The Innovators of Extended Stay — Skift Corporate Travel Innovation Report

Rick Schwartz  / Flickr

Traditional hotel rooms are not always the best choice for business travelers; extended stay properties are evolving to meet the needs of modern customers and homesharing companies are working to appeal to road warriors. The lobby of a Residence Inn in Vancouver, B.C. is shown in this photo. Rick Schwartz / Flickr

Skift Take: As extended stay properties and homesharing companies seek to expand their markets, will more business travelers opt for the comfort of home-like amenities?

— Hannah Sampson

The Skift Corporate Travel Innovation Report is our weekly newsletter focused on the future of corporate travel, the big fault lines of disruption for travel managers and buyers, the innovations emerging from the sector, and the changing business traveler habits that are upending how corporate travel is packaged, bought, and sold.

This week we found another reminder of the way that corporate travel is lagging behind leisure. A new study from the Global Business Travel Association shows that just 17 percent of travel policies allow travelers to use homesharing services such as Airbnb.

According to an earlier study, far more travelers — 37 percent — thought they were allowed to opt for homesharing. That discrepancy suggests business travelers might be breaking their own companies’ rules when it comes to staying at an Airbnb or similar properties.

The issue is complicated, the report points out: “For some road warriors, home shares likely feel more comfortable and less sterile than a nondescript hotel room. However, as attractive an alternative as homesharing is for many business travelers, it presents a number of considerations travel managers must take into account.”

Those include worries about safety, security, predictability, deposits, cancellation policies, and a lack of consistency.

Even as homesharing companies work to address the concerns of the corporate travel world, a longstanding business travel option is seeing increased demand. The lodging industry’s extended stay segment is evolving to appeal to younger travelers with more communal spaces and home-like environments.

How long will it take for homesharing to become widely accepted? Will Airbnb threaten extended stay, or will both see increased demand? And how will traditional hotels respond?

— Hannah Sampson, Skift 

Social Quote of the Day

hunting for a pet sitter to give my cat medicine 4x a day while I’m out of town for business travel is the most adult I’ve ever adulted.— @brickchip

Business of Buying

Alaska Air Overtakes American Airlines in Annual Loyalty Program Awards: Mileage Plan from Alaska Airlines just won as the best airline loyalty program in FlyerTalk’s annual survey — largely because of its distance-based earnings. Read more at Skift

How Extended Stay Hotels Are Pivoting Towards a New Generation of Travelers: The extended stay portion of the lodging business continues to see strong demand. But are extended stay brands doing enough to keep up with travelers’ evolving tastes and needs? And what about Airbnb? Read more at Skift

New Business Hotel in London To Test Whether Lifestyle Category Can Scale: The Ned Hotel in London wants to be known as an urban resort and not a traditional business hotel. The founders hope to define the business hotel — we mean, the urban resort — of the future. Read more at Skift

What Hotels Are Doing to Win Your Loyalty: 5 Podcast Takeaways: With so many hotel mergers in recent years, loyalty is being reimagined for bigger, broader, more diverse audiences. But can any one loyalty program appeal to all travelers? Our latest podcast dives into all the changes. Read more at Skift

Trump Travel Ban Prompts Emirates to Cut U.S. Capacity: President Trump’s travel ban was bound to have an impact on demand from the affected countries, so Emirates’ decision shouldn’t come as a shock. It will be interesting to see if there is any sort of reaction from the U.S. carriers that have been so critical of the Gulf airlines. Read more at Skift

Safety and Security

IHG Reveals Second Credit Card Data Breach Occurred in 2016: This is yet another reminder for the hotel industry about the crucial importance of cyber security. Read more at Skift

U.S. May Tighten Visa Waiver Program, Homeland Security Chief Says: Terrorism is a real concern, but if the U.S. rolls back the visa waiver program, it could have major repercussions for the tourism industry. And that’s a big potential problem. Read more at Skift

What Trump’s First 100 Days Tell Us About Travel’s Next Four Years: Confusion and uncertainty have become the new reality for the U.S. travel industry, and travelers around the world, following President Trump’s first 100 days in office. Only time will tell whether his policies will inflict lasting damage on U.S. travel companies and the image of the U.S. as a preeminent international destination. Read more at Skift

Disruption + Innovation

Corporate Travel Still Doesn’t Get Homesharing Despite Business Traveler Use: Business travelers and their employers want safety, quality, and consistency; if homesharing companies can provide those things, we expect more acceptance from travel policies. Read more at Skift

