As the travel industry shifts into higher digital gear, and increasingly responds to the needs and desires of new consumer groups — millennials and Gen Z among them — some players are getting left behind and making their way into the history books.
That’s the general case with travel search startup Hipmunk.
News emerged this week that company, bought by SAP Concur in the second half of 2016, is shutting down both the consumer- and corporate-facing operations of the platform. There was no single clear explanation from the platform, its parent company or travel industry observers about the exact reasons for the move. Perhaps the best reason, via Hipmunk’s official parting message at least, was this: “As its approach to providing business travel solutions has evolved, SAP Concur has made the decision to retire the Hipmunk product. As a travel metasearch, we helped travelers take the agony out of travel planning and gave SAP Concur a deeper understanding of how to develop innovations that meet the needs of today’s traveler.”
Bad signs seem to have been building for Hipmunk prior to this week’s announced closing of the platform. Reports said that SAP Concur rebuffed a buy-back offer from Hipmunk’s founders, Adam Goldstein and Steve Huffman. An unnamed source told the publication that Concur confirmed it would not consider offers for someone else acquiring Hipmunk assets.
Hipmunk Funding
Back in 2014, Hipmunk said it had raised $20 million in Series C funding. Oak Investment Partners led the way, which according to Hipmunk CEO Adam Goldstein had the necessary travel and mobile experience to really help Hipmunk thrive. Ren Riley, general partner at Oak Investment Partners, said in the Hipmunk statement that his company was “eager to invest in great entrepreneurs and companies that are capitalizing on mobile trends. Hipmunk has both of these qualities, and in less than four years, has developed an energetic user base, industry-leading cross platform integration, and key partnerships that we’re excited to help grow.”
Whatever the deeper causes of Hipmunk’s demise, the travel industry is in a state of innovation and disruption — and much fiercer competition as global travel spending continues to grow.
Consumers have always had a desire to see and explore the world, and along with that a constant need for comfortable accommodations as well as transportation. But the methods travelers use to discover, reserve and pay for their lodging and transportation has evolved over time.
Larger Travel Trends
Travel services have to meet the unique payment needs of four different generations of guests, according to the latest PYMNTS Commerce Connected Playbook. Millennials, for example, now comprise 20 percent of travelers around the world, and they gravitate toward mobile apps that make it more seamless to book and pay for travel.
From Domio to Splitty Travel, hospitality providers and online booking services are working to meet the needs of millennial and Gen Z consumers. These innovators, and others, are catering to the booking and payment preferences of these guests.
Domestic and international leisure travelers spent $762 billion in 2018. And travel innovators are working to meet the accommodation needs of millennial leisure travelers, among other guests. Domio, in one case, offers a technology platform focused on servicing apartment hotel accommodations to millennials, group travelers and families. The firm recently notched $100 million in funding to expand both domestically and internationally per a report in December. Domio reportedly planned to use the infusion — a combination of $50 million in debt and $50 million in equity — to expand to markets targeting an underserved audience of millennials and families as well as business teams. As of the report, the company was in 12 markets.
The share of Generation X travelers who cite cost effectiveness as their most important travel priority is 80 percent. Innovative travel platforms are providing travelers with less expensive and more flexible booking options by taking fresh approaches to hotel reservations. Splitty Travel, for example, allows consumers to combine two rate plans to create one itinerary for their stays. The technology could let travelers save money on their excursions, but the platform goes beyond cost savings. The company, for instance, enables splitting and matching between meal plans in addition to cancellation policies. In a prior PYMNTS interview, Splitty Travel Co-founder and CEO Eran Shust said the company’s aim is to bring more options to the table and enable travelers to “choose something not out of the specific package[s] that most of the OTAs [online travel agencies] are offering.”
It seems unlikely that Hipmunk will be the only digital- and mobile-focused travel service to fall. Ongoing change, after all, also claims its victims.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
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