion -dollar business that spans the globe. A guest in Peoria, Illinois, can now rent a private home in Stockholm, Sweden—in minutes. The advantages that technology has brought to the […]

The post Certification and Accreditation: The Opportunity for Guest Assurance appeared first on VRM Intel.

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Business Travel Growth Is Expected to Rise in U.S. Despite Recent Dip

Kiichiro Sato  / Associated Press

The outlook for increased travel is still strong for the U.S., according to U.S. Travel. Passengers walk to their gates through the terminal as American Airlines planes wait to depart at O’Hare International Airport in Chicago. Kiichiro Sato / Associated Press

Skift Take: International travel to the U.S. will continue to grow this year, according to U.S. Travel. But given the unpredictability of the U.S. government at this time, the outlook could get worse in a hurry.

— Andrew Sheivachman

Solid evidence of a so-called Trump Slump in travel to and from the U.S. has been scant, with travel companies reporting they’ve seen no decrease in flight ticket sales or hotel stays. Other groups, like Foursquare, say they have research showing fewer international travelers in the U.S. this year compared to last.

Who should you believe?

The latest edition of The U.S. Travel Association’s monthly Travel Trends Index provides evidence that travel volume to and within the U.S. increased slightly in April year-over-year; at the same time, the report projects that international inbound travel growth will lag behind domestic growth through the late 2017. The rate of growth in travel volume is slowing overall, but it’s still growing and travel demand is expected to increase through the next six months.

International travel to the U.S. grew four percent year-over-year in April, in something of a surprise given the announcement of President Trump’s travel ban executive order on Jan. 27.

“Are we surprised by this data? The honest answer is yes,” said U.S. Travel Association president and CEO Roger Dow in a statement. “There have been many claims that the administration’s actions on travel have tarnished America’s brand abroad, but we’re seeing hard economic evidence of the U.S. travel sector’s remarkable resilience.”

Diving deeper into the data, business travel stumbled in early 2017 after seeing negative growth in February and April along with a flat month in January. It’s expected to see a small but steady increase over the next six months.

U.S. Travel believes that the business travel slowdown was only a temporary phenomenon, with the April slowdown being attributed to the timing of Easter this year.

“Leisure travel led the domestic market once again in April, as the domestic business [current travel index] declined,” states the report. “However, this decline in business travel should be interpreted with caution: Business travel was stronger in March than in April in 2017, since the Easter holiday fell in April this year, and stronger in April than in March in 2016, because Easter 2016 fell in March. This is what drove a particularly strong [current travel index] reading (based on year-over-year growth) in March 2017 and a negative reading in April 2017.”

The worst outlook in the report is for domestic travel growth, which is expected to remain slightly negative for the next six months.

“This month’s [Travel Trends Index]—the first to reflect international traveler sentiment after January’s presidential order on travel and immigration, due to search/booking lag times—showed that international travel to the United States is still growing, despite a strong dollar and heated political rhetoric,” said U.S. Travel senior vice president of research David Huether. “April’s data is encouraging, because it indicates that international visitors are still drawn to all the U.S. has to offer business and leisure travelers.“

Read the full report below.

Download (PDF, 258KB)

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Chefs+Tech: Grocerants Might Be the Future of Casual Dining

Whole Foods

Whole Foods Market’s first fast-casual concept, The Roast by Whole Foods, opened recently in Atlanta. Whole Foods

Skift Take: As interest in casual dining wanes, everyone’s betting big on fast-casual, including Whole Foods. Since fast-casual + grocery store= grocerant, Whole Foods’ latest move as as trendy as it is smart.

— Kristen Hawley

chefslogo_use-for-socialEditor’s Note: In September we announced that Skift was expanding into food and drink with the addition of the Chefs+Tech newsletter. 

We see this as a natural expansion of the Skift umbrella, bringing the big-picture view on the future of dining out, being fanatically focused on the guest experience, and at the intersection of marketing and tech.

Bonus: We now publish C+T twice weekly.

Imagine a Future Full of Grocerants

The “grocerant” is a term for those grocery store-restaurant hybrids that are popping up everywhere from midtown Manhattan to midwestern supermarkets. A new fast-casual opening from Whole Foods in Atlanta could be considered a grocerant by definition, as it’s physically attached to a Whole Foods. It’s a new concept called The Roast by Whole Foods Market, and features a menu created by noted local chef (and former Top Cheftestant) Kevin Gillespie, a fast-casual operating model, and enough design-y details to keep the millennials happy. You look at Eater’s well-composed photos of subway tile, piles of wood, draught beers, and an actual DJ booth and tell me it’s not millennial bait.

