Travel industry world over has been witnessing high volumes of growth. This has caught the attention of many venture capitalists. Travel start-ups have raised more than a billion U.S. dollars from Venture capital funding in the past five years.
Global travel and tourism is one of the most valuable industries. It is analytically valued to be worth $7 trillion. The online travel market, in particular, is expected to grow to $817 billion by 2020.
Online Travel start-ups have picked up pace
Travel and tourism apps and other travel or hospitality tech platforms have been trending a lot. Airbnb, a $38 billion company has become a very popular name across the globe. From luxury to economy, Airbnb offer exclusive rental options to its users.
TripActions and Klook also had successful venture rounds that valued both the businesses at more than $1 billion. Other smaller start-ups like Rocketrip, Freebirds and RedDoorz have also closed modest funding rounds.
The giants are on “Acquisition Mode”
The big fishes are in pursuit of emerging start-ups. SAP Concur, for example, acquired the formerly VC-backed travel-booking startup Hipmunk in 2016. Before that, it bought travel planning company TripIt for $120 million, among others.
Expedia has gobbled up a number of travel brands too, like travel photography community Trover; Airbnb-competitor HomeAway, which it paid a whopping $3.9 billion for in 2015; and most recently, both Pillow and ApartmentJet.
Experts believe this boom is not temporary
Analysts feel these acquisitions are still not up to the desired level. To keep the pace going, companies need to be engaging in larger M&A deals. Travel industry highly dependent on cash flows and prevailing market scenarios. It is the first sectors to be impacted by hostile economic conditions.
Travel startups should raise now while the market is hot. The conditions may not remain favourable for long. In order to tap the future growth, the sector needs to up the scale of business and involve high levels of technology in their ventures.