Uber’s Growth Is Stalling Among U.S. Business Travelers: Even if its growth has slowed gradually, Uber still has a huge advantage over its rivals in corporate travel. Its global scale, as well, bodes well for Uber continuing to grow as an option for international business travelers. Read more at Skift

Apple to Test Self-Driving Car Software on Public Streets: Apple’s taking tentative steps to join the self-driving car melee. It’s gridlock already: On the Left Coast in California 29 other companies already have permits to hit the streets to test self-driving cars. This will be the mother of all shakeouts when things get serious — and will force travel managers to pay attention. Read more at Skift


Skift editors Hannah Sampson [] and Andrew Sheivachman [] curate the Skift Corporate Travel Innovation Report. Skift emails the newsletter every Thursday.

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Alitalia Staff Votes on Cost-Cutting To Avoid Bankruptcy

Antonio Calanni  / Associated Press

An Alitalia Airbus A320 at the Linate airport in Milan. The carrier is hoping to stave of the threat of bankruptcy. Antonio Calanni / Associated Press

Skift Take: Employees of Alitalia are being given a choice: accept a wage cut or prepare to find another job. They are paying a heavy price for years of mismanagement at the airline that has put it on the brink of bankruptcy.

— Patrick Whyte

Alitalia employees are voting on whether to accept a government-brokered deal to save Italy’s flagship airline from bankruptcy.

Some 12,500 Alitalia workers began voting Thursday on a package that eased steep cuts sought by parent Etihad Airways, and which will open 2 billion euros ($2.1 billion) in investment to keep the airline afloat. Voting runs through Tuesday.

Italy’s economic development minister, Carlo Calenda, has excluded nationalizing the airline, putting pressure on workers to accept the deal that foresees wage cuts of about 8 percent, down from as much as 30 percent, and reduces the number of layoffs by about one-third to 1,700.

Calenda was quoted by the Turin daily La Stampa as saying a no vote would lead to a six-month period of extraordinary administration followed by bankruptcy.

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SeaWorld’s Last Captive Killer Whale Was Just Born

Chris Gotshall  / SeaWorld Parks & Entertainment via Associated Press

A mother orca, Takara, guides her newborn to the water’s surface at SeaWorld San Antonio in this image provided by SeaWorld Parks & Entertainment. Chris Gotshall / SeaWorld Parks & Entertainment via Associated Press

Skift Take: The birth of the last killer whale in SeaWorld’s care will bring a lot of fresh headlines about the company’s decision to end its captive orca breeding program — a narrative executives are trying to move away from with a renewed focus on non-animal attractions.

— Hannah Sampson

The last orca has been born in captivity at a SeaWorld park in San Antonio just over a year after the theme park decided to stop breeding orcas following animal rights protests and declining ticket sales.

The Orlando-based company said the orca — the last in a generation of whales bred in confinement — was born Wednesday afternoon. SeaWorld did not immediately name the calf because the park’s veterinarians had not yet determined whether it was male or female.

The mother, 25-year-old Takara, was already pregnant when SeaWorld announced in March 2016 that it had stopped breeding its orcas. The gestation period for orcas is about 18 months.

Preparing late last month for the moment, SeaWorld’s chief zoological officer, Chris Dold, told The Associated Press he expected the birth to be bittersweet, because it would be the last such event at any of the parks. But just hours after the calf was born about 3:30 p.m. EDT Wednesday, Dold said, SeaWorld staff only felt like celebrating. SeaWorld said mother and calf both appear healthy.

“These are extraordinary moments,” he said by phone while traveling to the U.S. from Abu Dhabi, where SeaWorld is developing its first new park without orcas. “It’s a tempered celebration only because we’re focused on the health of these guys.”

SeaWorld decided to stop breeding orcas, and phase out its world-famous killer whale performances by 2019, after public opinion turned against keeping orcas, dolphins and other animals in captivity for entertainment. The backlash intensified after the 2013 release of “Blackfish,” a documentary critical of SeaWorld’s orca care. It focused on the orca Tilikum, which killed trainer Dawn Brancheau in Orlando in 2010, dragging her into the pool before shocked visitors after a “Dine with Shamu” show.

Tilikum, which sired 14 calves over nearly 25 years in Orlando, died of bacterial pneumonia in January.

