Skift Take

Today’s edition of Skift’s daily podcast looks at Hilton’s new marketing positioning, Alaska Air’s business travel worries, and UK tourism’s marketing overhaul.

Rashaad Jorden

Good morning from Skift. It’s Monday, July 25 in New York City. Here’s what you need to know about the business of travel today.

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Episode Notes

Hilton Worldwide is unveiling two major marketing initiatives on Monday, one of which is an international TV campaign highlighting the value of a comfortable hotel experience. But more significantly, it’s committing to making the hotel stay the center of its marketing for years to come, reports Senior Hospitality Editor Sean O’Neill.

Hilton Chief Marketing Officer Mark Weinstein acknowledges that showcasing an actual hotel is a shift from standard marketing practices. Most hotel companies, including Hilton, run ads advertising a destination instead of their properties. However, he believes the catchphrase “For the Stay” will resonate with consumers eager for a relaxing hotel experience during a chaotic summer for travel. In addition, Weinstein sees the catchphrase being permanent — unlike campaigns that come and go.

As for the company’s TV campaign, it contains light-hearted ads featuring travelers ranging from families to socialite Paris Hilton in stressful travel situations.

Next, Alaska Airlines saw business travel make a big rebound in the first quarter. However, the carrier is uncertain the sector will continue to make progress in its recovery, writes Corporate Travel Editor Matthew Parsons.

Alaska has benefited significantly from the large-scale return of tech workers to business travel. But Chief Commercial Officer Andrew Harrison said during Alaska’s second quarter earnings call last week that bookings by tech companies may have plateaued. Corporate travel volume for technology companies is roughly 50 percent of pre-Covid levels, according to corporate data platform Tripbam.

Although Harrison described the future of business travel as choppy, Parsons writes the company is not complaining about the present. Alaska generated $2.7 billion of revenue in the second quarter, a company record. Its revenue in June alone surpassed $1 billion.

Finally, the United Kingdom is overhauling its destination marketing organizations as part of its strategy to make tourism more sustainable, writes Global Tourism Reporter Dawit Habtemariam.

The revamp includes launching an accreditation program for such organizations that align with the government’s sustainability plan, according to VisitEngland Director Andrew Stokes. The overhaul comes after a VisitEngland report last year revealed the UK’s destination marketing landscape was overcrowded. Stokes said the accreditation program aims to simplify that crowded environment, but he acknowledged VisitEngland is still ironing out the criteria with the government.

Meanwhile, the government will also choose a region for a pilot project, in which one tourism board — or a group of local ones — will receive funding to operate under a new model for three years. Stokes said VisitEngland will be able to see how much a specific level of funding impacts tourism development.

Skift Take

The company, which is backed by Concur co-founder Steve Singh, is still on its mission to quietly dismantle the underlying technology and commercial kickbacks that the corporate travel industry was built on. That costs a lot of money.

Matthew Parsons

New York startup Spotnana has tapped investors for more money as it continues its mission to unravel the complexities of corporate travel.

It has now raised $75 million in a round led by Durable Capital Partners, with participation from existing investors Madrona Venture Group, ICONIQ Growth, Mubadala Capital and Blank Ventures.

This tops up its $34 million funding in September last year, when the company officially came out of its so-called stealth mode.

The startup describes itself as a travel-as-a-service platform, and will use the financing to drive faster adoption of its technology and accelerate hiring.

Spotnana claims it is building a new architecture for the business travel industry, and has four types of four customers: corporate clients, travel agencies, technology partners and supplier partners. Its goal is to create an open platform, devoid of “biased” content, meaning flights or hotels that are recommended because there are financial incentives involved.

“Spotnana does not accept global distribution system incentives and does not hide or bias content to reach supplier volume targets,” the company says.

So this new Series B funding will be used to continue building out a wide-ranging technology stack that includes online booking tools, a booking engine, mid-office, and a new system of record for booking travel.

“We’re changing the infrastructure that you transact on,” said co-founder and CEO Sarosh Waghmar. “Unfortunately the current economic models are driven by the global distribution systems. We don’t have any of those incentives, which is why we’re building this infrastructure, and bringing in multiple sources. That’s what we’re focused on, which is why we’ve got funding; they’ve seen the customer traction we’ve got in the past 24 months.”

So what do the global distribution systems, namely Amadeus, Sabre and Travelport, make of it all?

“They understand we’re bringing innovation,” Waghmar said. “In this market, everyone’s looking for business. The past two years have been tough on everybody. From their perspective, they look at us as someone who’s disrupting the space.”

Airlines are also onboard, the CEO claimed. They like the fact they can sell content directly, cutting out the middleman. It’s not all about guaranteeing volume. Spotnana offers direct connect, API and so-called New Distribution Capability technology.

“Our message is resonating with them,” he added. “They realize we’re not just here to plug in the content from the global distribution systems, or NDC, they do see there’s a lot of value Spotnana’s able to provide to them, at the back end, and the kinds of customers we’re bringing to the table.”

In terms of customers, Spotnana is aiming for larger global organizations with offices dotted around the world.

“If you look at any of the large enterprise accounts, 95 percent of the market is concentrated by a company like Concur,” continued Waghmar. “Each country would have a separate installation, country by country, and it takes 10-18 weeks …. we can deploy many countries in one instance.”

Airlines in particular have long wanted that ability to reach these kinds of high-paying business travelers directly too, in order to personalize offers and upsell ancillaries, and Waghmar said the “Spotnana ID” was already live.

Strategic Hiring

Spotnana’s certainly been recruiting too (no sign of a labor crisis here).

Last month it poached Seth Anagnostis from flight data firm ATPCO, where he was head of content strategy. He’s now in charge of channel partnerships at Spotnana.

In September it appointed Bill Brindle, the former chief operating officer at American Express Global Business Travel, as its new vice president, travel operations and managing director for Europe, the Middle East and Africa. Prior to that the company named travel technology veteran Johnny Thorsen as its vice president, strategy and partnerships.

“We’re fortunate we’ve been able to attract this level of talent,” said Waghmar. “It’s unique compared to most startups, we’ve got amazing travel domain expertise.”

Spotnana’s other founder, Shikhar Agarwal, hails from Google Brain, while Quyen Fahey, vice-president of business operations, used to work at Amazon Web Services. Then there’s its executive chairman, Steve Singh — Concur’s co-founder, and also the managing director at Madrona Venture Group.

The company has in fact doubled the number of employees to 200 people over the past year.

In September, Skift reported Spotnana’s raison d’etre was to strip traditional technology vendors of their clout in corporate travel. That doesn’t seem to have changed, but attempting to realign commercial models, on top of developing a new technology infrastructure, is a large nut to crack.

But Waghmar remains determined. “Think of us as Amazon Web Services for travel,” he said. “We’re trying to solve an actual problem, rather just build a shiny new product.”

And for Singh, who sold Concur to SAP for $7.4 billion in 2014, it’s likely the same situation. His appetite doesn’t appear to have waned either. In October last year he led an $8 million Series A funding round in meetings management platform Troop.

Mergers and acquisitions also seem to be creeping back, with Gordian Software recently raising $25 million, and Bookaway buying up another company earlier this month.

As well as more recruiting, let’s not rule out Spotnana going on a shopping spree over the coming months with its deeper pockets. It’s worked for plenty of other corporate travel companies looking to make their mark in this highly fragmented market.