While Whole Foods has been quick to defend the fact that, in its nearly 37 years of existence, its stores have always included a prepared foods and salad bar section, the new crop of dining options is a little different. They often feature table service, offering the luxury of a full-service meal in the atmosphere of a casual-but-useful store full of things you want to buy. In a lot of cases, grocerants are like advertising for the market wares. Like the pasta? Aisle two. Wine? Aisle ten.

Read the recent headlines and you’ll see why this makes sense: casual dining is dying, fast-casual is popular, and grocery stores are experiencing a comeback as millennials (and others) incorporate home cooking back into their schedules. Whole Foods, though, isn’t nearly as popular as it used to be (likely a direct result of its high prices and new competition from other retailers offering less expensive organic fare). It’s possible that The Roast is a kind of hail mary because grocerants seem to be the next hot ticket — but it’s a new concept worth trying. By partnering with a local and well-known chef, Whole Foods got the branding right; the spot has only been open for a few weeks, so time will tell if it can stand on its own legs or if the grocery chain is spending a lot of money on an expansion concept that falls flat.

The Fascinating Challenge of Selling Cold Brew Coffee

Cold brew coffee isn’t simply coffee on ice, it’s an entirely different way of making coffee than most of us are used to: grounds are steeped in cold water, often overnight. It’s a time-intensive process, and making more isn’t as simple as grabbing a filter, some grounds, and some water. And it’s gaining in popularity, according to a piece in the New York Times (and basically everyone who owns a coffee shop, from one-off local spots to 13,000 Starbucks stores). Specialty roasters like Blue Bottle and Stumptown introduced the drink about a decade ago, and it caught on, according to the piece. But the drink’s popularity isn’t the full story; instead, it’s part of a supply-and-demand equation driven, at least in seasonally-affected cities like New York, by the weather.

One proprietor, with 24 locations in New York, says his business sells 10,000 servings of cold brew on a peak day, and that all iced coffee drinks make up 65 percent of sales in the summer, as opposed to 25 percent in colder seasons. That’s a major difference in supply, completely dictated by something you have zero control over: the weather. On the plus side, cold brew is fairly stable, and can be stored for a time without worrying about flavor changes, unlike hot coffee — or hot coffee put into the fridge, a.k.a. the iced coffee of yore. It can also be kegged and tapped exactly like a beer. The Times piece also dives deeper into cold brew — who knew it could be so polarizing? (Its critics say its lack of acidity is a flaw, among other issues.) Still, the fact that this new beverage is completely changing the way many coffee shops operate, forcing them to adapt their offerings, timeline, and pay a lot more attention to the weather is telling. Coffee is coffee, but even the most universal food items aren’t immune from disruption.

Instagram Fits in Everywhere, Including the Fine Dining Room

Restaurants+Instagram is a story that’s been told a few times, but as the photo-sharing/posting phenom continues to grow, its relationship to chefs and restaurants is evolving. Grubstreet takes a look at how fine dining chefs have embraced the medium, even if their restaurants are only aspirational for most of their followers. By now, chefs and restaurateurs know the ripples from just one Instagram post can spread far and wide — fast. Chefs who use it to post daily specials see dining room guests that come in same-day asking for the dish they saw on Instagram. It’s an invaluable marketing tool for the restaurants, but diners can snap photos and turn certain dishes into immediate classics, tempting others to book even the priciest reservations to try it for themselves — not without snapping a photo first, though. (This writer sure does have a photo of the edible Alinea balloon in her Instagram feed.)

The piece notes changes that have come about, potentially out of the Instagram era — more focused restaurant lighting, white marble tables, custom plates decorated with the restaurant’s name — but also that artistic, thoughtful, and sometimes provocative plating existed long before the Instagram exploded. Wylie Dufresne’s New York temple of molecular gastronomy WD-50 opened in 2003 and closed in 2014, with its most formative and famous years well before photo snapping and sharing in the dining room became commonplace.

The benefits come with some disadvantages, too. Chefs must live up to the hype created by perfectly-staged, perfectly-lit, filtered images of their best dishes. And then there’s the issue of copycats — one chef quoted says, “Noma posts a new dish, and you can start to see copies within days.” Still, it doesn’t completely upend the way chefs develop their menus and do business, though the lightning fast speed at which information is shared has certainly sped up the process.