The newborn calf was sired by Kyuquot (pronounced ky YOO kit) at the San Antonio park by natural means. It brings SeaWorld’s orca population in the U.S. to 23. All the orcas are expected to remain on display and available for researchers for years to come in Orlando, San Diego and San Antonio.

SeaWorld has said it plans to introduce new “natural orca encounters” in place of theatrical shows. This summer, the San Diego park will unveil a new, educational attraction in a revamped pool, and new orca attractions eventually will follow in San Antonio and Orlando.

The calf will be visible to visitors either in the orca stadium pool at the San Antonio park or in two adjacent pools. Observations about the calf and Takara by SeaWorld trainers will be provided from the moment of birth to researchers trying to fill gaps in their data about wild killer whales.

Dold said veterinarians at the San Antonio park told him the calf was born normally — tail first — after about an hour and a half of smooth labor. Both orcas were swimming calmly, including taking breaths at the water’s surface, and trainers would be watching for the calf to begin nursing.

“Mom generally will rest but she can’t rest too much …. mom’s not holding onto the calf, but it’s riding in her slipstream, and that’s how it gets around,” Dold said. “Our expectation is that all of this will go smoothly, but we take none of that for granted.”

Birth control and “social management” will prevent future orca pregnancies, said spokeswoman Suzanne Pelisson Beasley. SeaWorld has not collected a wild orca in nearly 40 years, and most of its orcas were born in captivity.

Researchers have said they worry that SeaWorld’s decision to stop breeding orcas will slowly reduce their ability to study orca health, growth and behavior, limiting them in coming years to collecting data from a small pod of aging whales.

Heather Hill, a St. Mary’s University comparative psychologist who plans to monitor the sleeping habits of Takara and the calf over the coming year, said it was frustrating to see research opportunities at SeaWorld undermined by public opinion amid federal cuts to science funding.

“This will be one of the first times we’ll be able to see not just a mother with a newborn calf but also a newborn calf with siblings,” Hill said.

In a statement, People for the Ethical Treatment of Animals Executive Vice President Tracy Reiman said the mother and her calf should be retired to a seaside sanctuary.

“Throughout her life, Takara the orca has been artificially inseminated many times, separated from her mother and two of her children, and shuffled from theme park to theme park at SeaWorld’s whim,” PETA’s statement said.

This is Takara’s fifth calf. Two of her other offspring remain at the San Antonio park, while one lives at SeaWorld Orlando and another has been loaned to a park in Tenerife, Spain. SeaWorld has no current plans to separate Takara and the newborn in the future, or to move any of its other orcas, Dold said.

In March, Dold said SeaWorld remains committed to orca research and conservation, calling the last orca birth in captivity “a solemn reminder of how things can change and how things can be lost.”

This article was written by Jennifer Kay from The Associated Press and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to

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Free Report: Defining Conventions as Urban Innovation and Economic Accelerators

Skift Take: The meetings and conventions industry is evolving into a global innovation distribution channel. The challenge is mapping and measuring those long-term impacts.

— Jeremy Vargas

Get Your FREE Report!

The meetings and conventions industry is evolving into a global innovation distribution channel. Over the last decade, convention bureaus have been collaborating more strategically with their local and state governments, economic development agencies, academic and scientific institutions, and local business improvement districts to better leverage the value of conventions in their cities, especially those aligned with their regions’ high-priority growth sectors.

The collective goal among those private and public organizations is to attract more conventions in advanced and creative industries to help position their cities as economic and innovation accelerators, in an effort to attract outside corporate investment and talent more effectively in those industries.

The challenge is mapping and measuring those long-term impacts. Presently, most cities highlight the economic benefits of conventions based on the short-term hospitality and tourism spend during conventions, which are then extrapolated to show the overall impact on jobs and taxes in the region on an annual basis. However, in addition to that, there are many important long-term economic benefits, or “legacy impacts,” that conventions deliver to a city that are typically not included in traditional impact reports.

In this report you’ll learn: 

  • The rise of the Convergence Economy and its impact on meeting strategy
  • How convention bureaus are driving economic development
  • Evaluating the long-term impacts of conventions beyond the visitor spend

Get Your FREE Report!

This report was created collaboratively with our sponsor, Meetings Mean Business.

