The Phocuswright Conference: For the Record - A 2021 Wrap Up
Lorraine Sileo, Senior Analyst & Founder, Phocuswright Research, Cory Garner, Co-CEO, Travel Technology Research (T2RL), Vajid Jafri, Chairman, CEO, Onriva, Traci Mercer, SVP, Marketplace Segments, Sabre, Alex Zoghlin, President & CEO, ATPCO
By Lorraine Sileo
Senior Analyst & Founder, Phocuswright Research
I’ve been to every Phocuswright conference since 1997 but this was one for the record books. The embrace of long-lost friends and colleagues, diversity of content, uncertainty about pandemic etiquette (turns out there isn’t any) and the thrill of being away from home collided into one great experience. Sure, there were lots of people missing who for one reason or another couldn’t attend this year (we get it). But for those who did attend, the conference symbolized hope for the recovery, renewed confidence in our industry, and a glimpse into what a fresh new year might bring. Yes, it was a successful event by many metrics, but it was also very different.
The theme of this year’s conference, “Travel’s Renaissance: Smarter, Bolder, Better,” was meant to be aspirational, but this is not a quick recovery. Travelers are willing, but there are still many challenges concerning borders, safety, and shortages. It might be pre-mature to say we’re in a phase of enlightenment, but at least we can all see a lot clearer now versus one year ago. Personal and professional trials over the past 20 months have changed us in one way or another, and that has led to a sense of gratitude. Coming out the other side with your business intact (whether you raised billions in capital (and are paying it back) like Expedia or received a government check to make payroll), has made survival a true victory.
As we know not everyone fared the same. Travel is a diversified industry with many subsegments, each with its own customer proposition and business model. Those boasting the most success on Center Stage were short-term rentals (Guesty, Airbnb, Vrbo) while hotels still struggled with labor shortages and the slow return of business travel (though positive signs are everywhere). Another big pivot (Hopper into fintech) shielded the travel booking app from the worst of the downturn. It makes sense that uncertain times would lift risk-based products like insurance and price protection. Some took risks (Kayak trials hotel ownership with Life House) while others pared down (Expedia sells Egencia, Classic Vacations, pulls back from activities, to sharpen its core focus).
There was some controversy, especially around sustainability. We all recall that the earth was healing itself during the early lockdown and many vowed to continue efforts to clear the air. There were pledges to cut down on carbon emissions, stay away from over-popular destinations (e.g., Barcelona, Venice) and use alternative transportation such as rail to curb the use of fossil fuels. “We’re not anywhere near where we need to be just yet,” admitted Jeremy Sampson of The Travel Foundation. With recovery in sight, will the industry (and travelers) fulfill those promises, or, as Steve Hafner said, will it just continue to pollute, especially as it ramps back up.
Center Stage speakers tackled some age-old questions (Will NDC change modern retailing? How can we provide a consistent traveler experience?) with renewed vigor and intelligence. Others challenged the industry with fresh ideas. For example, self-sovereign identity (SSI) can support truly frictionless travel while allowing us to maintain control of our own personal data. This is something we all can like (a single code that identifies our history and preferences at all points of our journey - anonymously!). The Decentralized Identify Foundation (DIF) continues to build use cases for Hospitality and Travel. Even though it’s early days, we must pay attention.
Robert Cole, Senior Research Analyst, Lodging and Leisure Travel, Phocuswright, Heather Dahl, CEO, Indicio.tech, Filipe Pereira dos Reis, Director Airports, Americas, IATA, Kaliya Young, Ecosystems Director, COVID Credentials Initiative, Linux Foundation Public Health
Of course, there was talk of money. Even though the number of start-ups receiving funding has plummeted according to Phocuswright (from 400 in 2016 to just 12 in the first half of 2021), there’s still plenty of money to go around for existing businesses. Among our Center Stage companies, TripActions raised $430 million in capital this year and Spotnana, $41 million. For Hopper, $600 million was raised to date.
The popularity of SPACs could lead to more public travel companies – a good thing for the industry, according to investment analysts on stage. SPACs pave the way for a faster IPO (can be six months from idea to IPO, according to Christoph Schuh of Lakestar). But a lot of people, according to Chris Hemmeter of Thayer Ventures, will lose their shirts in the SPAC market, to say it nicely. Inspirato, HotelPlanner, and HomeToGo were among those travel companies taking the SPAC route to an IPO, and more will follow.
In many ways The Phocuswright Conference was about ramping up, hearing each other’s stories, and planning for a full recovery in 2022, ‘23 or maybe ‘24, depending on your outlook. After all, there was so much optimism when the U.S. opened its borders in early November and more than one quarter of attendees were from outside the country – a wonderful surprise. But as we celebrated, parts of Europe were locking down again, the popular Christmas markets in Austria and Germany shuttered for yet another year. Even if the pandemic finally abates, there will be many issues left in its wake, like the labor shortage. Cowen’s Helane Becker said the industry needs to replace up to 35,000 pilots. And Stacy Ritter of Visit Fort Lauderdale challenged the hospitality industry to fix wages (too many workers are “busting their butt” for $10/hour). If not, will we be paying extra for housekeeping?
There also remains uncertainly around remote work. Is it permanent or temporary? Digital nomads and “work from anywhere” have defined the long-term stay market, but how long will these trends last? And while I enjoyed Peter Kern’s first live interview at Phocuswright (the fifth Expedia CEO), we have to wonder who will be sitting in Steve Kaufer’s seat next year as the Tripadvisor co-founder steps down after 21 years at the helm. “I will be cheering from the sidelines, but I won’t be there,” he told us.
Lorraine Sileo with Peter Kern, Vice Chairman & CEO, Expedia Group
There were some obvious voids – we missed our friends from China and India and other parts of the world, in some cases waiting for travel documents that never came. And we missed the passionate and inspired presence of our founder, Philip Wolf, who passed away in March, and who was honored with several tributes.
I’ve just touched on the discussions that took place on Center Stage, not to mention what was debated off stage, most likely on the patio with cocktail in hand. We have all learned how to live with uncertainly, to bend, sacrifice and be grateful. We don’t know what’s on the other side, but whatever it is, one thing is for sure – we’ll all be talking about it at next year’s Phocuswright Conference, and it better be in person.
Some of the Phocuswright team
A tribute to Philip Wolf, Founder, Phocuswright
View all 2021 session videos here