London will remain capital for travel investment, but Brexit threatens recruitment

London will remain capital for travel investment, but Brexit threatens recruitment

The looming prospect of Brexit on the UK’s travel tech sector prompted mixed views at last week’s Open Destinations London Tech Week event.

Travolution partnered with the London-based technology developer for a third time on a special event during the capital’s digital festival.

This year the event was themed “East Meet West” with speakers asked to talk about working in a global travel technology sector increasingly influenced by innovations from southeast Asia.

However, the issue of Brexit featured heavily in a panel debate with recruitment of talent being one of the key concerns.

Moshe Rafiah, chief executive of Travelfusion, the low-cost carrier aggregator majority owned by China’s Ctrip said he was “not very optimistic about the way Brexit is playing out at the moment”.

He said the first impact he is seeing is on recruitment. “I believe everything starts with the people and London is just the most incredible city in the world, has been, for me, for 26 years.

“We have been able to attract a very diverse and cosmopolitan workforce. We have 62 people and I think we have maybe 40 nationalities.

“But we have seen a big drop in applicants, maybe due to people thinking twice about coming to London, so from that perspective we have big concerns about it.

“The other area, which can be bridged much easier, is about business continuity. We are definitely going to set up another entity somewhere else in Europe. Overall, not happy.”

Markus Ehrnrooth, co-founder of London-based start-up travel shopping service Knomi which is based in the London & Partners Traveltech Lab, had fewer concerns:

“For a company of our size we have to worry about other things than Brexit,” he said. “We are a very small company and start-ups luckily have a way of making do with the cards they are dealt.

“We try to look on the bright side. It’s good for some of our partners, they see more travellers coming here because things are cheaper.

“Mostly we are sad about Brexit. We are from a younger generation. I am not from the UK, many in our company aren’t, and we are worried about whether we can we stay.

“But it’s about talent and we make do with what we have and we look at the bright side. The world’s not going to end.

“It’s just another hurdle which maybe is a bit of an unnecessary one, but we will jump it and on to the next thing.”

Kristy Hart, co-founder of Hack Horizon which organised a travel hack on a BA flight between Hong Kong and London in May, said:

“The travel space generally attracts a pretty global type of audience in terms of participation but also enjoying the services.

“Travel technology is one of the spaces where the top 10 best-funded companies are not based out of the US, and that’s actually quite unusual.

“What that means is you have so many opportunities for other places like London, and the UK more generally, to step up and use a platform like the UK market to build a travel tech start-up.”

Hart said selecting London and Hong Kong for Hack Horizon was important because those were two places where visitor numbers are going to rise, whether because of Brexit or not.

“Travel isn’t just a Silicon Valley game, it’s a world game,” she said. “I don’t necessarily think Brexit is going to discourage travel tech start-ups from setting up shop here.

“Places like the Traveltech Lab are helping young start-ups to connect to the right people and for a young start-up Brexit is not necessarily the biggest problem on the mat.

“Brexit will in some ways shape the confidence of some of the big guys but from a start-up perspective there’s still so much opportunity here.”

Ian Wheeler, of investor Vitruvian Partners which has invested in Skyscanner, Jac Travel and OAG as well as Just Eat and TrustPilot, said: “Putting my investor hat on you have to look where capital is.

“Capital is in Silicon Valley, on the east coast of the US. But where’s one of the biggest sources of capital for start-ups and growth companies? It’s London. That capital isn’t going to move.

“London will maintain its importance as a centre for investment in start-ups and growth companies and it’s going to be, to a certain extent, self-perpetuating.

“London will retain is competiveness from a capital point of view which I think will attract young talent and start-ups.”

Wheeler said London has the advantage over the US and southeast Asia in terms of the quality of technology aligned with creative skills.

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