A company that helps advertisers streamline modern ad campaigns is moving further into the travel industry through a new partnership.
Clinch, headquartered in New York City, said this week that it had started a “new relationship” with Nebraska-based Sojern.
Clinch’s so-called “flight control” software suite is meant to help advertisers more easily build data-driven, personalized ad campaigns.
Sojern is a travel-focused digital marketing platform that uses consumer data to help hospitality companies secure bookings. The company, founded in 2007, has driven more than $15 billion in bookings for thousands of partners, according to its website.
The companies say that the partnership allows Clinch users to access Sojern’s capabilities.
“The ability to personalize and auto-optimize campaigns to match both environmental and user-based situations is paramount for this sector,” said Charel MacIntosh, head of business development and partnerships for Clinch, in a statement.
“Google will kill Airbnb,” tweeted Nick Huber, who writes about business and real estate, owns a self-storage company, and has 247,000 followers on Twitter.
Two people independently messaged me about the tweet, which has generated a few thousand “likes,” and hundreds of retweets since Sunday.
One Skift colleague said of the tweet: “Everything this guy says in his tweet thread is wrong.”
Conversely, a superhost in Europe messaged me about Huber’s tweet: “I would have to agree. Everybody loves a direct booking (both hosts and guests), with no whopping service charges.”
A Tripadvisor vacation rental in Miami listed in Google Vacation Rentals. Source: Google
Hosts Just Need to Put Links to Properties in Google … Hmmm
If only it were that simple.
Huber argues that hosts and guests can avoid Airbnb’s substantial fees, and both can save money with direct bookings. Actually, he claimed that Airbnb takes 25 percent of the transaction, mostly from guests, in the form of fees, which seems excessively off the mark.
After this story posted, travel industry veteran Drew Patterson tweeted that Airbnb revenue was only 13 percent of gross bookings in 2021.
Might also mention his math is wrong on margins / take rate. In 2021, ABNB did $6B revenue on $46B gross booking (13%) vs. his claim of 25%.
One of the silliest things Huber tweets is, “All it takes is folks putting a little link to their software in the Google listing. Management co manages that directly. Way more revenue to owner and less cost to guests.”
Alas, graveyards full of startup companies from Palo Alto to Madrid and Mexico City are testimony to the fact that you can’t merely put a link on a Google business listing, and expect millions upon millions of customers to discover it, and then use it. It takes a mammoth amount of resources to attract direct bookings and for a vacation rental business to build their own brands.
Hey, direct bookings would be mostly great for hosts and, to a lesser extent, guests, but how can property owners and managers attract them?
If you look at the global hotel industry, it has done an admirable job over the last few years, spending huge sums in advertising to urge customers to book directly on their own websites, where they have the lowest rates, instead of using online travel agencies.
Hotels have made significant strides in this regard in attracting direct bookings, but the vast majority of them still rely on online travel agencies to attract price-conscious consumers who care little about whether they are staying in a Marriott or a Sofitel.
Hotel direct bookings haven’t killed Expedia or Booking.com. Travel, it is often said, isn’t a zero-sum game. There is ample room for multiple winners.
Property owners use Airbnb for a reason: Airbnb has a great brand, and attracts legions of guests who start searching for places to stay on Airbnb instead of beginning their trip-planning on Google.
How does the host with one or a handful of properties compete with that kind of market power?
Direct Bookings Have Risks, Too
And although guests can avoid Airbnb’s fees by booking direct with the host, they run the risk of having no one to turn to if the host or property turn out to be a nightmare. Whether or not they work as well as advertised, Airbnb has some insurance protections in place for both hosts and guests.
Airbnb critics will be quick to say that Airbnb’s customer service for guests can be challenging, but it’s often better than dealing with hosts who have no brand or track record to stand behind them.
In fact, Google’s travel vertical has a vacation rentals feature, and it hasn’t really distinguished itself or put much of a dent in Airbnb’s growth precisely because Airbnb, and other big vacation rental brands, have shunned offering their homes and apartments through Google vacation rentals. So Google is hardly usurping Airbnb on that front.
