Travelpulse | July 27, 2020
A hotel opening and an increase in air connectivity are driving the tourism reopening in the Yucatan. These are the two latest developments in the state tourism board’s activation of its three-phase Tourism Recovery Plan, which includes health care, preservation of tourism operations with more than $1.3 million in loans granted to sector workers and market reactivation.
ATPI | July 06, 2021
When faced with a crisis, the travel industry reacts in a variety of ways. ATPI’s solution to the pandemic is to join the other mega-agencies that offer technology to other travel agencies. What ATPI may discover: licensing may be a complicated process.
ATPI’s track record with technology companies works to its advantage. For example, it recently invested $1.4 million in TapTrip and almost $350,000 in Singapore’s Greywing platform. According to its CEO, it now wants to “liberate” its platform and generate money by licensing it to other companies that may not have the means to create their own.
“The technology stacks that we’ve developed, we’re going to move into a different division so that, in addition to a travel management business arm, we’ll have our technology arm,” Ian Sinderson said.
ATPI has fared quite well in comparison to many of its rivals due to rising ties with the robust marine and cargo transport industries. It had a profit of $15 million last year, although that number was 50% lower than in 2019. Selling software could compensate for income lost.
When it formally launches in the coming months, its new technology arm, TripStax, will be a semi-autonomous company. TripStax was founded in August of last year, although ATPI experimented with various names, registering Travelstax and Lemonstack with the UK’s Companies House along the way.
TripStax will provide a full suite of platforms, including a booking tool, profile manager, analytics, duty of care, and traveler tracking platforms – key elements of technology that the agency has spent significant time developing internally, according to Sinderson.
GETTING THE BEST DEAL
ATPI is not the only agency to license a software-as-a-service travel platform to third parties; several of the industry’s larger players do as well. With their vast resources, they have greater opportunities to develop, or even buy, specialized platforms.
For example, American Express Global Business Travel has over 200 agencies signed up for its GBT Partnership Solutions section. They may, for example, utilize its booking tool, Neo, which assists the agency in filling gaps in its footprint. In addition, this premise collaborates with companies such as Kanoo in the Middle East and Tourvest in South Africa.
But what does it think of ATPI’s venture into software licensing?
If Amex GBT’s acquisition of Egencia goes through, it may be able to expand this segment of its company. “Teaming Egencia with GBT’s Supply MarketPlace, one of the most extensive sources for information and experiences for business travelers,” it said in a statement. It is now seeking a vice president for its GBT Partnership Solutions business.
However, one expert has warned that any agency selling its technology must guarantee that it is mature and flexible. “There is always a gap between utilizing a system inside one business and then providing it to a wider audience,” said Guy Sneglar, senior vice president, global travel technology integration, Partnership Travel Consulting.
Amex GBT’s Ahluwalia noted many legal, compliance, data privacy, and regulatory concerns to address before in-house solutions could compete with a third party. Then there are concerns about the content that comes with the technological product and other business structures.
Branching out has proven beneficial over the years, with some spin-offs taking on a life of their own. For example, Atriis, a managed travel technology platform, was founded in 2013 as a joint venture between Amsalem Travel in Israel and Portman Travel (acquired by Clarity Travel) in the United Kingdom.
HRG also found success with developing its expense tool Fraedom, while the UK corporate train booking site Evolvi was initially developed by Harry Weeks Travel, a 1954 agency.
Holiday Inn | April 23, 2021
Ken Hamlet, the former CEO of Holiday Inn, intends to use a $500 million war chest to acquire limited-service hotels (those without facilities such as a restaurant or spa) and reposition them as properties with a more upscale customer experience.
Consider it adding more of the Four Seasons experience to roadside hotels, as Hamlet put it.
He was CEO of Holiday Inn for nine years in the 1980s and early 1990s, and during that time the business was purchased by IHG and introduced or acquired brands such as Embassy Suites, Crowne Plaza, Hampton Inn, and Harrah's. Rather than starting his fund, Hamlet joined Olive Tree Hotels & Resorts, a hotel investment group where he now serves as CEO, to pursue deals.
“I began to think of maybe now is a very good time to take advantage of getting back into the hotel industry and purchasing distressed assets or buying assets that were well-located, well-branded, relatively well-managed, and that were being distressed and only needed additional capital to get them up to 2021 standards,” he said this week.
The only thing is that there is a litany of hotel investors drooling about hotel investment prospects that did not come true before the pandemic.
Investment firms such as CGI Merchant Group, in collaboration with New York Yankees baseball legend Alex Rodriguez, and Bainbridge DXS are also scouring the market for hotel acquisitions of hundreds of millions of dollars in the coming years. Dreamscape Cos., owner of the Rio All-Suite Hotel & Casino in Las Vegas, has more than $1 billion in cash to purchase hotels, including troubled business-transient and convention-focused properties.
Olive Tree's capital distinguishes itself by concentrating on limited-service hotels in a mix of the 75 major U.S. cities as well as some secondary and tertiary markets such as Las Cruces, New Mexico. As long as there is a nearby demand driver, such as a hospital, university, or office park, the company can seek a deal. The majority of buyers are looking for troubled hotels in metropolitan markets or resorts in drive-to and leisure destinations.
Olive Tree intends to upgrade its guest rooms with more innovative features, such as automated check-ins and co-working-inspired workspaces in public areas. But, in addition to the technology, Hamlet desires enhanced client support, such as staffers adding personal touches to the guest experience, such as a bottle of wine or glass of champagne delivered to a room or hors d'oeuvres and chocolate bars in the lobby.
The move is reminiscent of how Holiday Inn became a brand. Kemmons Wilson established the roadside motel business in the early 1950s after becoming dissatisfied with the choices offered on a road trip between Memphis, Tenn., and Washington, D.C.
He set out to fix it because there was no consistency or quality in the accommodation experience. Olive Tree intends to replicate the success of existing limited-service hotels that are underperforming.
Many of Olive Tree's acquisitions would be branded by major companies such as Marriott, Hilton, Hyatt, and IHG. However, the company is not opposed to maintaining property independence or even launching its brand.
It is unclear when any of those acquisition goals will become available. Olive Tree reportedly has one hotel under contract and another "in the works."
Due to a mix of bank forbearance on mortgages and several rounds of federal stimulus by offerings such as the Paycheck Protection Program of forgivable small business loans, there haven't been as many distressed hotel properties exchanged throughout the last year. The Olive Tree team does not anticipate having to wait much longer.