Revenge Travel and Tech Tightening Its Belt

As international travel slowly returns, the term “revenge travel” surfaces.

“Revenge travel is a media buzzword that originated in 2021 when the world began to reopen, and people decided to make up for lost time,” says Erika Richter, vice president of the American Society of Travel Advisors (ASTA). Internet forums for popular destinations bristled with comments from zealous would-be travelers, and now in 2022, many are making plans to embark on their long-delayed trips.

But while travelers prepare to scale up, have air carriers scaled down? And what about investment — do conventional businesses have the edge over flashier but less traditional market opportunities?

Aircraft, parked

Carriers must adapt continually to changing travel conditions. Last year, Hong Kong-based Cathay Pacific “put 92 jets, or 44% of its passenger fleet, into long-term storage at locations in Australia and Europe.” The numbers were confirmed by Cathay Pacific Group Chairman Patrick Healy [in March 2021] while…delivering news of a 2020 calendar year loss of USD2.79 billion.”

The arid desert climate of Australia’s Alice Springs — situated roughly in Australia’s geographic center — is ideal for storing large complex machines like aircraft. “While parked Singapore Airlines’ Airbus A380s tended to steal the limelight at Alice Springs, Cathay Pacific was also sending scores of planes there,” said simpleflying.com. “Cathay Pacific’s low-cost brand, Hong Kong Express, has A320-200s and A321-200s parked in Alice Springs. Also in the mix are aircraft from the now-defunct Cathay Dragon brand.”

As travelers prepare to scale up, have air carriers scaled down?

According to marketwatch.com, “Cathay Pacific said it is on course to offer to fly to nearly 60 destinations by the end of the year, as Hong Kong’s recent removal of hotel-quarantine requirements for arrivals helped boost travel sentiment. The airline said Monday that it carried 265,845 passengers in September, just about double the amount from a year earlier, though the figure is still down 89% compared with pre-pandemic levels in September 2019.”

“We remain focused on adding as many passenger flights as we can,” Cathay’s chief customer and commercial officer, Ronald Lam, said in a statement that MSN reported. It also noted that ‘hundreds’ of cabin crew and pilots, who departed amid tough COVID-19 travel curbs, had recently returned to their jobs but that it was a race against time to hire more to cope with the expected increase of flights when restrictions are further eased.

“Our focus right now is to add as many as we can this year and in the year 2023 and 2024,” Cathay general manager of corporate affairs Andy Wong said at the recruitment event. “By the end of this year, we will be flying at around a third of our passenger capacity and two-thirds of cargo capacity from pre-pandemic days.”

As an established company founded in 1946 and the flag carrier of Hong Kong, Cathay doesn’t depend on tech trends to help drive investment. But newer firms with less-conventional business models do.

And nowadays, as economic conditions bite, investment tightens.

Clicks-and-mortar

In the late 90s, powerful buzz surrounded the “clicks-and-mortar” concept. Pundits predicted that online shopping would supplant conventional “bricks-and-mortar” stores.

But as entrepreneur Jeff Bezos added more product lines to his fledgling Amazon service, others were skeptical. Nowadays, the brand is considered a blue chip in the e-commerce space.

Other e-commerce services aggregating products from fresh food to musical instruments proliferate. Singapore-based Shopee “has yet to turn profitable despite increasing its gross profit margin year-on-year in the first half of 2022, attributed to faster growth in transaction-based fees and advertising income,” says Wikipedia. “Coupled with rising inflation and interest rates as well as setbacks on its internationalization plans, Shopee laid off staff across multiple markets in June 2022, including employees from Indonesia, Thailand, and Vietnam.”

“Shopee, the e-commerce arm of New York Stock Exchange-listed Sea, had earlier this year cut workers in its ShopeeFood and ShopeePay teams in the region,” said a report in Singapore’s Straits-Times. “Its parent company has been undertaking extensive cost-cutting measures in recent months, with questions over its money-making prospects intensifying amid the challenging global environment and widespread decline in technology stocks.”

Firms operating in the 21st century “clicks-and-mortar” space (nowadays terms like “gig economy” are preferred) often have anemic balance sheets. A glaring example is Meta, which “has sunk more than [USD]15 billion into its metaverse project since the start of last year,” according to Business Insider. “The precise details of where that money has gone remain fuzzy.”

Capital drying up

“With capital drying up, tech firms are doing everything to stay afloat,” writes David Kuo, co-founder of Singapore-based investment firm The Smart Investor.

“There will be no white-knight investors riding to any start-up’s rescue this time around,” writes Kuo. “Times are tough and will become tougher as central banks around the world work in unison to tame inflation. Consequently, raising fresh capital will not be easy.”

As Kuo notes: “Companies, therefore, need to focus on their cash conversion cycle and look at ways to shorten it. They could try to collect outstanding payments more quickly or negotiate better credit terms that could let them pay suppliers more slowly.”

“The larger the cash pile, the longer a company can survive a recession.”

Stefan Hammond is a contributing editor to CDOTrends. Best practices, the IoT, payment gateways, robotics, and the ongoing battle against cyberpirates pique his interest. You can reach him at [email protected].

Image credit: iStockphoto/eggeeggjiew

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