Cambon Partners’ Morgann Lesne on what makes French travel tech tick or not tick these days
HAVING lunch with investment banker Morgann Lesne in Paris late December, our conversation turned to the acquisition of Etraveli Group by Booking Holdings and we wondered if France has the capability to produce travel unicorns of a similar magnitude as Sweden seems to have done.
Lesne, an associate at French boutique investment bank Cambon Partners, has been involved in travel and hospitality for the past several years, frequently attending Phocuswright and later WiT conferences, when the bank’s interests turned to Asia.
It attempted a brief foray into China
in 2018 with the appointment of a local associate but has since ceased activity
in the market, possibly learning some hard lessons along the way.
Lesne remains passionate about travel,
despite what the pandemic has done to the industry and is actively working on a
few deals, one of which is in Asia, and in particular, he is most passionate
about the critical role of DMCs (Destination Management Companies) in the
travel value chain, calling them “the human face of each trip”.
When we met, Lesne was preparing to
take his family to Mauritius for a holiday, and the Omicron variant had just
reared its ugly head and was threatening to upend the French population’s winter
“I don’t like what Covid is doing the
world,” said Lesne solemnly, “not just in business but as a society, creating
divisions, inequality, authoritianism.”
He did travel to Mauritius despite all
his friends telling him not to go. “I am glad I did. What a fantastic trip,” he
Here’s a capture of our interview.
Q: Can France produce the kind of travel unicorn that Sweden recently did with Etraveli Group being acquired by Booking Holdings for 1.6 billion Euros?
Historically France has produced great and inspiring companies (like Club Med, Nouvelles Frontières, Accor, Air France, Exo Travel) that took an active role in shaping what travel is today.
Since the digital era started, one
could start to think that France has lost a bit of its capacity to provide
world-class travel companies – this isn’t exactly true but it’s not false
Blablacar revolutionised the way people travel by building at scale a ground transportation network which is incredibly efficient. Voyage Privé has built one of the most successful and profitable e-travel companies in Europe without raising a single euro. But many companies did not manage to go above the 100 million Euros Enterprise Value bar.
Q: Why has it been so hard for the
It takes time for French founders to build world-class companies, maybe more so than other countries as we don’t excel in taking our companies global. France has a relatively small domestic market – not big enough to reach scale. Going abroad isn’t simple and requires good international skills and proper funding which we are only starting to see now. The next version of French e-travel companies could therefore be much better.
Q: What kind of companies typically
succeed at going global then?
I believe it will be companies that can leverage their French touch like Le Collectionist, one of the only luxury e-travel companies, which offers exceptional properties for rent to Ultra High Net Worth Individuals and Campings.com, the largest European OTA for camping and glamping, a massive long-term trend in Europe.
Evaneos is changing the way we build great experiences by connecting travellers to Local experts (DMC) while Dayuse is acting to put hotels at the centre of urban reinvention by enabling them to monetise their assets with local clientele.
In corporate travel, we could also see a new generation of companies emerging like CDS Groupe, kind of a French version of Tripactions which allows corporations to better manage their hotel spending and payments globally and Swile which recently raised US$200m from Softbank at a US$1 billion valuation – they could be the new face of French startups.
Q: What has the past two years been like for travel investments in France? People keep saying, there’s lots of capital around. Is there? What kind of investments is it chasing?
Very few companies have managed to raise funds since March 2020. In Europe, there was a general suspicion towards travel with a few exceptions like domestic/near-to-home travel ie camping/glamping. Most investors don’t like cyclical businesses. I think it was (and still is) a great time to invest in travel.
Q: Specific to your bank, any interesting deals you’ve worked on or are working on that you can share?
Shetravels (like G-adventures for women who want to travel with privacy and security), Salaun Holidays (French Tauck, one of the largest tour operators in France, specialised in senior travellers and their families), Exo Travel, one of the most reputable DMCs in Asia, and Misterfly (B2B2C OTA founded by the former founders of eDreams-Odigeo).
Q: Name three interesting French travel startups you’ve seen lately.
• Fairmoove.com : High-end OTA only distributing sustainable tourism products • Youza (Getaway-like, glamping operator) • Staycation.com : fast-growing business in France offering near-to-home breaks to locals
Q: Travel has taken a severe battering the last two years and now there’s the new variant which threatens to send the fragile recovery into a tailspin. What’s your outlook for travel in 2022, wearing your banker’s hat?
Travel will come back stronger than it was in 2019 with a few (sensible) exceptions (like air tickets, long haul mass tourism, group tours). It could be as early as 2022 for a few business who have anticipated the new trends. Most companies will have to wait a bit longer. But in the long run, travel will remain the world’s biggest industry.
Q: You’ve always been interested in the
DMC part of travel – something that’s not really sexy in travel tech. Why the
interest? And why do you think this traditional sector is so critical in the
travel value chain?
DMC have always played a key role in delivering great experiences locally. They are at the heart of each longhaul trip. They know the destinations better than anyone else. They have long term relationships with hoteliers, transfers companies, local activities. They can tell you what to do, when to go, book a great table, organise unique excursions. For me they have the most important role in the value chain. In a world where people are more and more hesitant to hire people, they dare to have teams and experts on the field. They are the human touch of each trip.
Q: How can DMCs innovate at a time when
consumers are booking directly and doing their own self-service tours, and
being enabled by tools such as Google Maps, travel reviews, influencers, etc.
Who needs a DMC today or tomorrow?
When profusion of information becomes
chaos, we all need a reliable source of trustful information delivered by
people living and breathing with the destination. This is the link I will make
sure to never skip. But I expect DMCs to offer me an easy and digitalised access
to their products. Very few DMCs have invested enough in tech which will lead
to problems. I expect a big movement of concentration and consolidation in this
space, driven by private equity firms who know how to improve process efficiencies.
Q: You were at Phocuswright 2021 in
Fort Lauderdale. What were your key takeaways?
Fintech is everywhere. Changing the
carbon footprint of tourism is an emergency. Corporate Travel is far from being