Technology solutions for the travel industry, known as Travel Tech, encompass a set of next-generation tools and platforms designed to transform travel-related processes. They aim to provide travelers and travel service providers the scalability needed in a highly dynamic landscape. These tools have helped to capitalize on pandemic-driven developments such as increased demand to minimize human interaction, a trend toward experience-rich wellness travel, and growth in demand for private car rentals.
The Travel Tech suite includes B2C solutions that enable the booking of various transportation modes, experiences, and alternative accommodation, and smart luggage offerings. It also includes B2B solutions that assist in planning, controlling, tracking, and reporting on business-related travel activities, revenue, and guest management. The need for these tools has been fueled by various technological advancements and evolving consumer behaviors, brought significantly forward by the Covid-19 pandemic. Advancements in smartphones and the internet allow travelers to plan, book, and manage their trips online. Furthermore, data analytics, AI, VR, and AR technologies offer personalized travel experiences and immersive pre-viewing experiences.
Travel tech startups operate across eight distinct segments and can be divided into B2B and B2C solutions. As of February 2023, the most common were startups offering B2C platforms for 1) alternative accommodation, 2) experiences (e.g. tours, events, and activities), and 3) online search/booking. The space is home to many growth stage startups, with the majority having established solutions for B2B revenue management and experience booking. Most of the startups are pure-play disruptors, with the exception of companies such as Hopper, Vacayou, and Mondee, which offer B2B and B2C solutions.
Incumbent presence was the most heavy in the B2B travel solutions segment and populated by non-travel related incumbents, including AMEX, SAP, and US Bancorp. Incumbent activity from travel-related incumbents was predominantly seen across the B2C segments and included powerhouses like Booking Holdings, Expedia, and Airbnb.
Incumbent activity in the space is concentrated around traditional travel companies (online travel and marketplace platforms), including Expedia Group, Booking Holdings, Trip.com, Airbnb, and TripAdvisor, which mainly focus on B2C solutions, such as the online booking of flights, hotels, and/or alternative accommodations. The presence of Big Tech firms in the space—which include Google, Microsoft, and Amazon—is limited, compared to that of traditional travel incumbents.
Non-travel-related incumbents include SaaS firms like SAP, SAS Institute, and PROS Holdings and financial services firms such as US Bancorp and American Express, which mainly operate in B2B subsegments. Incumbent activity remains sparse in the guest management solution and smart luggage provider subsegments, which are dominated by startups.
Incumbent strategy from travel-related firms has been heavily geared toward acquisitions and customer partnerships that enable the integration of travel portfolios (e.g., flights/accommodations, destinations, and tours). Notable players such as Booking Holdings and Expedia Group have made several acquisitions to establish a global presence and serve multiple segments, with only a few incumbents being pure-play firms (e.g., Samsonite and SAP). Non-travel-related incumbents have entered the space through acquisitions (e.g., Samsonite and SAS), supported by product partnerships (e.g., API integrations) with travel-related incumbents.