Travel demand is expected to match or exceed pre-pandemic level in 2024 in many categories and travel technology continues to explode as the industry is hungry for ways to optimize sales and improve operational efficiency. Travel technology startups continue to roll in even as some reports suggest a slowdown in capitalization as interest rates continue to remain high. $3.7 billion in venture capital flowed to travel startups in 2023 and that number is expected to creep higher in 2024 as companies race to bring their apps and software to an eager market,
Short Term Rental Technology Dominates VC
Short Term Rentals (STRs) and the technology behind the concept was a major funded category in 2023, pulling in $676 million in venture capital. A recent Skift survey found that there were almost 30 startups working in the STR category and is still considered a favorite in upcoming travel technology. Consistent upticks in demand for this type of accommodation is driving innovation in the marketplace. Demand for unique and luxury experiences through this category is also increasing, opening the doors for innovation that caters specifically to premium and luxury STRs. Property marketing and management software are key technologies being developed for the STR category.
Demand for Efficiency Drives Innovation in Hotel Technology
Hotel technology companies saw venture capital funding in 2023 at $274 million with approximately 30 startups coming to market. As hotel and resort brands demand more efficient operations, they are turning to technology to manage many aspects of the operations. AI models can create dynamic pricing and marketing for unsold rooms and amenities. Software to manage hotel, kitchen and restaurant operations can easily control costs as well as track productivity and labor costs. Hotels & resorts are also looking for enhanced guest experiences through technology by using advanced communication and interface systems. Accommodation bookings are forecasted to exceed pre-pandemic levels in 2024.Hotel & resort operators are demanding technologies that will improve operational efficiency and maximize revenue as volume ramps up.
A Boom in Business Travel Means a Boom for Travel Technology
Corporate and group travel is set to accelerate in 2024 and management of complex itineraries and spending puts a spotlight on back end technology for the business travel category. In the Skift survey, 9 startups brought in $445 million in seed funding in 2023 as demand for software and apps to manage corporate travel surges along bookings. Payment platforms that can control and track spending are trending strongly as well as all in one apps that organize travel itineraries and meetings in one easy to use interface. Technology that can streamline the corporate and group travel process is the next hot trend for 2024 as companies will look to save time and money but understand the necessity for business travel and corporate meetings.
Travel Startups to Watch for in 2024
There are many interesting trends for travel in 2024 with most centering around the actual experience or adventure. These travel startups are looking to innovate in in their individual niche categories:
- Social media mavens that are dreaming of that perfect Instagram holiday should check out Luxury Travel Hackers. By using social media influencers travel content, they can put together the most Instagram worthy experience possible.
- Tripsider is a new startup that promises to be a matchmaker for wanderlust travelers. By answering profile questions, Tripsider will ‘match’ travel to the user’s wants, desires and budget.
- Duffel is a UK based startup that works closely with airlines to provide the best and real time prices for air travel.
- Whimstay is a platform that provides marketing for unsold short term rental units. Last minute travelers can find great deals as this platform connects hosts and property owners directly to potential clients. Using this platform could save travelers 60% on standard STR pricing.
With travel demand returning to normal, consumers will be searching for value and ways to elevate the experience and to maximize travel dollars spent.
Travel Startups Continue to Innovate as Demand Returns
The travel industry has been on a roll the last few years and 2024 is expected to be a milestone for the market as traffic and bookings reach and perhaps exceed levels in 2019, just before the COVID-19 Pandemic. Travel operators and providers also understand that resources are stretched and costs are increasing and are constantly looking for opportunities to sell more and control costs. Technology has always been at the forefront of the travel business and software startups are creating innovations that will help drive the bottom line and boost profitability in a battered industry. Advances in Artificial Intelligence and Data Handling are driving hotel & resort technology and creating new ways to operate more efficiently while increasing revenue.
Sources:
(https://startupsavant.com/startups-to-watch/travel)