The Technology of Travel Means Big Futures to Investors

By Steve Anderson March 11, 2014

With the economy still a bit on the fragile side right now, it could be forgiven for thinking that travel would be one of the biggest casualties in the overall spending of consumers. But with travel sites like Expedia and Kayak still doing quite well, investors have been funneling big dollars into other travel booking options, and producing something of a renaissance in travel options the world over.

Looking at a map of recent travel startups from Tableau Software, which also provided some numbers in terms of how much these startups raised, shows that this market is very much alive and well. For instance, the United States saw fully 119 different companies step into the travel space for the period measuring 2009 through 2014, and raise a combined total of just under $859 million. But this wasn't unique to the United States, either; Great Britain saw 25 companies in that time, raising just short of $139 million. China saw 17 companies emerge in that space but raising just south of $326 million. While these were the big spots in the field, a host of countries—from Russia and Australia to Kenya and Argentina—saw travel startups show up as well.

Indeed, travel technology in general is really starting to take off, with a particular focus on being both convenient and readily accessed by the potential traveler. The ability to set up every part of a trip—from travel to lodging—right from a mobile device is particularly prized, and many of these startups are adjusting offerings accordingly. Beyond that, however, another key point is showing up in region-specific offerings. For instance, there are yacht chartering services like Sailogy, charter fishing platforms like Fishfishme, and even a private plane ride-sharing service known as FlyteNow. In China and Brazil, firms like Tuniu and Hotel Urbano pull quite a bit of business from tour packages, a development less commonly found in places like North America.

What's driving this boost in travel? Reports from Accel's Brian O'Malley point to the rise of emerging markets, which often turn to travel and tourism dollars as a source of revenue. With fewer physical barriers, more investment capital moves into these ventures and drives the numbers that we're seeing today. There is also room, as noted previously, for regional differences to kick in, meaning there can be competition in one area that doesn't compete with a completely different area, and several sub-markets looking to swing in.

There's also a lot of room for future travel functions to gain ground in the coming years. Accel Partners, for example, wants in on vacation rentals and software-as-a-service (SaaS) for travel providers. Recently we also saw how the experience-as-a-service (XaaS) field could also have some impact for travel and retail operations, and there's also room to shore up the travel market within the market itself, as companies like Atlas look to ways to improve marketing to and relationships with customers, as well as the ability to boost management efficiency, something that often was only looked at when a place started getting a lot of bad reviews on travel websites.

In a market where there are plenty of opportunities, so too comes a lot of extra investment. We're seeing that happen right now, and in turn, we're getting plenty of new opportunities not only to refine old services but also potential ways to make new options. That explains why the market's looking as good as it is to investors, and will likely fuel some further expansion therein in the short term.

Edited by Cassandra Tucker

Contributing TechZone360 Writer

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