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Emirates President Insists Laptop Ban Will Not Crater Its U.S. Strategy

Kamran Jebreili  / Associated Press

Emirates president Tim Clark listens to a question during an interview about cutting flights with the Associated Press at his company’s headquarters, in Dubai, United Arab Emirates on April 20, 2017.
Kamran Jebreili / Associated Press

Skift Take: Tim Clark, president of the Dubai government-owned airline, says the cuts to the number of flights to the U.S. is temporary. He’s wearing a brave face, as U.S. airlines will lobby hard to further hobble the company’s growth.

— Sean O’Neill

Emirates remains committed to the U.S. market despite plans to slash 20 percent of its flights in the wake of tougher security and visa measures put in place under the Trump administration, the airline’s president said Thursday.

In his first interview since announcing the cutbacks, Tim Clark told The Associated Press that the Mideast’s biggest carrier has no intention of pulling out of the 12 cities it currently flies to.

He said the decision to cut flights to five cities was a temporary response to a clear drop in demand, and does not signal a desire by Emirates to halt its expansion in the world’s largest aviation market.

“This is not a permanent arrangement. … I do not see this as a paradigm shift,” he said. “Obviously our plans remain in place and we are as bullish and as confident about the U.S. markets as we have been.”

Emirates said Wednesday it was cutting 25 of the 126 weekly flights it operates into the U.S. from its Dubai hub starting next month. It blamed the move on stiffer U.S. security measures and attempts to ban travelers from some Muslim-majority nations since President Donald Trump took office.

Clark declined to detail how much of a financial hit the Dubai government-backed carrier has taken over the past three months, but he described the falloff in passenger demand as “significant.”

“It is not something that Emirates does lightly when it starts pulling capacity out of markets that it’s spent millions of dollars developing and operating,” he said. “So when it gets to this, suffice to say they are falls which cause us to make those kinds of changes.”

Emirates does not provide financial details solely for its U.S. operations. The Americas region, which also includes routes to Canada and Latin America, generated $3.3 billion in revenue, or 14 percent of total sales, in the fiscal year ending March 2016, according to Emirates’ last annual report.

The cutbacks will mean twice daily Emirates flights to Boston, Los Angeles, and Seattle will fall to once a day. Daily flights to Fort Lauderdale and Orlando will be trimmed to five per week.

Copyright (2017) Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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Bullet Train From L.A. to San Francisco Gets State Funding Despite Trump Opposition

California High-Speed Rail Authority

Supporters of the bullet train from San Francisco to Los Angeles are shown in Anaheim, California on February 6, 2017. California High-Speed Rail Authority

Skift Take: So much for a big federal infrastructure initiative. The Trump administration has blocked funding for California’s bullet train so the state is selling bonds to fund the high-speed train from San Francisco to Los Angeles on its own.

— Dennis Schaal

California isn’t letting litigation or Donald Trump stand in the way of one of the most expensive and controversial projects in the U.S.

The state on Thursday plans to sell $1.25 billion in taxable bonds to finance a $64 billion high-speed rail system, the first debt issue for construction since voters approved it nearly a decade ago. The offering marks a show of faith from officials that the project will proceed despite a lawsuit from a county and farmer opposed to it and roadblocks from the Trump administration, which has delayed a grant that would have benefited the bullet train running from San Francisco to the Los Angeles area.

The general-obligation debt, backed by California’s full faith and credit, isn’t dependent on the success of the project, the first publicly financed U.S. high-speed rail line. Lack of federal support would push more of the burden on California to finance the project, which Democratic Governor Jerry Brown says will transform the traffic-choked state by increasing access to affordable housing and boosting local economies.

“California can well afford it, and it will make our state a much better place,” he said in February in a recorded news conference to which his press office referred in response to questions. “I know we’re going up against a very red tide here of opposition. This thing is a long-term project, and one way or another we’re going to get it.”

It’s a good time for California to borrow, with its bond ratings their highest since the turn of the century since it turned a spate of deficits into surpluses. The state’s 10-year tax-exempt securities yield about 2.3 percent, or 0.24 percentage point more than benchmark debt, less than half the premium it paid three years ago, data compiled by Bloomberg show. Boosting the bond sale is the “state brand’s surging value,” said research firm Municipal Market Analytics.

After years of delay, due partly to legal challenges, construction is already underway on 119 miles of track in the Central Valley. By 2029, if work goes as planned, passengers will be able to travel at speeds of more than 200 miles an hour between San Francisco and Anaheim, south of Los Angeles, according to the California High-Speed Rail Authority.

