The travel industry is taking the most direct hit from the coronavirus pandemic and web-based services appear to be having an equally hard time.
I received an email last night from Roomer Travel, a New York-based internet company that works with travel operators to offer cancellation insurance on holidays — I’d paid a premium in case I had to cancel a couple of nights’ non-refundable hotel rooms in April, booked well before the coronavirus became a concern.
Roomer’s email announced it was welching on the deal. “Due to the massive impact of Covid-19 on the global travel industry we are facing extremely high volumes of requests and we will need to refund your payment of the Cancellation Option fee,” it said. So I’m now uninsured and will have to wait up to 120 days for any refund of the premium.
This alarmed me, particularly as Roomer partnered with the huge German reinsurance company Munich Re only last year on “a solution that protects Roomer against large unexpected payouts”, supposedly ensuring this kind of thing would never happen to it.
Airbnb must be wondering how this ever happened right now. Its bookings have collapsed by 40 per cent in big European cities and China, according to independent data, putting its plans for an initial public offering this year in doubt.
One of its investors told our reporters that conditions had made it “impossible” to move forward with the IPO until the coronavirus was contained.
However, another suggested Airbnb was relaxed about a low valuation. Once the travel sector recovered, the only way for Airbnb stock would be up. That sounds like the kind of investor to whom you could never sell IPO cancellation insurance.
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The Internet of (Five) Things
1. Slack slides on lack of coronavirus boost
Slack shares fell nearly 20 per cent on Friday after the business messaging app said it was not seeing the benefits yet of people working from home and using its service due to the coronavirus. Richard Waters’ Inside Business column notes it is 20 years this week since the Nasdaq reached its dotcom peak and start-ups are now being urged by their VC backers to rein in spending to avoid another bust.
2. SoftBank’s big buyback
SoftBank will buy back ¥500bn ($4.8bn) of its own shares following demands from activist fund Elliott Management to close a widening gap between the value of the technology conglomerate and its investments. Friday’s announcement failed to lift investor sentiment as shares fell as much as 9.6 per cent, in line with a broader Japan market coronavirus sell-off.
3. Crypto Covid-19 collapse
Crypto’s supporters claim its tokens should be safe havens in a crisis, yet Bitcoin plunged to a 10-month low of around $3,850 overnight on some exchanges — a more than 50 per cent drop in the space of 48 hours — before edging up to around $5,500. That still marks an almost 50 per cent fall from levels close to $10,500 a month ago, notes Alphaville.
4. Apple Music strikes multiyear deals
Apple has struck fresh deals for songs from the world’s largest record labels, through multiyear contracts with Universal Music, Sony Music and Warner Music, reports Anna Nicolaou. The deals apparently don’t include an agreement to bundle Apple Music with its TV service, indicating that a widely anticipated super-bundle of Apple’s media content may still be months away. Meanwhile, Apple has announced its annual developer conference in June will be an online-only event due to Covid-19.
5. IBM to build quantum computer in Germany
IBM is to build Europe’s first quantum computer in Germany, allowing researchers to harness the technology without falling foul of the EU’s stance on data sovereignty. The 9ft-tall Q System One computer will be operational at a site near Stuttgart from early next year. Elsewhere, the Pentagon is to reconsider “certain aspects” of its decision to award a $10bn cloud computing contract to Microsoft instead of Amazon. Amazon has claimed it lost the contract because of “unmistakable bias”.
Tech tools — MetaFly ornithopter
MetaFly, a radio-controlled giant insect from a start-up in Marseille, is the first ornithopter covered by Jonathan Margolis. “With its tissue paper-thin carbon-fibre and polymer wings flapping at near insect speed, it’s akin to a vision from hell, sounds horrifying — and I love it for all that,” he says. Read more
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