Every App Wants Your Booking. Nobody’s Cracked It Yet.

On Monday’s Good Morning Hospitality, A Skift Podcast, Wil Slickers, Michael Goldin, Brandreth Canaley, and Jamie Lane break down why Airbnb, Uber, and TikTok are all making the same bet at the same time and what it actually means for operators. Plus: travel costs are running double inflation, and most hotel brands have more than one Gen Z problem.

This episode is presented by ⁠⁠Cloudbeds⁠⁠ & ⁠⁠Bilt⁠⁠.

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Good morning.

Happy Monday.

That’s right, we are back, and it’s the best day of the week, and it’s Monday morning. So what better of a way to get started than y’all’s beautiful face?

Did you guys do anything fun this weekend?

Jamie?

I’ll say I got back from LA on Thursday, on a beautiful trip out to Southern California. Oh, yeah.

Do you want to give us a little VIRMA update?

Yeah, the VIRMA Executive Summit. It was, I was biased because I was on the planning committee, but I thought it was a bit of incredible content that was had.

No bias at all.

Did you get a speaking slot this year?

I gave myself one, yes. Jason and I from KeyData co-presented on the economy and outlook for the industry, and I did this really fun, I thought it was fun sort of thought exercise on the impact of AI on travel demand over the next five years.

So I’m going to write it up and share it somewhere.

But TLDR, thumbs up, thumbs down.

I think it’s a huge thumbs up and productivity gains are going to translate to more leisure, more income for everyone.

Well, where’s the applause button?

Well, there it is. And so I think, you know, we always kind of lately have been talking about how conferences feel afterwards. Do you feel like it was a good, like good networking, like people were getting a lot out of it?

You know, it’s a smaller group, so maybe more meaningful conversation.

Yeah, I’d say I definitely had some great conversation. As someone that also had a booth there, I think the, and it’s probably not worth it to have a booth.

And maybe some people got something out of it, but the booths were split between in the room and out of the room. And at first, I was excited that I was in the room. But then it was, I couldn’t really talk to anyone.

So I want to be in the room.

Never want.

But for someone that wanted to actually listen to all the presentations, it was great. Because I didn’t have excuse not to be in the room. There you go.

Nice.

Brandi, you get in anything?

Well, I was in New York this weekend. Of my childhood.

You’re staying at home all month.

Yeah. No, it’s happening in June. It’s happening in June.

I’m not going to be in town next weekend either. But my friend from Ireland was coming in for a wedding. And so like six months ago, I was like, I’ll come down so I can see you.

So it was very nice. And the weather is gorgeous finally in the Northeast. It feels great.

So yeah, just that’s just bopping around the Northeast.

I love it. Well, we’re in our last week of school down here with the elementary school boy. Last week of baseball and then next week, we’re heading to Dolphin Island, do some fishing.

So nice.

Where’s that?

It’s Barrier Island to Mobile in Alabama. It’s a great hidden gem. Yeah.

Oh, hey, great segue.

Yeah. Well, today we’re talking about some of our big favorite tech companies, Airbnb, Uber, TikTok, Gen Z, AI, all the big buzzwords. But before we jump into that, quick shout out to our sponsor, Plusgrade.

Plusgrade helps travel companies unlock new revenue through upgrades, premium experiences and personalized offers across the traveler journey.

From airlines to hotels, they’re powering a lot of the behind the scenes monetization that you’re seeing today. So you can learn more about them in the show notes and at plusgrade.com.

5:23

Travel Ecosystem Ownership

So big story of the episode. Kind of like ties into a lot of things that we’ve been talking about over the last couple weeks, but Airbnb and Uber are kind of fighting to own your entire journey beginning to end.

And we’ve been talking about who, like are they going to be successful? Is it going to be possible? I mean, technically they might be able to do it, but are people going to jump on board?

And the articles that you’re talking about is going to be a little tough. It’s not as easy maybe as they want to make it seem. So do you have any quick off the cuff thoughts about either of those companies?

