In this INMA Newsroom Initiative newsletter, we take a deep dive with the founder of business-to-business travel site Skift on how it survived the near-death experience of the global pandemic that all but shut down the very industry it serves.

Rafat Ali, its chief executive, is a perceptive media industry watcher who also founded one of the early Internet sites and newsletters devoted to media analysis. Now he’s out to transform the biggest industry in the world and make his B2B site the most relevant to the entire travel business.

He generously shares his lesson for how to act decisively and retain focus on the prize when you have to deal with a global crisis that becomes existential for your own business. (Rafat is also speaking in the Newsroom Initiative Workshop at the INMA World Congress of News Media in May.)

Apart from that interview, I offer a couple of curated reads on major publishers going fishing — at significant cost — in TikTok and my usual Recommended Follow.

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Survive a crisis and thrive: the Skift story and what we can all learn from it

Skift is an ambitious, New York-based, business-to-business travel news service. The company faced an existential crisis as the COVID-19 pandemic hit in early 2020, effectively shutting down the largest industry in the world — travel — and forcing it to shrink and rethink its future and whether it even had one.

Founder Rafat Ali says the company has emerged stronger after two years of dramatic staff cuts, closing some business lines, launching others, and rapidly rebuilding its in-person events. Skift may offer any media business lessons on how to deal with sharp shocks and long-term change.

“It was like hand-to-hand combat as it was in year one or two Skift,” Ali told me, as he explained how Skift dealt with the importance of reporting an immense story while also struggling to stay alive. “Obviously this was the story of our lifetime, and we were in the middle of this Category Seven storm trying to rescue the business.”

I have known Rafat for many years and admired what he did with the media news newsletter PaidContent.org, which he built doggedly into a valuable source of industry news before selling it to the Guardian Media Group in 2018. The site suffocated and is no more (the URL diverts to the GigaOm tech news site founded by Om Malik), but Ali had his sights on virgin media territory.

If Skift didn’t exist, you’d probably have to invent it. And it is extraordinary that despite the scale of the travel industry globally, there was no real equivalent. Yes, there were aviation newsletters and financial news agencies covering listed airlines and hotel companies, but there was no real online service covering the travel industry holistically. 

Into that space came Skift.

“What we are doing in travel is ‘connect the dots,’ and connecting the dots is not a trivial skill. It's a skill that we have developed,” Ali said. “I’m out to make others obsolete if not kill them and obsolete by irrelevance. We are the most relevant. My ambition with Skift is to be the most influential company in global travel — not the most influential media company in travel because we are that today, but to be the most influential company in travel.”

That ambition came to a screeching halt at the start of 2020 when the bad news that had been spreading from Wuhan about a mystery virus became a global pandemic about which we knew little but which had an immediate and catastrophic impact on the travel industry.

Ali and his co-founder Jason Clampet moved fast, firing more than a third of staff (many of whom had only been hired relatively recently and were part of an ambitious growth programme) and closing physical offices everywhere — offices they’ve decided they’ll never return to.

“If it wasn’t exhausting, it was exhilarating,” Ali said. “The energy that we were generating among all of us but particularly Jason and I as the co-founders. We had to be decisive. Decisions have to be made and we move on.”

It really was touch and go, and Ali acknowledges Skift might not have made it.

“I had to lay off one-third of the team, take it down to 38. We sacrificed Asia, Southeast Asia, four people in Singapore, we shut our offices down,” Ali said. “We really were three weeks away from running out of money at some point in April 2020.”

There are probably few genuine secrets in the Skift survival story, but some of the lessons are clear yet hard for newsroom and news business leaders to embrace in a crisis: act fast, decisively, and transparently, to defend cash flow, and morale. Maybe the most important is focusing on the needs of customers and understanding them so intimately you feel their pain and how you can help.

“We actually did OK in retaining customers in 2020 — we were down in revenue by 40% – and then 2021 was our most profitable year ever because we reset the business. But the physical events hadn’t come back and that [also] meant the costs of physical events weren’t there. Revenue wasn’t the highest but we were the most profitable. 

“And, 2022, we’re just closing the books on it, and we’ve crossed the pre-COVID numbers in terms of revenues. But the costs have come back, meaning physical events and inflation. So our profitability is lower. We’re solidly profitable, it’s just that we’re not wildly profitable.”

Ali readily admits Skift was helped by government support in its American base to give companies hit by the pandemic some financial breathing space.