Google has certainly damaged the businesses of innumerable travel companies because of its near-monopoly in search and the way it preferences its own travel advertising features. Curiously, although most of the far-out theories about Google taking over the travel industry tend to say that Google will transition from an advertising to a booking platform and would become an online travel agency — a switch that Google has shown little appetite for — Huber isn’t even making that argument.
Instead, he’s arguing that Google will serve as a listing platform, and build advertising around it, and that hosts, with an assist perhaps from property managers, would see direct bookings flow like lava down a hillside because these offers are inherently the best and cheapest deals for both hosts and guests.
Both Google and Airbnb Face Headwinds
Google killing Airbnb begs the question of which of the two has momentum versus the other. Both face big antitrust or regulatory challenges, and it’s hard to choose which one has the more daunting obstacles.
A little deeper into his twitter thread, Huber retreats a bit from his Google killing Airbnb opener, and pleads for “nuance.”
“Of course Airbnb will always have users,” he tweeted. “But over time many guests will go on google, find a vacation rental in an ideal location, click through to that website & book w/o paying hundreds in fees. 20 yrs from now ABNB will be a glorified lead generator.”
When it comes to predicting the future of companies two decades from now, I’ll pass on that one, considering it is difficult to look even two or three years ahead to see what the business world would look like.
So, alas, in Huber’s view, his talk of Airbnb’s death was apparently bombast.
When a twitter user tells Huber he downplayed the importance of factors like trust and reliability when considering direct bookings versus reservations through Airbnb, Huber retreats a bit further, tweeting:
“I think there will be an increased number of guests going directly. You can do all of those things without giving a huge chunk to Airbnb.”
Finally, that’s something we can agree with: There are many hosts doing everything they can to generate direct bookings, and they’ll likely have a degree of success. But I don’t believe “Google will kill Airbnb,” or that Airbnb will close shop anytime soon.
Note:This story has been updated to include additional information on Airbnb’s take rate. It also clarified Google’s role in the travel industry.
As the countdown begins to the Middle East’s very first Federation Internationale de Football Association’s (FIFA) World Cup, host country Qatar now has British soccer star David Beckham promoting the destination for a stopover break.
The campaign features Beckham on a whirlwind trip to Qatar for 48 hours indulging in a wide range of activities from exploring the spice markets of Souq Waqif, soaking up local street art, cooking tacos to camping in the desert and discovering Doha on a motorbike.
The video featuring David Beckham’s 48-hour trip to Qatar.
In 2019, Qatar’s transit traffic stood at 40 million passengers, courtesy national carrier Qatar Airways. However, the country only received 2.1 million visitors — a mere 5 percent of the number of people transiting through the country.
Through this campaign, Qatar Tourism seeks to raise awareness of what it dubs is the, “the world’s best value stopover packages.”
Passengers can book themselves at a four-star hotel for as little as $14.00 per person, per night, Philip Dickinson, vice president of international markets for Qatar Tourism had said speaking to Skift in an earlier interview.
The campaign is aimed to encourage the millions who transit through Qatar every year to follow in David’s footsteps, Akbar Al Baker, chairman of Qatar Tourism and group CEO of Qatar Airways, said in a press statement.
“We have something for everyone at incredible value, whether it’s sun, sea, sand, rich heritage and culture, or a modern and fun city break,” Baker said.
Qatar expects to bring in 1.5 million fans during the 28 days that the World Cup is scheduled to take place in the country. FIFA estimates that the Qatar World Cup returns could reach $6 billion, Nasser Al-Khater, CEO of the Qatar 2022 World Cup, said this week while speaking to Qatar News Agency.
Qatar had unveiled Beckham as its global ambassador for the World Cup in a deal reportedly worth $277 million. Beckham had however come under fire for failing to speak out about human rights abuses in Qatar.
You know travel is back when….arch rival tour operators G Adventures and Intrepid Travel have both unveiled new ad campaigns targeting commuters across London’s transport systems.
G Adventures’ “When was the last time you felt like this?” campaign, in which the company aims to showcase the joys of small-group adventures, features digital posters in London Underground stations and escalators. The month-long promotion, which is taking place while rail strikes disrupt travel in the United Kingdom, is targeting prospective customers who have returned to their offices.