So I’ll start by saying Airbnb launched experiences what, 10 years ago, and it’s never really caught on.

They launched services last year, of which they’re doing their tests, but it still hasn’t really caught on. Has anyone yet used Airbnb service? Man, guys, we haven’t tested it at all.

Have you?

No?

I have. I just have done experiences maybe like three times total.

But the fact that the three of us haven’t done it once, I think I’ve done quite a few experiences, but services not yet, and so something, but-

Let’s do it at Guest Eval in Madrid. Yes. We’ll sign up the service, we’ll figure it out, we’ll do an experience, test out the whole platform.

But so Airbnb’s got their big summer release this Wednesday.

So I suspect we’ll see and hear a whole lot more about what they want to own in terms of the experience and travel. I’m going to do an interview with Dave Stevenson, their Chief Business Officer on Wednesday.

So we’ll get that release sometime afterwards. But question for you guys in terms of, and what is it going to take Airbnb to actually own more aspects of travel? So you think about what they’re trying to do here.

They’re like, all right, we got you to plan your destination and book your travel on our platform, or at least the lodging.

You did the flight somewhere else, and who knows whether they’re going to eventually launch flights, but it probably doesn’t matter that much because no business has earned that much in terms of overall on flight.

So you’ve got the experiences, the services, the car transfer, and if you’re going to rent a car, like all these different things that someone could, the tour, could actually book.

Like what is it going to take that to happen in the Airbnb app versus via tour, get your guide or booking or one or just, and so much of it happens offline that it’s going to take a wholesale change of bringing these experiences and stuff like

Well, I think we’ve talked about this when they launched services and it’s mentioned in the article as well.

There’s no incentive for hosts to promote any of this at all. So I think not that that’s going to be the only thing that would get people to participate more, but that’s the biggest purchase that you’re making in the app, right?

And so the provider of that service is not incentivized at all to be like, hey, and here are the people that I always recommend in the neighborhood to do whatever.

And I think about, especially when you go to places where things are done less online, where if you go and get the local experience, you’re not going to be booking it through an app. I think that’s also part of the, it’s not a problem.

I mean, it’s a problem for Airbnb, but some of the world doesn’t exist through app bookings. And some people prefer it that way. You don’t need to book every aspect of your trip through the app.

So there isn’t an incentive for the host to do any of that integration or inter like, you know, connection at all.

And then some of the experiences and services that you’re doing in different places like Brazil’s of an emerging market, like you’re not going to be doing all that stuff on the app.

You know, you’re not finding your favorite pozole place on the Uber Experience app. Or maybe you are. I don’t know.

Yeah, I think a lot of it is misguided and probably the wrong question.

Booking’s been going after the connected trip forever. All of the news I’ve seen over the past month points in one direction for me, and that’s the B2B play. Have your inventory be where eyeballs are, and you’re going to be in a good position.

So, you know, what does it take for Airbnb to do it? The direction they’re going, they either have to become an OTA or become, or buy TikTok, right? And have a social media platform.

So I don’t really know. I don’t know if they’re taking the best direction. I love the hotels aspect.

I don’t know if the social media aspect makes a ton of sense. And on Uber’s standpoint, we talked about it a week or two back, but the winner of that, in my opinion, is Expedia.

I think that, again, if you have the inventory and you control the supply, not just of hotels but of flights, of short-term rentals, of tours and activities, and you pay commissions out, people are going to be incentivized to promote you.

And that money now goes, and we’ll dive into this later with TikTok, but that money now goes to creators’ hands instead of Google’s hands.

Yeah, I know we talked about how adding flights isn’t the most, like that’s not where these companies are going to make money, and maybe that’s one of the reasons why Airbnb isn’t diving into that.

But I think about from the user perspective, whoever really can create that seamless journey of like, here is my flights, here is my accommodation, and book the taxi pickup service or the limo service or whatever kind of car, like that’s, I feel like

that has a lot of value rather than, I mean, and the services and experiences, like all that is extra, but if you can just have the two big points that are expensive and are like the base of your trip, like how you’re getting there and where you’re

staying, and then the app can automatically fill in the like other transportation logistics, then that allows you as a traveler, especially on vacation, to be able to plan and do all the other fun things. But that, I think for me as a traveler, that

Yeah.