Voters in 2008 approved almost $10 billion of general obligations for the project, and of that, about $1 billion has been sold to finance costs such as design and environmental reviews, according to the state treasurer’s office. So far, work has cost about $3 billion, with about $2.35 billion coming from the federal government.

On April 26, opponents of the project will ask a Sacramento County Superior Court to block the state from using proceeds from the bond sale for it. A victory for the opponents could lead federal officials to demand that the state pay back money it has so far received, according to bond documents circulated to investors.

Another risk: future federal grants may not roll in. The high-speed rail authority’s most recent business plan in May 2016 said it plans to seek additional funds from Washington, without specifying the amounts.

Already, a $647 million federal grant slated for the electrification of another commuter rail line, which is also needed for the high-speed system, was been suspended by Trump’s administration after California’s House Republicans asked for it to be withheld.

One of them was U.S. Representative Jeff Denham, from the Central Valley, who said he doubts the project will get additional federal dollars until there’s a full explanation of all funding sources and costs.

“If you’re going to continue to obligate state dollars that you do not have, then you’re in jeopardy of at some point the federal government calling for those notes to be due, which could then put public safety dollars at risk, other transportation dollars at risk or education dollars at risk,” said Denham, who sits on the transportation and infrastructure committee.

Under the measure approved by voters, California’s department of finance must review the funding plan for each segment of the rail before permitting the use of bond funds. It did so in March, saying that for the $7.8 billion Central Valley portion, the risks “are more limited because the bulk of funding is nearly in hand, and much work has already been completed.”

A study previously commissioned by the U.S Treasury Department under then-President Barack Obama listed the project as among 40 with major economic significance that were at risk of not coming to fruition. Under an assumption that the costs totaled $59 billion, it pegged the net economic benefits at at least $130 billion.

“There are a lot of federal questions,” said Howard Cure, head of municipal research in New York at Evercore Wealth Management. “When you don’t have the Republican contingent from your state pushing for it, it is potentially a big problem.”


©2017 Bloomberg L.P.

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Uber’s Growth Is Stalling Among U.S. Business Travelers


Uber is leading the corporate travel market, but Lyft is gaining ground in the sector over its ride-hailing rival. Skift

Skift Take: Even if its growth has slowed gradually, Uber still has a huge advantage over its rivals in corporate travel. Its global scale, as well, bodes well for Uber continuing to grow as an option for international business travelers.

— Andrew Sheivachman

Uber’s huge expansion in corporate travel in the U.S. is trailing off, according to the latest data from expense technology company Certify, perhaps signaling that Uber will face new challenges in expanding its share of the business travel ground transportation market.

Uber grew its share of corporate travel ground transportation expenses in the U.S. among Certify’s clients by just one percent in the first quarter of 2017, compared to two percent growth for rival Lyft. Uber maintains a commanding lead in business travel ground transportation, comprising 53 percent of the ground travel expenses tracked by Certify, while taxis have fallen to just 10 percent.

Lyft, while now growing at a faster rate than Uber, was only expensed by six percent of travelers.

This is the first time in Certify’s tracking that Lyft’s growth has outpaced Uber’s; Certify analyzed more than 10 million business travel receipts for the report. (Car service rides aren’t included in the data.)

“While convenience and affordability helped propel Uber to the top of the corporate traveler’s preferred vendor list, the latest… data shows how leaders in every category can just as quickly find themselves vulnerable to broader trends and growth among the competition,” said Certify CEO Bob Neveu. “It’s important to note that ride-hailing is still in its early days as an industry, one Uber essentially invented, so there’s sure to be much more change and excitement ahead.”

The report also breaks down which U.S. markets are adopting ridesharing. However, among them, New York City and Chicago are both posting the strongest numbers for taxis. Overall, ridesharing is already deeply entrenched in the habits of business travelers.

A look at pricing trends shows that the average Lyft transaction remains cheaper than both Uber and taxis.

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017
Lyft $23.53 $20.78 $21.80 $24.99 $24.36
Uber $26.41 $25.48 $22.91 $24.75 $27.62
Taxi $39.68 $39.80 $35.91 $34.62 $33.90

Check out the full quarterly report below.

Download (PDF, 144KB)

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Travel Habits of Americans: 87 Percent Haven’t Yet Messaged With a Travel Brand


The survey is part of Skift’s year-long study that looks at U.S. traveler habits from a number of angles. Skift

Skift Take: Given all the hype of about messaging, it’s eye-opening that only one out of eight American travelers say they have electronically chatted with a travel brand.

