What’s next for the travel industry when a post-coronavirus economic recovery occurs, and what will be the next entrepreneurial move for Adam Goldstein, the co-founder of Hipmunk and currently a visiting partner at Y Combinator?
Goldstein was Skift founder Rafat Ali’s guest Friday in his weekly podcast, The Long View [embedded below], and they discussed travel startups, the prospects of a recovery, Google, and online travel trends, among other topics.
Ali asked Goldstein whether his next business would be in travel should he start one.
A Travel Startup? Nope
“I hope not,” Goldstein said, referring to the prospect of launching another travel startup. He added that he learned from his Hipmunk experience that relying on airlines to pay for services “is just about the worst business you can have.”
Goldstein and co-founder Steve Huffman sold Hipmunk in 2016 to SAP Concur, which shuttered the metasearch brand in January 2020.
Travel Content Startups
Are there viable opportunities in so-called “top of the funnel” travel content or inspiration startups?
Goldstein characterized the concept as the worst idea in one of the most most difficult industries, adding he would never consider investing in one.
Founders erroneously think people want advice on where to travel, but half of travelers do so for business, others get their ideas from family and friends, and much of the rest go to popular destinations, he said. Only a small slice of people want trip advice, Goldstein added.
Ice Cold Investment Environment
Ali asked Goldstein whether the pandemic will hurt the travel investment environment.
Referring to that investment environment, Goldstein said “travel has been cold, but now it will be ice cold.” Perhaps it will thaw, he said, but investors will be shy because they’ll have to wonder when the next pandemic will occur.
Personalization? No. Travel Insurance? Yes.
While Goldstein thinks there are plenty of opportunities inside and outside of travel for software companies that can help companies better understand their own businesses, he’s not bullish on the personalization trend.
Goldstein said travelers indeed desire good experiences and advantageous prices, but a lot of people really enjoy travel planning. He said he’s skeptical about personalized services that claim they’ll do that trip-planning for people.
He predicted startups will try to disrupt the travel insurance sector.
What Struggling Online Travel Agencies Did Wrong
“I think what Expedia and Priceline and Booking and all those did wrong — again “wrong” — is that they were in the travel business when Google got in,” Goldstein said. “That’s the original source of pain for them. If it weren’t for Google, [then] Expedia and Booking, they’d be fighting each other, but they’d be doing fine. Google has really hurt them.”
If He Was Still Running Hipmunk
Ali asked Goldstein how he might handle the pandemic if he was still running Hipmunk today.
“I’d be crying myself to sleep right now,” Goldstein quipped.
He said many travel companies are going into “hibernation” now, furloughing employees, suspending operations, and trying to arrange financing to survive.
Goldstein said if Hipmunk was still operating, he’d hope it would have pivoted into some new business to bring in some revenue, not “zero,” and perhaps it would have pivoted into a metasearch for groceries, he joked.
Leisure Travel, Not Business Travel, Will Be First
A substantial number of people will be infected with coronavirus, and if they find out that they have little to chance to be reinfected, then they will be “free to travel,” Goldstein said.
However, businesses will have to make a really strong case to restart sending employees on the road and restocking travel budgets, he said. “I don’t think business travel will come back that quickly.”
How About a Nice Cruise?
“I think you have to be out of your mind to take a cruise right now if you are over 50 years old unless there will be a vaccine,” and he’d feel the same six months from now, Goldstein said.
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