I was talking with the CEO of Local Bird. We had talked about their fundraise a few months ago.

And of like, how are you doing, like getting all these experiences online that weren’t online before and he’s like, and we’re doing the hard thing of like, interacting with these people that they’re giving the tours, they’re giving the surf lessons.

And right now, the only way they book is through WhatsApp. You know how we book it? Is we make the times available.

And then when someone goes and books it, then we have an automated way that sends them a message on WhatsApp that then confirms the booking and then gets back and messes the guest that it’s done.

It harks back, you listen to Brian Chesky talk about when they were first building Airbnb, it was like, we did the hard thing that didn’t scale to get otherwise inventory that wasn’t bookable online, bookable online.

And now it feels like maybe they’re going the easy route and trying to get experiences and services of and only going through ones that are already, and having and ways to book and like, it doesn’t feel like they’re doing the hard thing yet.

And maybe that’s why they’re focusing on just a few markets of like, what are the hard things that they have to figure out to get there?

There’s not a startup anymore.

Yeah, they’re not a startup anymore.

And there’s a lot of red tape and bureaucracy and no one has the ability to go and make decisions on their own.

And liability, you know?

So is now the play, the only thing they can do is like DoorDash integrations. It’s the B2B play of like, you’re gonna have two ecosystems emerging. It’s Airbnb, DoorDash and whatever.

And they launch with sort of car transfers, things like that. And then you’ve got the other side, it’s Uber Expedia. And there’s emerging two different tech stacks of travel.

All right, who’s gonna win in five years, Jamie?

And I think it’s like Android and Apple, like no one’s won.

And it’s a healthy dueling ecosystem that people sort of decide which ones they want to integrate into.

You should become a politician. That was a heck of a non-answer.

But I also, I support Jamie’s non-answer because I don’t want there to just be Airbnb or just Uber Expedia or whatever. Like that just is so, because then you’re just, I mean, that’s a monopoly. You’re trapped in this with whatever they decide to do.

You have no other alternative. So I hope everybody wins. Or they both lose and something better.

Or something better. Like what I have been thinking about when we talk about all this, like the talk of these huge tech companies that are just, you’ve taken over every facet of our lives. It’s like, what is the next thing going to be?

Like what is, who is the newcomer that’s just going to break all this shit up? Because that is more exciting to me.

I completely agree. I cringed in my head when you talked about at the top of the show, Brandy, booking, TikTok, Expedia, Ubers. Like, oh man, this is-

Doesn’t it suck?

Yeah.

Ouch.

But there is the third arm, which is booking, who to Michael, to your point, is trying to do everything and make all of it bookable through the third.

15:42

TikTok Travel Discovery

Maybe it’s a good transition to talk about the TikTok story, because they’re now making, essentially all aspects of the trip, bookable, so it stays experiences, where when you do a TikTok video, you can connect the, what is the hotel, what is the

experience that you’re doing, and then making it bookable through the TikTok app. I was just going through it this morning, where before it was like one partner, and you’re sort of forced into that sort of app to then book it.

I went and saw a hotel and clicked on the link to book it, and then I got positioned that there was, I could book it through trip.com, I could book it through Expedia, I could book it through booking.com.

There were all these options that for me to then compare prices, compare what I actually want, and then convert that booking. I thought it was actually an incredible experience, driving me to book something while I was being entertained by a video.

It’s like if things were bookable on TV, like product placement, and that’s something that’s huge today, that is now, and it feels like the future in terms of making travel bookable during entertainment.

Yeah. And we had Paul chime in and say, at this rate, the only loser is the travelers themselves.

Brutal.

My hope, expectation, and the ongoing discussion that I’m having with a lot of folks is that AI can help chip away at that.

