Weekly Roundup #7: Travel, Tech and Social Media
Our Weekly Roundup marks the end of another exciting week in hospitality, so make sure to check out the latest news and stories! We covered everything, from trends to technology and we summarized it all for you. Don’t forget to also follow us on social media for even more interesting updates: we are on Facebook, Twitter, LinkedIn, and Instagram!
Until the next Weekly Roundup, have a great weekend!
TripAdvisor's total revenue rose 8% in the fourth quarter of 2018 to US$346 million and grew 4% for the full year to US$1.62 billion. In prepared remarks, CEO Steve Kaufer said the company "reinvigorated hotel segment profitability while growing experiences and restaurants, two key strategic investment areas." Consolidated adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) in the fourth quarter was up 38% to $87 million and for the full year it grew 27% to US$422 million. TripAdvisor said it now has 2.2 million accommodation listings on its site, including 1.3 million hotels, inns, bed and breakfasts, and specialty lodging and 875,000 rentals.
InterContinental Hotels Group (IHG) is further boosting its luxury portfolio with the acquisition of Bangkok-based Six Senses Hotels Resorts Spas, for $300 million cash from Pegasus Capital Advisors. The acquisition, announced this Wednesday, brings IHG’s portfolio of open and pipeline luxury hotels to 400 hotels with 108,000 rooms globally. The deal, which includes all of Six Senses’ brands and operating companies and excludes any real estate assets, does not come as a surprise. As Skift reported last October, IHG is still in the market for small acquisitions. Six Senses, on the other hand, “had been sniffed at” at various points over the past two to three years as private equity fund Pegasus “was coming under some pressure to return principal to their investors, but only if/when it made sufficient sense,” said a source.
Expedia Group finished 2018 on the upswing, reporting double-digit growth in bookings, revenue, adjusted net income, and adjusted EBITDA for the full year compared to 2017. The diverse online travel company reported gross bookings increased 13% year-over-year to nearly $100 billion for 2018. Revenue grew nearly as much – 12% - compared to 2017 to $11.2 billion, split nearly evenly between domestic and international growth. Adjusted net income was up 33% and adjusted EBITDA was up 15%. There are now more than one million properties on Expedia Group’s core lodging platform. About 200,000 of those were added in 2018, roughly twice the amount added in 2017.
Trends and Insights
ITB Berlin is undoubtedly one of the most important events of the year, for any hospitality professional! While looking forward to seeing what’s new and exciting in our industry, we are also determined to meet up with our clients, partners, and anyone interested in exchanging a thought or two. ITB Berlin 2019 gives us the chance to do exactly that and so we highly encourage you to make the most out of this amazing trade show and why not, pay us a visit at hall 10.1, booth #108. Check out this blog post to read more about the reasons why you should definitely meet us at ITB Berlin 2019.
The hotel industry could be losing up to $10 billion a year in abandoned online purchases, according to a report. The study from marketing technology firm IgnitionOne reveals that hotels might have lost out on as much as $2.4 billion in lost online revenue in the fourth quarter of 2018. IgnitionOne tracked 4.7 million hotel night bookings across 50 brands to arrive at the figure and estimates that could be as much as $10 billion for the year lost from cart abandonment. Cart abandonment is tracked over the entire quarter so those consumers who put something in an online basket but come back later are not counted as "abandoners." Further insights from the report reveal that booking rates for economy hotels are about 3% higher than the average booking rate while conversion rates for the luxury segment are the lowest.
The report gives a glimpse into that future, citing the current status of the hospitality and travel industries and forecasting how varying sectors will perform through 2019 and beyond. Although Deloitte’s Outlook doesn’t see a downturn this upcoming year, it implores hoteliers to plan long-term to keep up with that growth in gross hotel bookings. Businesses with strong plans in place for when that downturn inevitably does happen are more likely to maintain profitability. Equally as important is ensuring that when revenue generation isn’t as high, costs aren’t cut where it counts, like on talent and maintaining service levels during the downturn.
Last week, Facebook announced it is reportedly working to develop a single, unified messaging infrastructure and increasing the connection between several of their apps. The integration will allow users to communicate cross-platform even while using the individual apps of Facebook Messenger, WhatsApp, and Instagram's messaging, combining the world's 3 largest messaging platforms. Thousands of Facebook employees are supposedly hard at work, with the goal being to make the integration complete by the end of 2019 or early 2020, though Zuckerberg has said that the functionality likely wouldn't be possible until sometime in 2020 at the latest. Read more about how this change will impact the hospitality industry.
New research from the Business Travel Show has found that travel buyers are yet to be convinced by next-generation technology. More than half say they believe bots, blockchain, and augmented reality will have minimal to no impact in the next three years. Only a fifth of the 134 buyers polled said they see technology ‘significantly improving booking, saving time and money’ by 2022. However, there appears to be more faith in the abilities of artificial intelligence (AI); 18 percent of respondents believe it has the potential to ‘revolutionise’ the travel industry over the next three years.