How Rafat Ali’s Startup Skift is Weathering the Pandemic
As the media industry contracts, with advertising budgets and in-person events drying up, Skift is betting on its innovative founder.
When the coronavirus struck in 2020, tourism came to a screeching halt. Flights around the world were grounded, hotels temporarily shuttered, and thousands of hard-working travel and hospitality employees found themselves either furloughed or laid off. People were suddenly far less invested in booking their next business trip or vacationing in some far-flung locale, and more concerned about staying home and social distancing.
The once-bustling global tourism industry, as the world once understood it, had irrevocably changed, hemorrhaging as much as $1.2 trillion in 2020 — and its effects were widespread. Travel industry news and information outlets were hit particularly hard, as companies scaled back their travel ad budgets.
Skift, a travel publication geared towards industry professionals, was among the collateral damage. Founded and funded initially by seasoned media operator Rafat Ali in 2012, the business-to-business (B2B) media site — a prolific purveyor of industry news and reports that also hosts podcasts and events — had become an unlikely success story, buoyed by major advertisers like Accenture, Oracle, and Accor, and the site’s insistence in 2013 on charging a wide swath of clients like Marriott, Hilton, Expedia, Delta, and United subscription fees for its research reports at a time when others were giving digital content away for free.
Skift was on track to hit $18 million in revenues in 2020, and had tailwinds to continue expanding its staff and ancillary businesses. But with the pandemic scuttling the travel industry, those tailwinds sputtered, and Skift saw annual revenues dive 35% for the year. For much of 2020, Skift received 50% of its revenues from advertising and another 25% from virtual events, according to Ali, with the remaining 25% of revenues derived from subscriptions to Skift Research, which supplies members with access to reports on key trends, market estimates, forecasts, and deep-dives of travel sectors and companies.
“2020 was very, very hard, but we survived,” acknowledged Ali. “Now the world has changed a bit, and we have [fewer] resources at our disposal.”