Digestifs

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Video: Travelsify and Almundo.com CEOs on Trust and Transparency in Travel Search

Skift Take: In this video from Skift Forum Europe, Travelsify CEO & Co-Founder Bruno Chauvat and Almundo.com CEO Juan Pablo Lafosse discuss the evolution of personalization and why trust is the new currency in travel.

— Matt Heidkamp

Travelsify CEO & Co-Founder Bruno Chauvat wants to evolve the the idea of personalization in the travel industry.

Speaking on a sponsored panel with Almundo.com CEO Juan Pablo Lafosse at Skift Forum Europe at Tobacco Dock in London, Chauvat told SkiftX Editor Greg Oates that that travel brands should think of personalization as a two-sided coin of traveler data and the product experience. Most important to the equation is creating a foundation of trust with customers.

“Personalization is about trust,” Chauvat sad. “You cannot keep customers if they don’t trust you and it’s of paramount importance that trust is delivered through at least two elements: transparency and an explanation about why recommendations are made.”

Chauvat envisions a more multidimensional search experience where customers can find what’s interesting to them based on specific attributes, which he calls “travel DNA.” Rather than relying on recommendations made by booking sites, consumers should be able to find a match for exactly what they’re looking for based on experiences defined by like-minded travelers, taking mood and design sensibility into account.

 

You can watch the full discussion below.

Note: Initial planning is in full-swing for our flagship event Skift Global Forum, which will be held September 26-27 in New York City. We wanted to make sure our most loyal Skift readers were able to purchase their tickets early and were rewarded for doing so. That’s why we’ve re-opened up our previously sold out early bird discount for an additional 35 tickets. Attendees can now save $800 per ticket on the largest creative business conference in travel.

Read more coverage of Skift Forum Europe 2017.

At this year’s inaugural Skift Forum Europe in London, travel leaders from around the world gathered for a days of inspiration, information, and conversation on the future of travel.

Visit our Skift Global Forum site for more details about 2017 events, including our New York City event September 26-27.

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Why a Seamless Payment Strategy is Key to Selling More Ancillary Services

Skift Take: Travel providers who want to provide customers with a seamless travel experience should no longer think of the payment process as an afterthought.

— Jeremy Vargas

Online payments have advanced significantly in recent years, making it easier than ever for consumers to buy online. The travel industry has lagged behind other industries when it comes to making the online payment experience as seamless as possible––but this shortcoming can also be seen as an opportunity for travel companies that are ready to put payments at the heart of their customer strategy.

Worldpay recently examined how travel companies can set themselves apart from the competition using a frictionless payment process in its report, “The Seamless Travel Experience.” Here are some solutions Worldpay offers:

Optimize the online payment journey: Companies often assume that the payment page is the only time when a customer considers how they’ll pay for their trip––but this is far from the truth. It’s vital to reassure customers that their preferred payment will be accepted from the moment they land on a website, in addition to optimizing shopping basket recovery methods if something goes wrong, providing stellar customer service, and ensuring customers that payments are secure. A browser only becomes a customer when they make a payment, which means travel companies need to avoid neglecting this step of the booking process.

Take a mobile-first approach: Many travel companies are behind when it comes to the mobile experience they offer their consumers. With mobile bookings making up an increasing part of overall travel bookings each year worldwide, travel companies can no longer afford to ignore the role mobile plays throughout the travel journey. Payment pages should be designed with mobile user experience in mind, should allow for easy input of personal information, and avoid redirections to third-party providers.

Work with a payment provider that’s specialized in the travel sector: Travel companies face unique challenges when it comes to online payments compared to other industries. By working with a provider that’s well-versed in the travel space, companies will have more control of the payment process and, in-turn, be able to better connect with their customers and increase sales.

Provide more additional services directly, without redirecting to third parties: Offering customers ancillary services throughout their travel journey via a seamless payment process has become a major revenue driver for many travel providers. In 2016, ancillary services contributed more than $50 billion in revenue for the global airline industry, according to a report from L.E.K. Consulting.

At the same time, many providers still fall behind when it comes to making these additional offerings as easy to purchase as possible. Airlines and hotels are especially suited to take advantage of this opportunity––for example, allowing customers to store their payment and personal information for in-flight purchases or offering spa services for purchase while checking into a hotel via smartphone.

To learn more about why a frictionless payment process is so important to the travel journey, download Worldpay’s report, “The Seamless Travel Experience.”

This content was created collaboratively by Worldpay and Skift’s branded content studio SkiftX.

