Travel startup can also have a crisis: "The ups and downs are part of our DNA"

Sunday March 14th 2021

Travel startup can also be in crisis
"The ups and downs are part of our DNA"

Before the pandemic, the online travel agency Tourlane was one of the greatest hopes on the German start-up scene. Then came the corona crash. A year later, co-founder Julian Weselek draws a positive balance: Flexibility is the key, orderly lanes are not necessary. "We're trying new things."

From high-flyer to problem child: The online travel agency Tourlane, like many other startups in the travel sector, was hit hard by the corona crisis. Before the pandemic, it was one of the greatest hopes of the German start-up scene, and was able to convince the legendary US financier Sequoia of an investment.

Last summer, the Grüner Julian Stiefel and Julian Weselek told in the Capital podcast "The Zero Hour" how their bookings collapsed at the beginning of the crisis. In the summer, the start-up saw a small upward trend before the second lockdown sent the company back into a kind of "hibernation".

How do you survive a year like this? How can a young startup afford that? And when could business get back on track? Julian Weselek asks himself these questions in an interview.

Mr. Weselek, how is Tourlane doing today, one year after the outbreak of the pandemic?

The situation is currently unchanged. We saw a slight upward trend last summer, but otherwise the booking volume has normalized to around ten percent of the pre-Corona level. We expect it will take another three to six months before the infection rate is stable enough for consumers to have clarity – and demand picks up again. Because we continue to see that customers want to travel. A booking just came in yesterday – for New Zealand in 2023.

Toulane co-founder Julian Weselek

(Photo: Toulane)

Three to six months before normalization – that is probably much later than you had hoped for last year, right?

We always thought and calculated in different scenarios. We have just reached a medium scenario. We were hoping that things would stabilize as early as January and people would start booking. Unfortunately, this is currently not the case. We are planning very conservatively with our company, we are still well positioned and our investors trust us. In November they expanded another financing round – that is the clear signal that they are following our strategy.

How did you react to the pandemic outbreak a year ago?

First we shut down marketing completely, then put operational and sales-dependent teams on short-time work. And then some jobs were cut, primarily for topics that have no strategic relevance over the next two or three years – that's how we stopped our international expansion. But there were also areas in which we deliberately did not adjust anything – technology, for example. We use the time in the crisis to make progress on the subject.

With what, for example?

On the one hand, it is about an improved customer experience and optimizing the visualization of trips with descriptions and images. The second is to connect more partners to our systems on the supply side so that they can be booked directly. And thirdly, we used the time to tackle issues that are difficult to improve during ongoing operations. Operational processes are difficult to change when you're traveling at 220 kilometers per hour. At the beginning of the crisis, for example, we were overwhelmed by all the cancellations and rebooking. Now we have built solutions with which we can implement this in an automatable and scalable way, even when traveling with 30 components.

Then in summer there was a temporary upward trend. How strong was it with you?

That went on for two to three months, always depending on the relaxation. During this period, we achieved around 40 percent of the sales volume from the pre-Corona period. But we also saw that only very few countries were considered as travel destinations. That was not because of the customers, but because travel was extremely volatile: flights were canceled from one day to the next, and each country had a different approach. This makes it extremely difficult for companies to navigate the situation.

What if it takes nine or twelve months instead of three or six months for the situation to normalize?

This is planned for in our scenarios. We are financed very long-term. We don't know how quickly sales will come back – and that's why we made our scenario planning as independent of sales as possible. We have tried twice now to make the best possible assumptions, but it always turned out differently. We just have to keep managing the company flexibly. I firmly believe that we will come out of the crisis stronger – because we are a startup. As a startup, we are used to the fact that not everything always runs smoothly. The ups and downs are part of our DNA. We are innovative and try new things.

It sounds to you like investors have limitless confidence in this company. Is it really like that?

Yes. The belief of our shareholders in Tourlane was only reinforced by Corona. We have proven ourselves in this crisis. Every entrepreneur knows ups and downs. But there has never been such a mega-crisis before and hopefully we will not experience one again in our entrepreneurial life. The investors got to know us again, in a crisis situation.

What about Tourlane's business model, is trust unbroken there?

Yes, we only see ourselves confirmed in our business model. The trend will be even more towards individual travel. You no longer want to sit on a plane with 200 people and then just spend the entire vacation in a hotel. And digitization is accelerating – also in our market, which is still very much dependent on traditional tour operators and travel agencies. That plays into our cards.

Niklas Wirminghaus spoke to Julian Weselek

The interview first appeared on Capital.de