The LLMs with the proper technology, you can take a little bit of control back, more towards direct bookings and less from the power brokers that be.

So, God willing, there’s a little bit of shake up with the big tech companies, with other big tech companies at least.

But that said, yes, right now, the only losers seem to be the travelers themselves, because rates are higher than ever, and we’ll get into that later on the show.

Yeah. Jonathan commented that we need a new term for this phenomenon called meme booking. Listen, Sarda, we can say it originated here.

But before we jump into how TikTok and Gen Z Travelers, that is all blending together, we want to give a quick shout out to our other sponsor, Bilt. This episode is brought to you by Bilt.

They’re helping restaurants and hotel F&B teams better understand their guests and create more personalized experiences. These all drive repeat visits. So if you care about loyalty and the guest experience, they’re definitely worth checking out.

You can head to joinbilt.com/gmh or find the link in our show notes. So obviously, talking about TikTok, we have to talk about Gen Z because as Michael pointed out off camera, all that no millennials are on Gen Z apparently.

Except for one on this show.

Except for one, it’s just Jamie. But it’s great that the TikTok announcement and this article are coming out around the same time because for a while, us millennials had our time in the sun.

How was the world going to address us and all of our consumption habits? Now, Gen Z is getting the spotlight and how our brands going to reorient their practices.

It does feel weird that it’s not just complaining about millennials, and now we’re complaining about the next generation. We’ve made that transition.

I was like, oh, shit, we’re old now?

No.

What’s better than a podcast of three millennials complaining about Gen Z though?

I know.

Hey, we’re not complaining. A TikTok video with Gen Zers complaining about millennials.

Yeah. It’s a bigger article, so I definitely encourage everyone to go check it out. The link will be in the show notes.

It’s called Travel Brands Think They Have a Gen Z Problem. Most have two. If you think you’re unprepared, you might be doubly unprepared.

But just talking about the unique challenges of how you attract and maintain this next generation that has a ton of spending power. The four quadrants are hidden gems, go-to favorite, off the radar, one and done.

This basically is talking about how the products resonate with Gen Z, and then what is the distribution alignment, and how discoverable is your product.

One thing I just thought was kind of interesting, it was also a millennial thing, not just Gen Z, but our generations both desire to find something that is unique and special, but then the mere fact that you are finding it on TikTok already means

that it’s not unique and special. If something is off the radar and impossible to find, and then you do find it, then that actually means it’s a hidden gem or that’s off the radar.

But I don’t know, maybe that’s just my old lady millennialness coming out, that you can’t find hidden gems and off the radar places online.

I think it’s entirely how search is changing.

We grew up searching on Google, we grew up searching on TripAdvisor, and now the search is switching to TikTok, it’s switching to Instagram, and you go and look at that new TikTok booking window, it looks entirely like Google Hotels in terms of

you’re going to compare, you’re going to then convert book through one of those apps. The biggest question is, where are you, and where’s Hilton, where’s Marriott, where are the direct booking apps showing up on this new way to search?

It feels like they’re already behind by not being partnered with TikTok to make their own properties discoverable as well.

Yeah. And Brandy, I think your era of traveling and my era too, and Jamie’s as well.

Yeah. I was like, don’t sickle me.

You’re older than both of you. We’re old.

Mike, I saw your comment and I literally laughed.

Welcome to Old Colonial.

I laughed for a good minute. But that era is over. The hidden gems are found online today.

And there’s a perfect example of this. There’s an awesome coffee shop 20 minutes from Auburn out in the middle of nowhere in Waverly, Alabama. Waverly is literally not even a stop sign town.

There is a really good restaurant and a fantastic coffee shop. And it started getting really crowded. And I asked people like, how did you guys hear about this?

And the younger generation said TikTok. It’s like, wow, this is how hidden gems are found. It’s no longer word of mouth.

It is word of screen, doom scroll.

Yeah, doom scroll. I mean, even just like the terminology makes me sad.