— Sean O’Neill

This week Facebook executives used their annual F8 conference to woo hotels, airlines, and other businesses into using the social network’s Messenger app as a place for them to communicate with their customers.

The company hopes its new artificial intelligence (AI) tools will make it easier for independent hotels, small chains, airlines of all sizes, and other travel suppliers to boost how customers interact with them.

Facebook says that companies of all kinds (and not just travel ones) have already doubled the number of messages sent since last year to 2 billion, thanks in part to more than 100,000 bots, which use AI to answer common questions from customers.

Messaging is not just a Facebook thing, of course. There’s also been hype around new chat-based interfaces from travel agencies like Lola, and there’s been buzz about the rollout of text-based messaging services by third-parties like Expedia and Plus hotel chains like Marriott and Hilton have been prodding guests to chat with them.

Even so, despite all of these efforts, not much messaging is yet happening between travelers and brands.

Perhaps surprisingly, Americans and travel companies have both been slow to embrace messaging on Facebook or other platforms, according to a new Skift poll using Google Consumer Surveys.

messaging 2017 travel brands skift travel habits americans 2017

Takeaway: Only about 4 percent of the population says that they have chatted with a travel brand at least a few times on a messaging app. Only about 8 percent of the respondents say that they have communicated with a travel provider once or twice using a messaging app.

Important: This survey — not served to Skift users — was administered to 2,027 members of the U.S. adult internet population in FebruaryF 2016, through Google Consumer Surveys. The methodology is explained here.

There are not vast differences in usage by age. Only 14.8 percent of 18-44 year olds have used messaging, compared to 11.1 percent of the 45-65+ demographics.

The results fly in the face of research by BCV, a social media solutions provider for hospitality brands, which says its hotel clients alone have had about 1.1 million interactions with guests on messaging platforms in the past year.

It’s not clear what explains the discrepancy. Our best guess: Maybe some travel suppliers define “interactions” to include text-based alerts about check in times, confirmations, or billing. And perhaps travelers tend to think of chats as more conversational, such as about asking to change a check-out time at a hotel via SMS.

In any case, this survey does dovetail with other market research. Other studies find that travel lags other sectors, such as retail, when it comes to messaging with customers. The U.S. as a geographic market also lags many other parts of the world when it comes to the adoption of messaging as a communications tool.

The survey is part of Skift’s 14-poll study this year that looks at U.S. traveler habits from many angles.

We’ll be releasing a survey every few weeks or so until the end of 2017. Each one, we hope, will offer new insight into how Americans are traveling — or not — this year, what their priorities are, and where they dream of going.

See our earlier question for U.S. travelers: How many vacation days did you take in 2016?

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The Travel Agents Rethinking the Brick and Mortar Retail Experience

Travel Design Lounge  / Facebook

The Travel Design Lounge in Omaha, NE incorporates food and drink into its more traditional travel agent offerings. Travel Design Lounge / Facebook

Skift Take: There are vastly fewer retail travel outlets now than two decades ago, but a few creative agents are rethinking how to buy and sell travel in the real world.

— Laura Powell

The Skift New Luxury Newsletter is our weekly newsletter focused on the business of selling luxury travel, the people and companies creating and selling experiences, emerging trends, and the changing consumer habits around the sector.

In addition to providing this weekly digest with stories that are relevant to the sector, Skift is expanding its coverage of the sector with stories like you find below.

Just when it seemed the brick and mortar travel agency was out of style, old school is making a comeback. It seems that in this day and age of information oversaturation, growing numbers of people (especially among the millennial set) are craving expert curation and advice as they make their high-end, experiential travel plans.

As the agency world experiences a renaissance of sorts, some innovative players are upping their game by reconceptualizing notions of what a travel storefront should look like. Notes David Kolner, senior vice president of global member partnerships for Virtuoso, “We have to make going to the agency an experience in and of itself by changing the physical space to meet clients where they are.”

That’s not always so easy to do, according to Keith Waldon, owner of Departure Lounge in Austin, Texas. “The agency business tends to be reactive rather than innovative,” he says. “For so many years, it had been about shrinking space to lower overhead, to the point where the industry became invisible at street level.”

But some enterprising agency operators are moving into high-traffic areas and creating environments where customers can socialize and relax. While not yet a tipping point, several agency models are hinting at what’s next.

