Tag: Carnage

Amid coronavirus carnage, one German travel tech startup goes for growth

By Douglas Busvine



a man and a woman standing in a room: Limehome co-founders Lars Staebe (L) and Josef Vollmayr (R) pose for a photo in the company's headquarters in Munich


© Reuters/LIMEHOME GMBH
Limehome co-founders Lars Staebe (L) and Josef Vollmayr (R) pose for a photo in the company’s headquarters in Munich

BERLIN (Reuters) – Many of Europe’s travel tech companies have suffered setbacks as the coronavirus pandemic has forced governments to restrict people’s movements, but amid the carnage one German startup is pushing ahead with its growth plans.

Limehome https://www.limehome.com, now expanding into Spain from its German and Austrian home markets, is pioneering a “contactless” alternative to traditional hotels that features curated, designer apartments and an AirBnB-style platform to handle bookings.

As governments imposed lockdowns in the spring, Limehome did suffer a temporary hit to bookings. But from May through to September, it operated at 85% of capacity at its 45 properties. Another 35 are under development.

“During the first lockdown, we were really lucky,” co-founder Josef Vollmayr told Reuters, adding that business travellers had switched to Limehome as hotels closed: “We became more relevant.”

AirBnB is expected next week to publish its registration to float in New York, riding a pandemic surge in bookings from vacationers practising social distancing.

Limehome, at two years old an early-stage venture, recently topped up a Series A funding round to 31 million euros ($36 million) led by HV Capital. It will plough part into launching in the Spanish cities of Granada, Seville and Barcelona.

More mature travel techs, like tours and trips specialist Getyourguide, have meanwhile cut staff and turned to investors for fresh funding in the form of convertible notes – a downpayment on a future equity funding round that would be tough to complete in the current climate.

Munich-based Limehome differs from AirBnB in that it works with owners to design and furnish apartments to its own standards – often converting vacant downtown office space into boutique ‘apart-hotels’.

On the digital side, it manages booking, checking, cleaning, service and billing. It relies heavily on reservations via online travel agents like Booking.com or Expedia, but the share via its own platform has risen to 30%.

With governments again restricting tourism and ordering hotels to shut to contain a second COVID-19 wave, Limehome still expects business travellers to keep its flats busy.

An airline-style yield management system, which can lower prices at the last minute to attract bookings, helps keep occupancy rates high and supports positive margins even at low prices.

“We are open. Market prices are low. But we are the leanest product out there,” Vollmayr said.($1 = 0.8560 euros)

(Reporting by Douglas Busvine; Editing by Angus MacSwan)

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Hotel Industry Carnage Is Helping Airbnb Ahead of Its IPO

The COVID-19 pandemic has been devastating to the U.S. and global economies. While some industries have managed to thrive, it is a very unequal recovery. The travel and tourism industry has been crushed, and on top of the questions for airlines and cruise lines, the hotel industry is continuing to face some daunting challenges at the same time the industry already was undergoing major competitive changes.

Data benchmarking group STR claims to have built the world’s largest hotel performance database, and it sees some continued pain lasting throughout 2020 and persistent weakness lasting much longer. While people are traveling again, the hotel industry is seeing far fewer business travelers and those who are traveling are spending less.



a large bed sitting in a room


© Provided by 24/7 Wall St.


According to STR, the revenue per available room is expected to be down 52% for all of 2020. Similar to other travel industry data providers, its view is that hotel spending will not get back to pre-pandemic pricing until 2024.

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This is not just a U.S. issue either. In Europe, STR noted more than a 70% drop in revenue per available room. STR sees only 72% of European cities having recovered to pre-pandemic levels of international visitors by 2024.

If these numbers do not sound ghastly, it’s a lack of understanding business history. STR revealed that the U.S. hotel industry experienced its lowest third-quarter occupancy level on record. The occupancy rate of 48.0% was down 32.2% from a year earlier, and the average daily rate of $101.25 was down 24.1%. As for U.S. revenue per available room, that was down 48.5% to $48.58.

One lingering issue, beyond extended lockdowns and reopenings, has been rise of Airbnb, Vrbo and other sharing accommodations. The industry was facing the same dire prospects as the hotel industry in the immediate aftermath of the pandemic, but the home sharing and short-term rentals recovered rapidly as people started traveling by car and wanted not to stay around several hundred strangers, sharing restaurants and elevators and so on.

Airbnb is expected to conduct an initial public offering soon, and travelers taking trips closer to their home is working rather well for the short-term home rental business. This remains a top IPO to watch in 2020.

Of the leading hotel chains by market cap, Marriott International Inc. (NYSE: MAR) stock is still down by more than one-third of its peak value, and Hyatt Hotels Corp. (NYSE: H) is still down 40% from its high. Hilton Worldwide Holdings Inc. (NYSE: HLT) is between the two in size, with a $24 billion market cap, and its shares down just under 20% from its pre-pandemic high.

What is obvious in the tourism industry is that a vaccine and a simple treatment for COVID-19 is needed. As for the hotels (and airlines and cruise lines for that matter), is that they have to hope a vaccine or cure arrives before consumers become overly used to being able to show up at a house and enter on demand

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