Investment in travel tech — Five startups shaking up the travel industry, October 2019
Travel and hospitality is booming. In Europe, despite Brexit looming ever closer, hotel investment reached a record high of €23 billion in 2018. In the US a decade of growth has seen hotel gross bookings grow from $116 billion to $185 billion, and airline revenues jump from $155 billion to $222 billion. Overall the sector added a record $8.8 trillion to the world’s combined GDP in 2018 — a massive 10.4% of the world’s total economic activity.
So what is driving this unprecedented growth? In a word — technology. From smartphones to online travel agencies, travel apps to the sharing economy, the last ten years has seen extraordinary technical developments in the industry.
While the good times can’t last forever, the hope is that continuing technological development will drive ongoing growth, and at the moment this seems to be the case. In the last five years travel startups have received over £1 billion in new investment. The online travel market alone, for example, is expected to grow to $817 billion by 2020.
The technologies behind this explosion are AI, augmented and virtual reality (AR and VR), voice recognition, chatbots, the internet of things, blockchain, machine learning and big data. Everywhere it seems VCs are looking to snap up smart, tech savvy travel startups using these new technologies to disrupt the market. Here are just a handful to keep your eye on.
HERA (Hotel Email Reservation Assistant) by Hotel Res Bot, helps hotels manage email booking requests received by Front Desk, hotel reservation department and chain Central Reservation Offices (CROs). Using machine learning, HERA is capable of reading and understanding emails to create automatic and semi-automatic responses to customers. Such seamless processes HERA checks Rates and Availability while supporting complex offer selection logic to ensure guests receive the best matching room and rate type, capable of handling multibooking requests.
This upselling system allows hotels to make money from rooms that would otherwise have gone empty. Guests receive an automated email asking them if they would like to bid on room upgrades. They can then choose the size of the bid and the hotel decides whether to accept. Together with the option of extra purchases the service promises fewer empty rooms, fewer free upgrades and extra revenue of up to $25,000 per month.
In a similar vein HotelFlex uses unsold rooms to sell early check-ins and late check-outs to existing guests. The company’s experience with selling tens of thousands of early check-ins and late check-outs enables them to take a big data approach to what rates to charge and how best to target customers, leading to greater revenue — outperforming email or front desk upsells by 300% according to the firm.
AR is now ready to disrupt walking tours with Sherpa, a free app that provides tours of major cities from t iLondon to New York, Paris and Tokyo. The difference from other virtual tour apps is that this one has an AR avatar guide who literally shows you around the city. The content is provided by local experts and tour guides and customers pay for individual tours. The company hopes to have 100 tours by the end of 2020. However the app is only currently available for iOS.
Triip is a Singapore-based startup using blockchain technology to offer a decentralised, incentive-driven system for booking holidays and stays. Customers earn TriipMiles, a travel-based cryptocurrency, by booking rooms, flights and tours and leaving reviews and recommendations on the app. With $100 million raised so far and over 100 million users, the company is looking to tackle the problem of sustainable travel by contributing one percent of each booking to a sustainable fund.
Sciant helps new technologies find their feet in the travel and hospitality market with the right connections and integrations to help scale in their preferred geographic locations. Sciant’s range of domain experts with specialism in data, machine learning, connectivity and integrations will enable concepts to evolve into MVPs and meet sector demand in feature and functionality.