Scottish startup bucks travel sector woes, by Nick Freer

Back in February, when it felt like we still lived in a pre-Covid existence, I attended and helped to publicise the Travalyst conference at the EICC in Edinburgh alongside Prince Harry’s (when he was still called Prince Harry) team at an international business event that featured industry sector players like Booking.com, TripAdvisor and Skyscanner. 

Like so much in our post-Covid world, how much has changed since then is one of those things you occasionally sit back and think about and it never stops being anything short of mind-blowing. The travel sector, in particular, has been turned on its head and it’s tough to see how our own travel tech superstar Skyscanner has had its wings clipped since the onset of the pandemic. 

In the autumn of 2017 when I was with my family up near Aviemore, I got a call from a contact who put me in touch with TravelNest founder Doug Stephenson. TravelNest, a platform positioned to support holiday rental owners, had been founded three years before, was building its product and team, making some impressive hires including Skyscanner’s former chief technology officer, and was on the verge of a £3 million investment round led by venture capitalist firms Pentech, Mangrove Capital Partners and Frontline Ventures.  

I spent the next couple of weeks giving Doug and his leadership team advice around the planned funding announcement from our own holiday rental property up on Speyside. Fast forward three years, and Stephenson and TravelNest are poised to be one of the rare winners in a sector ravaged by Covid-19. 

Catching up with the TravelNest team recently, I was keen to hear how staycation trends are benefiting the business since tourism reopened post-lockdown. Some of the numbers tell the story best, including a 250 per cent year-on-year increase in reservations in July when the platform experienced a record booking month with over £1 million in total booking value (TBV), the standard industry yardstick, achieved.  

As one of TravelNest’s marketing executives puts it, “since tourism reopened, significant traveler behavioural change has led to switching from international to domestic, hotel to vacation rentals and urban to rural”. All startups are on a mission and in TravelNest’s case it is to “dramatically improve occupancy while reducing administration time for vacation rental owners and hosts”.  

While vacation rentals through platforms like Airbnb, Booking.com and Expedia have risen rapidly, a high percentage of nights can still remain unsold, what TravelNest describes as a “disconnect between demand and supply”. When the travel tech startup points to over 80 per cent of properties being listed on a single channel, you get a clear picture of how market dynamics play to its advantage. In ‘startup speak’, it is ready to disrupt a fast-growing marketplace and already counts thousands of customers and properties on its site.

In a TravelNest traveler optimism survey carried out prior to the easing of lockdown, 73 per cent of respondents said they were likely or very likely to book a trip once Covid-19 restrictions eased; 84 per cent planned to take a trip over the next twelve months; 88 per cent of people said they would prefer to travel in their own car and 66 per cent said their preference was for a holiday rental. Pre-Covid, vacation rentals made up around 15 per cent of overall holiday accommodation and the TravelNest survey says this percentage could quadruple over the next year alone.  

Data indicates that holiday rentals will continue to take market share from hotels, as after staying in a holiday home for the first time the likelihood that a traveler will choose a vacation rental over a hotel for future travel accommodation increases.

TravelNest and its team of over 40 people are advised by non-executive director Mark Logan, Skyscanner’s former COO, and the word on the street suggests they have a series of interesting announcements in the pipeline. The Doug Stephenson-founded venture was always considered “one to watch” on the Scottish startup scene and the shifting plates in the travel market have only upped its credentials in recent times. 

An edited version of this post ran as an op-ed in The Scotsman on Monday 5th October 2020