The stereotypical travel agency is located in a strip mall and is populated by travel agents sitting behind their desks while outdated images of palm trees and beaches loom on the walls. Well, blah just doesn’t cut it anymore, as the owners of The Local Foreigner in New York can attest. Owned by four women, all millennials, the Soho agency’s snug office space features a collaborative work area and a cozy living room in which to confer with clients. No individual desks, no uncomfortable chairs.

Meanwhile, over in Germany, the Baden-Baden branch of, L’Tur, one of the country’s largest agency groups, shares retail space with Starbucks in an upscale mall. Since 2012, L’Tur customers have been able to sip their lattes while brewing up ideas for holidays with agents.

Departure Lounge in Austin, Texas ups the ante even more. In 2015, Keith Waldon opened his hybrid travel agency/coffee bar/wine bar. The downtown space, according to the agency’s website, transports customers “to the world’s top destinations via organic coffees, small-batch boutique wines, artisan chocolates and cheeses, desserts and large touchscreens that showcase the best places on earth for a future getaway.”

A few years ago, travel industry veteran Waldon felt “compelled to get travel agencies back on the street.” So, he surveyed Austinites and asked them, “Where are you sitting when you talk to people about travel?” He discovered that the answers always involved social environments.Departure Lounge doubles as an interactive social space unimpeded by desks, computers and “blocking mechanisms,” as he calls them. By opening up the space, Waldon provides customers with a comfortable place for agent interaction and has ample space to host travel-related events.

Departure Lounge is now taking off into a franchise model. The prototype franchise will open at Austin’s airport in summer, 2017 and Waldon expects other branches should be open by early 2018. While they will not have a public bar like the original location, all franchises will offer free beverage menus for clients and will be designed as upscale lounge spaces conducive to hosting events.

While Departure Lounge is going the franchising route, Travel and Transport is looking to keep things in-house as it expands its Travel Design Lounge concept. According to Jeff Cain, senior vice president of the company’s specialty divisions, “We are continuing to fine-tune the concept in the prototype location in Omaha, Nebraska (which opened at the end of 2015) before going on to target major cities.” That part of the equation likely will not take place for a year or two.

The Travel Design Lounge, although it also incorporates alcohol, coffee and food and hosts experiential travel-related events (Italian Wine Night, anyone?) differs from its Austin-based competitor in several ways. While Departure Lounge invites independent travel advisors to come into the space to consult with clients, the Travel Design Lounge has full-time agents in-house. Additionally, it relies more on alternative revenue streams. According to Cain, “while travel is definitely the biggest revenue driver, we do derive profits from our food and beverage sales and space rental.”

Of course, adding bars, lounges and the like can be expensive. As Mark McSpadden, the director of Sabre Labs notes, before anyone considers new ideas, they have to ponder whether concepts makes strategic sense. “Agencies trying to differentiate their storefronts need to consider how that translates in terms of marketing efforts and moreover, whether the changes will lead to higher conversion rates,” says McSpadden. Waldon agrees, claiming that the conversion rates for agents who meet their clients in person at The Departure Lounge is a whopping 83 percent, nearly tripling the industry rate average.

What’s next? Likely more space for in-store virtual reality. China’s Zanadu is all in on the concept. In 2016, the Chinese luxury lifestyle travel platform opened its cutting-edge Travel Experience Space in Shanghai, providing 360-degree virtual reality experiences and other high-tech travel experiences. Singapore’s Flight Centre is another leader in introducing VR to its storefronts. Thomas Cook UK is committing to virtual reality in a big way through the rollout of its new Discovery store concept, which began in earnest in 2016. Several agencies in North America are piloting VR programs with higher-end headsets like the Oculus Rift and HTC Vive. And once that becomes the norm, don’t be surprised to see the introduction of virtual reality rooms, where clients can wander as they watch — then book.

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Ryan Wolkov

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Author: Ryan Wolkov

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Flight Disruption Startup Freebird Snares Funding from General Catalyst and Accomplice


Freebird co-founders Sam Zimmerman (left) and Ethan Bernstein, CEO, have raised a fresh round of funding. Freebird

Skift Take: It’s nice when folks smarter than us land on the same dime. General Catalyst and Accomplice, the famed venture capital firms, join us in seeing promise in Freebird, which gives corporate travel agencies superpowers when it comes to rebooking travelers.

— Sean O’Neill

Freebird, a business-to-business startup whose predictive technology enables agents to sell smarter flight insurance and rebooking services, was namechecked by Skift last month twice in our lists of 17 travel startups to watch in 2017 and the 11 most interesting corporate travel startups.

