March 16, 2020 / 1:01 PM / 5 months ago

German travel tech startups hunker down for 'nuclear winter'

BERLIN (Reuters) - Online travel startups based in Germany are hunkering down to survive a coronavirus pandemic that threatens to inflict a “nuclear winter” on the travel industry as bookings plunge and borders close.

FILE PHOTO: A coach of German mobility platform FlixBus that runs bus and train services, arrives at a bus depot in Munich, southern Germany, August 22, 2019. REUTERS/Michael Dalder/File Photo

Berlin-based GetYourGuide and ticket booking website Omio said they planned to spend the expected quiet period working on tech systems to ensure they were more competitive when travel resumes in earnest.

“In the next couple of weeks I think we’ll all just go into hibernation mode. We’ll work on our tech, our infrastructure and our supply offering, and make sure we have everything in place for when travel picks up again,” said Johannes Reck, co-founder and CEO of GetYourGuide (GYG).

The company, which specializes in experiences such as museum visits and walking tours, said bookings worldwide halved two weeks ago from forecast levels after a record start to the year.

Travelers have become more hesitant and are seeking alternatives closer to home - preferring outdoor excursions to avoid crowds or indoor settings that would increase their risk of infection, Reck said.

Omio, which offers bus, rail and flight bookings, has seen a decline in bookings of 30%-50% and is bracing for falls of more than 50% if borders close.

Unlike airlines, for example, which must keep their planes in the air to keep going, these digital businesses have a far smaller fixed-cost base as most operate as middlemen between travelers and transport providers.

Omio spokesman Boris Radke said it had the flexibility to slash spending on marketing and devote the quiet period to improving its search engine optimization, the technology that steers customers to its app.

“The entire European Union might shut its borders for two weeks. We should be able to live with that,” he said.

Tracking the exponential spread of the virus across Europe, governments have imposed restrictions on people’s movements - including lockdowns in Italy and Spain - with a spate of border closures announced over the weekend.

Munich-based bus and train app Flixmobility suspended its services throughout Italy and halted cross-border connections to and from Italy on March 11.

Border closures in Europe mean Flixbus services to and from the Czech Republic, Slovakia, Croatia, Denmark, Poland, Bosnia Herzegovina, Serbia, Spain and Portugal and Germany will be affected in the weeks ahead, it said on its website here

“We’re continually adapting our offer to the decreased demand,” the company said, adding it was working with operators of its green Flixbuses that are a frequent sight on European highways to counteract the economic fallout.

GetYourGuide’s Reck said the travel industry was facing a nuclear winter: “Just survival over the next 12-24 months, by any travel company, will be a massive competitive advantage.”

Reporting by Douglas Busvine; Editing by David Clarke

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