But I think one of the, and this has been a thread that we’ve talked about before, but that the reliance on loyalty is like, that is a dangerous play for some of these bigger operators and legacy OTAs, just like assuming that that’s how Gen Z is

going to continue to book and like relying on these kind of behaviors of the past. So and, you know, one of the quotes from here says that leadership could read some of the discovery numbers from TikTok and view it as validation and double down on

something before they fix the product that they have. So I think that’s, I think there’s like, oh, if we just like figure out how to get this in front of Gen Z, everything’s going to be fine without addressing, does the product serve what Gen Z

Well, and the discovery comment is also a fascinating one because you look at booking and Expedia’s B2B play.

The top line discovery on the social medias or the LMS or whatever can be super high with conversion super low. Conversion from Google Ads to bookings is probably as good as you’re going to get in terms of marketing spend.

But some of that might be going away. There’s going to be ads in the LMS soon if there’s not already.

But it doesn’t really matter the conversion rate if Jamie, influencer Jamie over here on TikTok, drops his Expedia link in and gets a commission on it. He gets 100,000 views.

He gets two trips sold, which would be an awful conversion rate by the OTA’s standards. But for him, that’s another 7 percent of two trips that he goes straight into his pocket for his own family vacation fund.

So I think the conversion rates are going to change a lot with this new model of changing how we see and view and click on travel.

So Michael, this is how I feed my family.

Hey, influencer Jamie, I’m here for it.

Your DNA is not paying enough. Being a chief economist doesn’t pay well these days. You have to turn to influencing.

But I think that it’s really, I’m always surprised that Instagram didn’t get here in the same way that TikTok has.

But maybe this is how we have a little bit more of a democratization of travel, spending and advertising, and maybe this is, it’ll just be interesting to see how this gets dispersed amongst the travel influencers.

Michael, if you think about your coffee shop, they’re competing against Starbucks or whatever that coffee shop is in the next town over, that has the massive distribution. Now, their ability to stay alive and thrive is because of…

Yeah, it’s a 30-minute wait just to get inside to order your food. I mean, I’m really happy for them, right? That’s a great thing.

And it doesn’t really take away from the experience from my standpoint, but it’s not where you go and grab a quick coffee.

Yeah, it’s funny. There’s been a lot of like online discourse about people, like the practice, I won’t call it a hobby, of like standing in line. Like we’re all just waiting in lines for things.

And I was thinking about this because in New York yesterday, I met up with a friend to get bagels before I left. We went to Apollo Bagels in East Village. And first of all, one of the best bagels I ever had, totally worth it.

And I got there before him and I looked and I was like, am I about to wait in this line? Like how? This is ridiculous.

Like I mean, bagels, I mean, people in New York don’t kill me, but most bagels in New York are great. So a bagel is a bagel. But the line moved really fast.

And honestly, this bagel is one of the best bagels I’ve ever had. So I was like, I guess I am going to, yes, I am waiting in this line. And honestly, I’d probably go back and wait in that line again.

So it’s just interesting that like now, we’ve been kind of trained and conditioned.

Like if this place has the validation and legitimacy of, our online peers and then the IRL peers, we’re willing to just like waste 15 minutes to or more to, stand in line and get that cup of coffee or that bagel or whatever it is.

It’s part of the experience, but it does then raise the expectation. So it has to deliver. And back to the skips framework, there is an entire category of one and done.

And that is a lot of travel, right? People say, oh, I’ve done Paris, right? Check.

You can’t really do Paris, but if you view travel as a checklist, then congrats. You’ve checked off that piece on the Monopoly board.

But yeah, I love the tagline for one and done. Visible but disappointing.

You took your Instagram picture. You made your TikTok real.

Exactly. Well, and this is the aversion to the beige boxes. This is where the big box chains might start to suffer.

When you don’t have the business travel and Gen Z is like, okay, I want something that feels unique and your beige box with your weird carpet is just not going to do it for me.

No, I like that it rewards quality and ultimately like, and we had talked about TripAdvisor, we had these other sort of ways to indicate quality through people reviewing and this is just another one where, and quality rewards and strong sales.