This week the Boston-based company says it has received $5 million in fresh funding in an “inside round” by its previous investors. The investment round was co-led by General Catalyst, the venture firm that was early to spot meteoric companies such as Airbnb, Kayak, and ITA Software, and Accomplice, whose investments have included eDreams, KDS, and Secret Escapes.

The equity investment brings the startup’s total funding to $8.5 million.

Freebird helps the typical corporate traveler whose flight has been canceled to more quickly and cheaply rebook on another one.

The startup says it has signed up eight travel management companies (TMCs) as clients for its service. Altour, Options Travel, Safe Harbors Business Travel, Short’s Travel Management, Travel and Transport, and Upside Travel join Casto Travel and Flight Centre Travel Group (USA) as Freebird resellers. This group manages more than $6 billion in travel spend a year for clients.

Why is General Catalyst fond of Freebird? Managing Director Joel Cutler says:

“On an early-stage deal, it’s quality of founders that’s critical. This is really early-stage. It’s the quality of the two of them, Ethan and Sam, that made this. Ethan is a business model kind of guy and Sam is a total data wonk with a machine learning expertise.”

“So there’s a balance of engineering and business smarts they fit together. It was clear they weren’t going to compete on personality, and they have an instinct for explaining the business to customers in a clear way.”

To keep costs low, Freebird leverages math to assess the risk of a disruption and to price the risk accordingly.

The risk model helps the company understand the likelihood that a specific flight may be disrupted and, once a flight is disrupted, the cost to buy a last-minute, one-way ticket to replace it. The company ingests data from flight alerts, pricing, availability, and other disparate metrics to make its predictions.

The company then looks at a year’s worth of historical data for a corporate client of a travel management company to create a risk profile for those travelers and to assign a particular risk level for covering those travelers over their expected volume of travel — a bit like creating an insurance policy.

Freebird’s business takes on real balance sheet risk. Some readers may ask, “What is the risk model for the risk model?” In other words, if an unpronounceable Icelandic volcano erupts and closes airspace for a few days, would that event clip Freebird’s wings?

Ethan Bernstein, Freebird co-founder and chief executive, says it has factored that type of risk into its product and its pricing.

But sometimes models fail, and people make decisions like, say, not adequately funding political campaigns in states such as Michigan and Wisconsin because, say, their models say it’s not necessary. How can Freebird be so confident?

Ethan says that he and co-founder Sam Zimmerman are aware of the challenge. “In addition to what we’ve observed in the past, we have to check for “black swan” risks for unusual weather, sharp changes in oil prices, etc. But given that, so far, we’re not perfect, but in aggregate we will be able to predict the vast majority of things. The fresh investment will enable us to navigate anything that may come along as well.”

For a relatively small fee, the traveler gets rebooked on an alternate flight. Freebird integrates directly with the GDS, which allows it to go-live with TMC partners in less than a month with no development work required, the company says.

As of today, the primary way TMCs connect with Freebird requires no development work on the agency’s part. It is currently integrated with Sabre’s global distribution system and it has plans to integrate with other systems. Anytime an agent books a flight for a traveler within Sabre’s desktop platform, Freebird will monitor the flight without the agent or employer needing to act.

Freebird says it will be hiring aggressively to be able to handle the new work from TMCs and to make sure TMCs’s corporate clients adopt their product.

A skeptic may wonder, if such a tiny startup has been able to build a sophisticated model, why couldn’t large travel companies like airlines, TMCs, or global distribution systems duplicate the product and scale it up faster?

Bernstein says the company an edge on three counts: First is that travel is very complicated and Freebird has created a tool that is simpler to use than what others would likely build. Second is that Freebird has hired Ph.D.’s with specialized knowledge that gives them a lead in tackling the hard risk modeling work “with a level of sophistication that’s required to scale.” Third is that Freebird is giving complete focus on this problem, whereas likely competitors would likely have divided attention.

The company believes it has achieved “product/market” fit and that the name of the game now is execution so that it will be able to scale.

Ellen Keszler, a Freebird investor and advisor, says, “It’s rare that a product is a win-win for everyone in the travel ecosystem… and Freebird seems to be one. There is no villain, other than the inefficiency of flight disruptions.”

Ryan Wolkov

PRC Time Shares

Author: Ryan Wolkov

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