Are travel tech companies safe from layoffs? These executives are optimistic, for now | Tech US News

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Skift Take

While Big Tech is laying off thousands, the travel tech companies interviewed for this column are hiring dozens. That’s good for now, but we’ll see what affects the global economy next year. If it’s too hard, some cuts may be unavoidable.

Justin Dawes

Big tech companies are laying off tens of thousands of people.

Most recently, Meta announced this week that it is laying off about 11,000 people. And Twitter, of course, had its own reports. There were other layoffs from Salesforce, Stripe, Lyft, Coinbase, Shopify and more.

So, is it the next travel technology?

Can be. But still no signs. Booking.com, for example, reported $6.1 billion in revenue last quarter, its best ever quarter. And the CEO said that demand is not slowing down.

Still, executives are on the lookout, though some said they’re not too worried, at least not yet.

That’s also what Ian Brooks sees as co-founder of travel tech recruitment firm Gail Kenny. The company has hired more than 1,000 mid- and senior-level technology employees over the past 15 years, mostly focused on the European market, he said.

“Yes, there is some degree of caution,” Brooks said. “But at the same time, I think a lot of travel companies cut back a lot during the pandemic … They saw how hard it was to rehire people, so they’re not in a rush to cut back. Not yet.”

The first few months of the year are often a busy time for bookings, so expect companies to wait that season before making big decisions.

Meanwhile, some travel tech executives believe their companies will be sustained by a greater need for industry modernization, and some see the Big Tech layoffs as an opportunity for their own businesses.

A need for travel technology

Travel tech companies ramped up business later in the pandemic as others in the industry needed to accelerate digital transformation. Much of that need came from an extremely thin hospitality workforce.

“Companies have found that they have to be more efficient because staff is costing more,” Brooks said. “Wage inflation is 10, 15, 20 percent in some cases. You may have to employ fewer people to do the same amount of work because you will have to pay them more.”

That need for digital transformation is why HotelKey, a Texas-based hotel property management system platform, has more than 100 open positions to be filled in the next 12-18 months. The company has hired 60 employees worldwide in the past 12 months, according to Aditya Thyagarajan, co-founder and president of HotelKey.

“HotelKey has always done well in a difficult market. When there is a slowdown, our customers have the opportunity to look for technology options to reduce spend and improve operational efficiency. We thrive in this environment,” Thyagarajan said in an email. “Our cost-effective solutions eliminate technical debt and provide our customers with opportunities to improve workflows and processes to reduce costs and overhead.”

He said the company signed a “big global deal” during the pandemic.

And Lodgistics, a North Carolina-based hotel operations software company, has 20 employees and plans to hire 20 more.

“Our software, which is an operations and collaboration platform, solves what I think is the biggest problem in hospitality right now, which is the labor crisis,” said Jessica Kramer, CEO of Lodgistics. “We are a tool to help hoteliers operate and collaborate and, in essence, ensure the retention of the people they bring in. We feel that being in a company that focuses exclusively on such an important issue means that we are hiring and will be positioned for growth.”

The CEO of Busbud, an online bus ticket marketplace, believes the pent-up demand for travel will keep his company going, even if some people have less disposable income.

“We’re really seeing a lift in people taking the bus and not driving,” Busbud CEO and co-founder LP Maurice told Skift this week. “Most of them are leaving their car at home because of gas prices.”

Busbud also now offers more technology services for the ground transportation industry, which is lagging behind in terms of digital modernization, so it thinks there is an opportunity to help that industry drive more sales.

A bigger talent pool

It still takes an average of six months, up to a year in some cases, to hire a new employee at Digitrips, a French business-to-business travel technology group whose businesses include online travel agency Misterfly.

So that company sees an opportunity with the larger pool of talent coming from Big Tech layoffs, said Emilie Dumont, CEO of Digitrips.

“No, we’re not concerned about that,” Dumont said. “To be quite honest, we’d prefer to see that, as probably the tension in tech hires might be a little less high in the next few years. Maybe if there’s less tension in the tech profiles, that could help us have a shorter hiring period.” .

Maurice from Busbud had a similar thought. His company has hired 20 people in the past six months and has another dozen positions open.

“I think at least for now, we see it as an opportunity, but we’re also being very conscious and cautious about not stepping on the gas that much, just looking at the market signals and adjusting our hiring accordingly to what we’re seeing in the market. Almost taking it one room at a time,” Maurice said.

While demand for talent outstrips supply, Brooks of recruiting firm Gail Kenny warns travel tech companies that others are also looking, and finance-related tech companies can typically pay more.

“There is a war for talent in travel to get good candidates, but there are people coming from industries outside of travel looking to get that,” Brooks said.

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