The travel industry has been significantly affected by the coronavirus pandemic, with British Airways cutting 12,000 jobs and Tui announcing that it is cutting 8,000 jobs worldwide.
The industry is calling for greater support at this time, and according to CityAM, the UK government could create a £4bn travel industry support package to help finance the large number of refunds that will be issued.
HotelRunner: Travel tech amid the coronavirus
As well as hotels and airlines, who are unsurprisingly experiencing significant disruption, the fallout is also impacting travel tech startups.
At the beginning of the year, perhaps the most well-known travel travel tech startup Airbnb looked close to an initial public offering, but has now announced that it is cutting 25% of its workforce.
This uncertainty is mirrored throughout the industry, but for some, it may also offer an opportunity to innovate. Founded in 2011, HotelRunner is a sales management and distribution platform for online travel agencies, hotels and payment providers to “find, contract, connect, and transact with each other”.
It has over 38,000 accommodation providers registered on the platform across in 193 countries.
“It’s never been busier for us as we help the global hotel economy pick itself up off its knees and fight back,” says Arden Agopyan, founder and managing partner at Hotel Runner.
“We have confidence in the travel industry’s ability to recover from Covid’s impact and continue to operate at full-steam to help the global travel accommodation sector push through the crisis. In these extremely challenging times, a company like ours has a very special responsibility. Our innovations have never been so important as the reliance is rising on new forward-looking bookings from direct channels like websites and booking engines, OTAs, and meta-search platforms.”
“We have seen occupancy in Covid-infected countries drop to less than 5%. However, we are starting to see the seeds of a comeback and the reemergence of travel interest starting from June.”
“We are used to managing the risks”
According to the World Travel and Tourism Council, 100.8 million industry jobs could be lost in 2020, and a travel and tourism GDP loss of $2.7tn is predicted. Booking, which owns booking.com and kayak.com, among others, reported a 51% drop in bookings in Q1 year on year.
However, Agopyan explains that being a startup has enabled HotelRunner to be agile at this time.
“Life of a startup founder is a rollercoaster and we are used to managing the risks under the conditions of extreme uncertainty. Of course, Covid is the biggest challenge we have encountered in our company’s lifetime but being startup founders helps us to see the opportunity in the crisis and navigate through,” he says.
“When we look at the past, many successful startups were actually started either right before, during or immediately after the 2008 crisis. We’ve kept this in mind during this time. All our team members have been working remotely during the last two months and we are finding new ways to help our partners, customers with new products and services. We are positioning ourselves as a painkiller platform and we’ll stay foundational even if we have to pivot to support the hospitality industry.
“As a profitable company, we have enough funds in our war chest to deal with the crisis. We haven’t planned any layoffs or furlough – everyone is working full-time, busier than ever.”
“Hotels are trying to cut costs during the pandemic”
HotelRunner is a Booking.com premier connectivity partner, Airbnb preferred software partner, Agoda innovative supplier, and Oracle Gold, Skyscanner and Google Hotel ads partner.
With hotels able to join the platform for free, paying 1% comission on bookings, Agopyan said that many in the industry are turning to HotelRunner as they look to cut costs but still reach customers.
“Hotels are trying to cut costs during the pandemic. As most of the software is free for the accommodations (web site, booking engine, and part of the channel manager), we’ve become a go-to provider for them. We have been onboarding hundreds of new hotels from all over the world starting from Mexico to Indonesia, even from the infected areas like Italy and Spain.”
With hotels and travel agencies currently dealing with an influx of cancellations, HotelRunner is also aiming to simplify this process.
“HotelRunner is currently being utilised to help hotels manage cancellations, take advantage of the uptick for 90+day booking and the rising interest of the domestic holidays from August onwards. We are also helping the hotels and online travel agencies to make new direct and more profitable contracts in order to prepare them for after Covid.
Although, based on the government’s lockdown easing plans announced on Sunday, hotels in the UK could start to reopen in July, there is still much uncertainty surrounding this, with the Foreign Office currently warning against international travel and those entering UK required to quarantine for 14 days.
However, Agopyan predicts that the industry could start to pick up in the coming months as lockdown eases. If this is the case, accommodation providers will need to be ready.
“We predict that the tide will turn by the summer. So we help hoteliers with their rate strategies as well as their contracts and connections with new sales channels, especially to the local ones (as domestic travel is predicted to recover more quickly). It’s important to stay active on the existing sales channels that they’re working with but they have to discover new ones as well to differentiate their portfolio and reach out to worldwide guests. We also give them the guidance and the tools to develop special promotions like 3 for 2 offers and to manage their policies for cancellations (suggesting them to offer free cancellations during the pandemic).”
HotelRunner has developed a new tool designed to “guide the industry” at this time. Called HotelRunner Pulse, the free platform uses data generated on the HotelRunner platforms in order to create a snapshot of what is happening in the industry.
“Everyone will become much more tech savvy”
In the short-term, the travel industry has seen many workers laid off or furloughed, 537,990 people according to the Global Travel Barrometer, and many seasonal workers who do not qualify for furlough will face uncertainties over future employment.
However, Agopyan believes that the industry has the ability to recover, with tech playing a key role:.
“Furloughs and lay-offs are very common in the industry as the players are trying to fight with cash flow problems. Thousands of people (even the ones working in many unicorns and popular companies) are laid-off or furloughed. However we are very optimistic and we are believing the recovery is coming soon,” he says.
“In the short-term management of the cash flow is crucial for all companies. When Covid is under control, a new travel industry will emerge, with reduced business travel, and concern about overseas travel. Bookings will be more digital with much more flexible booking policies. In the near future, we believe local travel will be popular and people will be hesitant to travel internationally in 2020.
“Everyone will become much more tech savvy using online meeting tools and this will drive the continued use of such technologies replacing a part of the business travel. Our aim is to rise stronger after Covid and be a player in the new travel economy with continuous innovation we deliver during Covid.”