Last year was a rough one for Bacarai Inc.
The Orlando-based group airfare booking startup saw cancellations pour in throughout March 2020, bookings dried up for the rest of the year and the firm cut its staff of 15 people to seven.
Eighteen months later, Bacarai’s bookings are up to 70% of pre-Covid levels, and the company is hiring back some of its furloughed staff. The company has not fully recovered, but Bacarai expects to make up for the losses of 2020 by next year, co-founder and COO Kenny Totten told Orlando Inno.
Technology firms that enable air travel and hotel bookings are present throughout Orlando, one of the world’s tourism hubs. These companies were hammered by the pandemic’s effect on travel in a similar way to hotels and airlines, but they’re betting on a full rebound next year as business travel catches up to leisure travel.
“Our groups book 7-10 months out,” Totten said. “We got a good feel of what next year looks like. We feel like we can get back to growing the business 30%-50% year-over-year.”
The pandemic wreaked havoc on tourism in 2020 and continues to cause disruptions in 2021. Locally, Central Florida’s 54% average hotel occupancy in the first six months of 2021 was down from 80% for the same pre-pandemic period in 2019, according to The Business Journals data.
Additionally, more than 62,890 flights came into the Orlando region in that period this year, down 15% from 74,336 flights in the first six months of 2019. The data does not specify leisure or business travel, or visitor origin. However, industry experts have said leisure travel has been pacing strong in 2021, while business/corporate travel remains mostly absent.
Reservations.com witnessed this trend firsthand. The Orlando-based online hotel bookings platform operator had more than 60% of its bookings get canceled in March and April 2020, co-founder Mahesh Chaddah told Orlando Inno. “Our expenses were upside down. Revenue was upside down. It put stress on the company’s cash flow.”
However, the company’s outlook this year has shifted dramatically. An uptick in domestic leisure travel started in August 2020 and surged alongside the Covid-19 vaccine rollout, Chaddah said. Today, Reservations.com, which will go public this year in a three-way merger, is experiencing double-digit bookings growth compared to 2019. “Whatever we were doing in 2019, we’re doing double that.”
Reservations.com’s recovery was aided by a decision early in the pandemic to ramp up its customer support staff in anticipation of travel returning, Chaddah said. This put the company ahead of some competitors and prepared it to meet the onslaught of questions from cautious travelers. The firm, which will stay in Orlando after the merger, is optimistic about 2022 as business travel in sectors like sales is already returning, Chaddah added.
Meanwhile, Bacarai’s immediate goal is to get its bookings back to pre-pandemic levels. Plus, Totten said “healthy” growth for Bacarai in 2022 would be a 25%-50% year-over-year increase in bookings.
Canceled school trips and long-delayed corporate events have built pent-up demand in the group air travel space, Totten said. That was evident when Bacarai booked $2 million in airfare in the previous 60 days, Totten said on Sept. 21. “Last Thursday, our team requested 98 contracts with Southwest in a single day. It was a busy day.”
Investors haven’t given up on the travel tech space either. Potential deals with companies in the sector may face higher levels of scrutiny, but there are still investment opportunities, said Ryan Whittemore, chief investment officer of Florida Funders LLC. The Tampa-based firm is the Sunshine State’s most active venture capital investor, according to CB Insights.
“Whether or not Covid goes away entirely, there’s an itch for people to travel and see the world. People will continue to travel,” Whittemore said.
Despite the optimistic outlook, corporate travel may not fully rebound next year. In fact, an August survey by Deloitte found only half of companies expected their travel spending to reach 2019 levels by the end of 2022. Still, surges in leisure travel combined with moderate recovery in business travel may be enough to return travel tech firms to growth mode.
“Leisure travel is not going away, but people are not waiting for one summer vacation to Europe. They’re taking three or four trips during the year,” Chaddah said.
OBJ Digital Producer/Senior Staff Writer Richard Bilbao contributed to this report.
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Orlando travel tech firms foresee 2022 boost as biz trips return – Orlando Business Journal
Last year was a rough one for Bacarai Inc.