© Worldpay 2017 and © Skift 2017. All rights reserved. This document and its content are proprietary to Worldpay and Skift and may not be reproduced, published or resold. The information is provided on an “AS IS” basis for information purposes only and neither Worldpay nor Skift makes any warranties of any kind including in relation to the content or sustainability. Terms and Conditions apply to all Worldplay services. Worldpay (UK) Limited (Company No. 07316500 / FCA No. 530923), Worldpay Limited (Company No. 03424752 / FCA No. 504504), Worldpay AP Limited (Company No. 5593466 / FCA No. 502597). Registered Office: The Walbrook Building, 25 Walbrook, London EC4N 8AF and authorised by the Financial Conduct Authority under the Payment Service Regulations 2009 for the provision of payment services. Worldpay (UK) Limited is authorised and regulated by the Financial Conduct Authority for consumer credit activities Worldpay, the logo and any associated brand names are all trade marks of the Worldpay group of companies.

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Skift Backstage Podcast: InterContinental CEO on Guests Who Want It All

Skift Take: Tune in to hear insight from a leading hotel executive about the quest to get customers in the door — and understand them better.

— Hannah Sampson

With 5,200 hotels around the globe, InterContinental Hotels Group works with a lot of customers. And the UK-based hotel company is fixated on what those guests want. But there’s one problem, the CEO told us: They want everything.

Figuring out how to deliver on a customer wish list that includes just about everything is a priority for IHG, one of the largest hotel companies in the world. One thing that isn’t as important? Growing just for the sake of getting bigger.

Richard Solomons, the CEO of IHG, was a speaker recently at the inaugural Skift Forum Europe in London. He also spoke to News Editor and podcast host Hannah Sampson behind the scenes in the Skift Take Studio.

He told us how IHG is trying to cater to both millennials and baby boomers, the way the company is keeping well-known brands relevant but comfortably familiar, the reason he isn’t really worried about Airbnb, and the company’s plans to expand the boutique Kimpton brand.

Though we didn’t know it at the time of the conversation in April, Solomons won’t be doing many more interviews as CEO. In early May, he announced that he is stepping down from the role on June 30.

This mini-episode is one of several conversations we’re bringing you from backstage at Skift Forum Europe.

Start listening to The Skift Podcast, today. Subscribe via iTunesSoundcloud or RSS.

Listen to all the Skift podcasts here.

 

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The Highest Paid Travel CEOs in Europe in 2016

Skift

InterContinental Hotels Group CEO Richard Solomons at Skift Forum Europe on April 4, 2017. Skift

Skift Take: Chief executive pay at Europe’s biggest publicly traded travel companies appears to have converged in 2016 with few bumper deals compared with previous years. It could just be a coincidence or might have something to do with the deteriorating economic climate and geopolitical issues.

— Patrick Whyte

Outgoing InterContinental Hotels Group chief executive Richard Solomons was the highest paid European travel CEO in 2016 from among 12 publicly traded companies that Skift reviewed.

Solomons’ total compensation increased by 7.9 percent in 2016 to $4.5 million (see chart below) mainly because of the increase in the company’s share price under his watch. Under the company’s long-term incentive plan, Solomons was handed shares worth $1.7 million. The award is also based on growth in net rooms’ supply and revenue per available room  – a popular hotel industry metric – against competitors including Marriott International and AccorHotels. At the end of June, Solomons will step down from the role and will be replaced by chief commercial officer Keith Barr.

The pay packets of the chief executives of both Merlin Entertainments and Hostelworld Group, who both saw their total compensation more than double, overshadowed the relatively modest rise of Solomons’ pay.

Merlin handed Nick Varney $2.48 million in 2016, an increase of 162.6 percent, due mainly to long-term incentives worth $1.5 million. Varney’s bumper pay deal came in the same year that UK health and safety regulators fined Merlin $6.5 million following a crash at its Alton Towers park the year before that left 16 people injured, a number of them seriously.

Another big riser was Hostelworld’s Feargal Mooney, who saw his compensation more than triple to $1.46 million. Mooney’s figure was swollen by a “discretionary bonus” of just less than $1 million, which was handed to him following the company’s stock market floatation.