“With London office workers quickly returning to our capital, that sense of ‘Groundhog Day’ was starting to set in,” said G Adventures Marketing Director Ant Stone.
London’s free newspapers, the Evening Standard and Metro, will also feature weekly content from G Adventures.
Meanwhile, Intrepid Travel has posted ads in London Underground stations and on buses, among other places, featuring the slogan “Travel Is Back For Good.” It’s the company’s first-ever big brand campaign in the UK.
Ever wonder about the daunting challenge that Expedia Group CEO Peter Kern inherited from predecessors Dara Khosrowshahi and Mark Okertstrom when Kern took the chief executive spot under Barry Diller in 2020?
The pandemic notwithstanding, Expedia Group captured its infrastructure issues in one slide as part of an investor presentation at Cowen 50th Anniversary Technology, Media & Telecom Conference Wednesday.
Many of the Group’s major brands, from Expedia to Hotels.com and Vrbo, had their own product, marketing and tech teams who were working at cross-purposes and competing against each other.
Competition can light a fire under a marketing group, for example, but did it make sense for Expedia and Hotels.com to bid against one another in Google search, and likely drive up costs?
Apparently not.
Elsewhere in the presentation Expedia noted that before it undertook its drive to simplify things it had more than 10 competing brands, five loyalty programs, more than 10 checkout experiences, and “siloed data lakes.”
In the interim, Expedia Group has made a splash consolidating many of these teams, and shedding brands including Egencia, SilverRail, Alice, Classic Vacations, and Expedia Local Expert. Not to mention BodyBuilding.com, which Expedia acquired when it bought Liberty Expedia Holdings.
The goal is “to build a single tech platform,” the presentation said.
We’ve heard Expedia talk of building a solitary tech platform for many years under prior regimes, but it seemingly never happened.
Just look at their market caps — Booking Holdings $92.05 billion and Airbnb a humbling $77.8 billion.
The Wall Street Journal reported Sunday that Booking’s share price has notched “single-digit gains” over the last six months, while “Airbnb’s shares have lost nearly a third of their value.”
Reporter Laura Forman attributes some of the discrepancy to the comeback and relative affordability of urban hotels versus soaring rates for short-term rentals.
Not to mention, we’d point out, seeming out-of-control cleaning fees with little rationale for the heft of the cost.
Airbnb’s average daily rates climbed 37 percent in the first quarter when measured against the first quarter of pre-pandemic 2019, according to the Wall Street Journal. Citing STR data, the story said average rates for urban hotels around the world in April haven’t yet inched back to pre-Covid levels, while the average price of a room night for hotels as a whole has risen less than 15 percent in April compared to the same period three years ago.
Of course, as the story notes, Airbnb has the brand advantage over Booking.com as Airbnb spent less than a quarter of its revenue on sales and marketing in the first quarter of 2022 while Booking shelled out more than half its revenue on sales, marketing and related expenses.
Still, there’s a reason that Booking.com spends so much on performance marketing on Google even as Airbnb has reduced the percentage of revenue it spends on marketing on Google and elsewhere since 2020. The reason Booking.com spends so much? It seemingly is working.
The Wall Street Journal cited Sensor Tower data tallying Booking.com’s app installs in April as being 13 percent higher than in January 2020 while Airbnb’s app downloads fell 12 percent in the same timeframe.
“Ironically, Booking has managed to reinvigorate interest in its namesake brand this year by promoting its tired image,” the Wall Street Journal said. “A Super Bowl commercial for Booking.com featured The Wire star Idris Elba mocking the brand as having ‘never been accused of being sexy, flash or lit,’ unless, he adds, ‘we’re talking literal.'”
We’re unsure how much weight to give to Booking’s Super Bowl ad — which seemed to underwhelm — in its app download number uplift.
The signs of life in Booking’s stock price compared with six months ago has a lot to do with the comeback of cities, the reopening of Europe, where Amsterdam-based Booking.com has most of its strength, and the relative affordability of hotels.
After all, while some people wrote off cities during the pandemic as being permanently scarred, Booking’s Glenn Fogel argued — as did Peter Kern of Expedia Group and Steve Kaufer of Tripadvisor — that urban hotels and cities would be back. It appears as though that’s starting to take shape.
