Letter from Fort Lauderdale: The sun rises on global travel

Expedia’s Kern says no more “peanut butter” approach to expansion while Concur founder Steve Singh dives deep into corporate travel disruption

WHEN Mark Mahaney, senior managing director of investment banking firm, Evercore, asked the audience at the Phocuswright conference how many had travelled cross-border to attend the event, several hands, including mine, shot up instantly.

The internet research expert had
been trying to make the point that while travel recovery was underway in the
US, cross-border travel would be slow in picking up and that even though the US
had opened its borders on November 8, it might take some time for inbound to
return and for Americans to travel abroad.

Somewhat surprised by the strong show
of hands, he said, you are ahead of the pack.

And that’s what it was – it was
good to see the travel industry get ahead of the pack because if we are to
convince our customers about the need to travel, whether for business, leisure
or to attend conferences, we need to step out of our bubbles ourselves and
literally, walk the talk.

The Phocuswright conference may have been smaller in size – close to 800, with nearly 30% coming from outside the US – but was definitely bigger in heart (and hugs and kisses). I think I more than made up for 20 months of lost hugs.

This is what happens when you put
naturally social humans in a room together, especially those who haven’t seen
each other in nearly two years and who’ve been through the same crisis together
– and of course, in places where there are almost no restrictions on
socialising,  including masks (which
while recommended were a rare sight on the show floor).

Compared to WiT Experience
Singapore where we had to contend with government restrictions on seating,
masking, mingling and moving around, this felt like kids being let loose in a
sandbox to play – which means leaving it to individuals to make their own
personal risk assessments.

The experience of coming together
with people from different countries – Argentina, Australia, Brazil, Canada,
Chile, Colombia, Czech Republic, Egypt, France, Germany, Greece, Iceland, India,
Ireland, Israel, Italy, Mexico, Netherlands, Russian Federation, Saudi Arabia,
Singapore, Spain, Switzerland, Thailand, Turkey, Ukraine, UAE and UK – was
almost cathartic as we shared “war stories”, caught up on each other’s personal
well-being (particularly those who contracted Covid and thankfully recovered)
and then got on with the business at hand – restart cross-border global travel.

Running into our two startups who finished first and second respectively at the WiT Startup Pitch, Mark Corbett of Thrust Carbon and Noah Bloom of RunGo, felt like they had popped out of the virtual screen into real life.

In the networking area, corridors
and the lobby of The Diplomat Hotel, the sound of chatter and laughter was
constant. The lack of hotel services (this hotel reopened in June and has had trouble
restaffing for the rebound) was not enough to dampen people’s spirits.

People huddled in meetings to renew partnerships and strike new ones; startups met up with investors (capital is on sale, said Steve Singh of Modrana Venture Capital), so lots of money chasing investments right now; and new startups pitched their ideas in front of an industry hungry for innovation.

“I was never worried about travel
coming back,” said Peter Kern, vice chairman and CEO of Expedia Group, when
asked what he worried about at the start of the pandemic that didn’t turn out
to be a worry after all. “Perhaps age gives you perspective. New York City
boomed for 20 years after September 11.”

What he did worry about was money,
which the group raised at the beginning of the pandemic. “A lot of it has been
paid back. It was expensive,” he said. In retrospect, perhaps it needn’t have raised
as much but it had to, not knowing how the crisis would turn out.

And it was good to have global
conversations back on the table when for the past two years, most talk has been
about domestic travel. Travel is not meant to be confined or localised, it’s
meant to be free to move across borders.

Kern himself has been travelling,
so again he’s ahead of the pack. As soon as he could, he travelled to London to
meet his team and then had a family holiday in Tuscany. Global recovery though
is patchy, he said. “Latin America is worse than US, Asia Pacific is worse than
America.”

He said he would be ramping up
“the international piece” but would not take its “historical peanut butter
approach” where it would lather continents like Asia or Latin America with one
spread. “We want to have more focused strategies in markets where we can win or
go on the offensive. It will be more directed and intentional.”

This approach will also apply to
how it does performance marketing. Said Kern, “We ramped that up as the
business ramped up. I am signing big cheques again and we intend to use
performance marketing to great effect but we will also do other things –
loyalty, brand, direct. We will run a more profitable business.

“We are cleaning up complexity to
drive velocity again.”

One of the “cleaning up” it did was
get out of corporate travel – it’s sold Egencia to American Express GBT in a
deal where it has a 10-year agreement to provide supply as well as keep a small
stake.

And interestingly, this is the very sector that Steve Singh, founder of Concur, is putting stakes in the next level disruption in this multi-billion dollar sector. Singh is regarded as the kingpin of the corporate travel world, building up Concur Technologies and selling it for $8.3 billion to SAP in 2014. He’s listed as chairman of the board of TROOP and executive chairman of Spotnana, two startups out to change the way meetings and corporate travel are planned, bought, sold and consumed.

“I wasn’t interested in investing
in travel again until a few things changed,” he said. “One, technology where
the cloud took hold and the capacity to solve problems that you couldn’t five
years ago. Two, Covid which will change our generation for the next 100 years.
While it’s a tragic human story, it’s pushing opportunities across the globe
and in the long run, it will be fantastic for humanity. Three, capital – it’s
on sale.

“These three factors will drive
opportunities to do something amazing – I am a huge believer that travel will
come back, bigger than ever, different but bigger than ever.”

The biggest change is the shift
to the individual. “There will be massive change around the individual and how
to serve them, and the architecture that has all been built around the company
has to change. We have to flip the architecture around.”

And that’s what the startups he’s
invested in – TROOP and Spotnana – are doing, building open architectures that
empower the individual – whether it be corporate client, supplier or the end
traveller.

Sharing a mantra he’s lived by,
he said, “You can’t just
solve what’s good for you but solve what’s best for your customer even if it’s
bad for you.”

Both Kern
and Singh are also of the generation that does not believe work will change
forever. When asked what he’s sick of talking about, Kern said, “Flexible
work.”

Singh
believes the amount of dollars being saved in commercial real estate will shift
to business travel. “Social media is one of the worst things we’ve seen in the
past five years. It tears people apart. What brings people together is to have
conversations together. That’s why I came into travel.”

And that certainly proved true at Phocuswright. The conversations were real and tangible. This is an industry that’s building its way back. There is of course some trepidation as to how the virus will turn – with Europe now seeing the latest wave of infections – but Asia Pacific is slowly opening up.

And as we’ve learnt to navigate the pandemic the past 20 months, we will now learn to live with it, as I am learning to do on this trip that’s taken me from Singapore to New York, Miami and Fort Lauderdale. Now I’m headed to Cleveland, Ohio, located in the rust and snow belt of the US. In heading to this part of the US, I’ve been told I’m definitely ahead of the pack. When I told Peter Kern where I was going, he looked at me quizzically and asked, “Why?”

I wonder what I will find there. Welcome back, global travel.