CEO / Company (2016) Total Compensation 2016* % Change Net Profit/(loss) % change
Sébastien Bazin, AccorHotels $3.18 million -28.6 $335.2 million 10.3
Jean-Marc Janaillac, Air France-KLM $0.62 million† n/a $887.8 million 523.6
Carolyn McCall, EasyJet $1.89 million -76.5 $551.1 million -22.1
Feargal Mooney, Hostelworld $1.46 million 228.8 $0.88 million -99‡
Willie Walsh, IAG $3.41 million -65.7 $2.2 billion 28.8
Richard Solomns, IHG $4.45 million 7.9 $417 million -65.9
Carsten Spohr, Lufthansa $3.5 million 16.7 $2 billion -16.4
Nick Varney, Merlin Entertainments $2.48 million 162.6 $272.4 million 24.1
Bjorn Kjos, Norwegian Air $0.25 million -6.3 $133.9 million 361.1å
Michael O’Leary, Ryanair $3.61 million 33.3 $1.75 billion 79.9
Peter Fankhauser, Thomas Cook $1.56 million -71.9 $11.6 million -52.6
Fritz Joussen, TUI Group $3.42 million -74.4 $1.3 billion 203.5

*Conversions from original currencies to dollars was made on June 7
†Replaced previous Chief Executive during financial year
‡Profit in 2015 was inflated by a significant write-off of shareholder loans totalling $117 million

Falling Pay

Half of the chief executives at the companies surveyed saw big decreases in their overall compensation after enjoying bumper pay days in in the prior year. TUI Group’s Fritz Joussen and Thomas Cook’s Peter Fankhauser both took home less in 2016, mainly due to long-term incentives being paid out in 2015. Fankhauser’s potential pay deal in the current financial year has also come under scrutiny, as shareholders forced the company to scrap its bonus scheme.

IAG’s chief executive Willie Walsh suffered a similar fate but also missed out on a bigger bonus after “various external headwinds” meant the company failed to hit all its targets with operating profit below the threshold level. IAG is the parent of British Airways and Iberia.

In 2016, EasyJet suffered its first drop in annual profit since 2009 on the back of a tumultuous year that saw terrorist attacks and the Brexit vote impact its performance.
Carolyn McCall’s bonus fell by 79.4 percent to $0.24 million after “challenging business conditions during the 2016 financial year meant that performance in the year declined from the results achieved in 2015,” the airline said. McCall’s big drop can also be explained by a large long-term incentive award handed down in 2015.

CEO / Company Total Compensation 2014 Total Compensation 2015 Total Compensation 2016
Sébastien Bazin, AccorHotels $4.43 million $4.45 million $3.18 million
Jean-Marc Janaillac, Air France-KLM n/a n/a $0.62 million
Carolyn McCall, EasyJet $11.9 million $8.06 million $1.89 million
Feargal Mooney, Hostelworld $0.46 million $0.44 million $1.46 million
Willie Walsh, IAG $8.86 million $9.95 millon $3.41 million
Richard Solomons, IHG $8.53 million $4.12 million $4.45 million
Carsten Spohr, Lufthansa $2.32 million $3 million $3.5 million
Nick Varney, Merlin Entertainments $2.04 million $0.95 million $2.48 million
Bjorn Kjos, Norwegian Air $0.36 million $0.27 million $0.25 million
Michael O’Leary, Ryanair $2.03 million $2.71 million $3.61 million
Peter Fankhauser, Thomas Cook n/a $5.55 million $1.56 million
Fritz Joussen, TUI Group $4.39 million $13.38 million $3.42 million

Source: Public filings

The outlier

What is interesting about the pay packets of the chief executives of 12 big European travel companies is that they fell within a fairly narrow range – apart from one.

According to the accounts for Norwegian Air, chief executive Bjorn Kjos took home $250,000 in 2016, more than $1 million less than the next lowest paid boss.
In fact, the total amount paid to Norwegian’s 14-strong executive team was only $2.9 million.

“The total compensation level should be competitive, however, not market leading compared to similar organizations,” Norwegian said in its annual report.

It went on to say: “The remuneration of the Board and the Executive management must not have negative effects on the Group, nor damage the reputation and standing of the Group in the public eye,” and: “The CEO does not receive compensation in form of performance-based salary or bonuses, except for options in the stock option plan. The Executive management can on an individual level be awarded with a special compensation for profit enhancing projects.”

It’s not all bad news for Kjos. As well as being chief executive, he is the also the majority owner of HBK Invest AS, which, with a 24.6 percent stake, is the largest shareholder of Norwegian.

(The selection of companies was arbitrary among public companies in Europe and does not include those already covered in previous chief executive pay stories here and here.)

Ryan Wolkov

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Author: Ryan Wolkov

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