“The PPP loan in the U.S., which was essentially free money, saved us, in addition to obviously our own financial control to cut down everything we could, even the 40 people that were left. I didn’t take salary in 2020, for instance. Everybody gave some sacrifice depending on what level they worked in so that really saved us.”

Here’s how Skift emerged and is thriving: 

• It’s back to nearly 70 staff, all working remotely, and many hired in less expensive locations than its original New York base. It has about a dozen people in London. 

• Skift shut a couple of newsletters in areas it thought it understood but decided it just didn’t know about: food and beverage, and wellness, for example.

• The company doubled down on virtual events to help its clients manage and learn from each other, and now is investing again in its signature live events. Ali says turnover is about US$15 million.

Virtual events emerged as high-margin services that clients craved, which while they didn’t generate the revenue of live in-person events, helped rebuild the events business.

Skift also had major technology firms as sponsors and advertisers, and they kept spending through the pandemic, unlike the travel industry itself. Tech advertisers, Ali says, maybe like publishers needed to, told the travel industry: “We are here for you when you’re ready.”

Skift is now close to the model Ali originally envisaged of one-third of revenue coming from subscriptions, one-third from branded advertising, and one-third from events.

“We are there in terms of that three-legged stool of revenue. We are still a little less in subscriptions, like we’re between 25% and 30% from subscriptions, so we are almost there,” he said. “I would like that portion to keep on growing in terms of percentage for all the reasons you can imagine: recurring revenue is more stable and the most profitable part of the business. The cash flow comes from in-person events and branded content, but the profitability comes from these recurring things.”

What does Ali, a critic of inertia and complacency in the media industry, think the rest of the media business can learn from Skift?

The importance of ownership is critical: “If the owners are not 100% fully invested in things … this is the story of local media. If there are no local owners, why would local media thrive? Anybody who’s trying to create a local media network across the country or countries or geographies will necessarily fail because they’re just not connected.”

Skift, he said, is already the most-listened-to media in travel: “I would humbly say if you ask the CEOs in travel, the majority will say that for them Skift is the one thing that they look at to understand. They are looking for that holistic view. They are looking for what they don’t know.”

Rafat Ali will be part of a panel of industry experts in the Newsroom Initiative Workshop ahead of the INMA World Congress in New York in May. Sign up to hear him and learn more. 

A couple of must-read media stories with a little added perspective

• Why Tiktok is one of the “main priorities” at BBC News for 2023 is a UK PressGazette story on why the public broadcaster is investing in reaching younger audiences on TikTok. The New York Times is there and so is CNN. Director of Digital and Channels at BBC News Naja Nielson sees it as a win-win: ​​“We choose the platforms that we think will help us the most in informing everyone, delivering public value, making sure that there is trustworthy, transparent, accurate, impartial information out there.”
• Making a difference, building trust, and remaining relevant at 40 is an interview with Channel 4 Chief Executive Alex Mahon, who has just survived a government plan to privatise the publicly owned broadcaster. She too aims to put the UK’s Channel 4 on other platforms to reach the young, saying: “You’ve got to fish where the fish are. You can’t pretend you will drag young people to the ways that we’ve historically done business.”

My take: What’s old is new again as media companies repeat what they did with Facebook and Snapchat and try to exploit the vast audience on TikTok in the belief it will help their existing brands and sites — or at least validate public investment in the reach of quality news. I am not entirely convinced, but they have to go and try it, or listen to the example of start-ups specialising in this like The News Movement, whose founders I interviewed last year.

Recommended follow

Jason Kint @jason_kint is the chief executive officer of the campaigning media group Digital Content Next and one of the best-informed voices on regulation and debates about regulation affecting Facebook and Google and other platforms from a media industry perspective.

Talk back

Tell me what you want to read and what you like or don’t like in this newsletter, please. E-mail: peter.bale@inma.org . There’s also an INMA Newsroom Initiative Slack channel.

[Dawn, please let me know first what happens when you click that link please and whether it invites you to sign up.]

About this newsletter

Today’s newsletter is written by Peter Bale, based in New Zealand and the U.K. and lead for the INMA Newsletter Initiative. Peter will share research, case studies, and thought leadership on the topic of global newsrooms.

This newsletter is a public face of the Newsroom Initiative by INMA, outlined here. E-mail Peter at peter.bale@inma.org or newsroom@inma.org with thoughts, suggestions, and questions.

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