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Amid coronavirus carnage, one German travel tech startup goes for growth
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Limehome co-founders Lars Staebe (left) and Josef Vollmayr (right) pose for a photo in the company's headquarters in Munich, Germany in this handout picture taken September 22, 2020. (Handout via REUTERS/Limehome GmbH)
M
any of Europe's travel tech companies have suffered setbacks as the coronavirus pandemic has forced governments to restrict people's movements, but amid the carnage one German startup is pushing ahead with its growth plans.
Limehome, now expanding into Spain from its German and Austrian home markets, is pioneering a "contactless" alternative to traditional hotels that features curated, designer apartments and an AirBnB-style platform to handle bookings.
As governments imposed lockdowns in the spring, Limehome did suffer a temporary hit to bookings. But from May through to September, it operated at 85% of capacity at its 45 properties. Another 35 are under development.
"During the first lockdown, we were really lucky," co-founder Josef Vollmayr told Reuters, adding that business travelers had switched to Limehome as hotels closed: "We became more relevant."
AirBnB is expected next week to publish its registration to float in New York, riding a pandemic surge in bookings from vacationers practicing social distancing.
Limehome, at two years old an early-stage venture, recently topped up a Series A funding round to 31 million euros ($36 million) led by HV Capital. It will plough part into launching in the Spanish cities of Granada, Seville and Barcelona.
More mature travel techs, like tours and trips specialist Getyourguide, have meanwhile cut staff and turned to investors for fresh funding in the form of convertible notes - a down payment on a future equity funding round that would be tough to complete in the current climate.
Munich-based Limehome differs from AirBnB in that it works with owners to design and furnish apartments to its own standards - often converting vacant downtown office space into boutique 'apart-hotels'.
On the digital side, it manages booking, checking, cleaning, service and billing. It relies heavily on reservations via online travel agents like Booking.com or Expedia, but the share via its own platform has risen to 30%.
With governments again restricting tourism and ordering hotels to shut to contain a second COVID-19 wave, Limehome still expects business travelers to keep its flats busy.
An airline-style yield management system, which can lower prices at the last minute to attract bookings, helps keep occupancy rates high and supports positive margins even at low prices.
"We are open. Market prices are low. But we are the leanest product out there," Vollmayr said.