29:04

Travel Cost Inflation

So I do want to mention our last point, our last story around inflation, because this is a travel story, whether we like it or not.

In April, inflation CPI came in at 3.8 percent, and when you look at all other aspects of travel, and as Bailey called out in her great article, they’re running at roughly double the rate of inflation.

So, gasoline was the major driver and other fuel costs on the high inflation print this month. Inflation up 28 percent year over year for gas, and it’s a huge increase.

Yeah, it’s brutal.

Yeah. Gas prices averaging over $4.50 a gallon. And Michael, you said you’re getting ready for a road trip.

I’m getting ready for a road trip next week too. Driving out to Litchfield Beach in South Carolina. It’s going to cost a little bit more.

So all those drive-to destinations, going to feel it, all the spots that rely on inbound flights, airline flights have gone up significantly in the past two months since the war in Iran started.

And just a friendly reminder, the Strait of Hormuz is still closed. So there is hope that it’s going to reopen, that as we get into the summer travel season, but this is likely to get worse before it gets better.

There could be real shortages of jet fuel in Europe this summer. So it is still a huge concern and a huge risk for our industry that is now showing up in terms of higher costs.

Yeah, I think it’ll be interesting to see how this plays out in the high seasons that happened this summer.

Like as a lot of that locked in already, people have already booked or have already made the commitments and they had the deposits down, so they’re not going to feel it so much.

Or we have already been talking about how the booking windows have shortened dramatically. Is this going to maybe not impact June and July, but impact like the August travel?

So it’ll be really interesting to see how the data shakes up as the summer goes on. I was doing the math when I’m going down to New York, either like fly, take the train, or I drive.

And it just kind of depends on like who I’m seeing, where I’m staying, all this stuff. And driving was cheaper because the Amtrak tickets, you know, dynamic pricing, I can’t stand that on the train. That it really drives me nuts.

And I was like, I’m not going to spend over $300 on a train ticket, like not the Acela. I was like, out of principle, I’m going to drive. Crazy.

But we’ll see. We’ll see what happens.

Dynamic pricing does not have a place in everything. I saw some, and it was probably fake, but some grocery stores have started inserting some layers of dynamic pricing.

It’s so messed up. That’s not okay. Not okay.

There’s an article in the New York Times this weekend on how New York legislators are going to essentially ban it, dynamic pricing for food and grocery stores.

I think there’s another state that I can’t remember, but I saw that people are starting, or at least another city, it’s getting banned, because that is wild.

That’s just-

Yeah. By the time you pick it up, it could change by the time you check out.

Yeah. It’s so great. Incredible for vacation rentals, maybe not what we want for our food.

Yeah.

For airlines, makes total sense, but yeah.

Yeah.

But not on friends.

Not a place in our everyday life. Well, next weekend is a big holiday weekend. So do you guys have fun plans coming up?

So that’ll be fun. Start to summer.

Yeah. I won’t be on the show. There’s no internet at the Fishing House in Dolphin Island.

So you’ll have to wait one more week to hear my voice. Jamie, you have internet where you’re going?

I do have internet. Brandy, I’ll come back and join you.

Yeah.

Let’s circle up.

I’ll fly about that.

Talk with producer Will on our availability.

Yeah. I’m going to be in Detroit for a festival for the weekend.

So you are the epitome of millennial.

I know. I’m going to be in this guy. You just said you’re not traveling.

But then after that, that’s when my month of no personal travel starts.

I don’t believe it. All right.

Listen, let me lie to myself a little bit, Michael. I have to live in some sort of delusion for a bit.

Our viewers will find out the truth, Brandi.

Yeah, exactly. Our viewers can hold me accountable. Well, thanks everyone for tuning in.

Really loved the engagement today. Jonathan, all the way from Nairobi. That’s very fun.

So Mike, Ben, Paul, Jonathan, thank you so much for tuning in. We will see everybody else next week.

Or not.

Or not.