Venture Capital

Travel venture capital is no longer in freefall — but it is far from fully recovered. Now defined by discipline, funding is concentrated in fewer, larger bets on proven companies.

Venture Capital investment in travel hit a decade low of $2.9B in 2023, but early 2024 suggests a rebound, with larger deals, growing Asian and Middle Eastern investments, and a focus on tours & experiences, AI and hospitality employment.

A resurgence of early-stage startups launched in 2021 points to a new wave of innovation and energy coming into the travel sector.

The pandemic derailed record years of venture capital in travel, resetting the industry to 2014 levels of investment. But we remain optimistic about the future of the travel industry and its ability to attract top talent, innovate technology, and incubate globally relevant startups.

We are headed into a winter for travel startups. But travel won't be gone forever. And history teaches us that startups are often the first to pinpoint our industry’s new direction as we exit a crisis.

Analyzing startups helps us understand what the future of travel holds. The latest generation of startups promises innovation across many facets of travel: hospitality, tours, airlines, business travel, and more.

The travel industry, no stranger to disruption, is experiencing a new wave of venture-backed startups. These businesses are generally larger than ever before and focused on bringing new customers and products into the digital travel fold. We expect this momentum to continue and for it have an impact on executives, founders, and investors throughout the sector.

At the end of the day, it’s all about hospitality, but the vacation rental industry faces unique challenges in delivering on that promise. Technology will be key to providing an elevated guest experience across this fragmented market.

A record amount of venture capital was invested in travel startups in 2017 driven by unicorns, like Airbnb, emerging technologies, expansion outside of core geographies, and traction in new verticals. The industry is no stranger to disruption, but we may be seeing some of the greatest changes of the last two decades, and we expect this momentum to continue into 2018.

Airbnb popularized a new type of rental product - i.e. the primary-residence urban rental, but now professionally managed properties are coming online with fury. Looking forward ten years, the landscape will likely look quite different. Consolidation is in the air; vacation rentals have gone mainstream with the consumer but inventory remains fragmented. Property managers, marketplaces, SaaS platforms and a host of other add-on services are evolving their strategies to capture greater scale and efficiencies.

The very nature of investment in the travel startup space remains complicated. A lot of hype but also plenty of opportunity and big payouts for those who can bring together the right tech, the right user experience, for the right market segments. This report delves into what has worked and what investors should be paying attention to as we move into 2017.

Messaging technology is expanding at a rapid pace across the online commerce ecosystem, across categories. This report addresses the marketing operations side of the messaging technology equation among travel companies. A companion Skift report will focus on bookings and messaging tech.