The travel industry has transitioned to digital business models at a rate that few other industries can match, with 62% of all travel bookings in the UK made on the Internet in 2016.
The travel industry has transitioned to digital business models at a rate that few other industries can match.
Inevitably, as the travel sector undergoes this profound technological disruption, led by newcomers like Airbnb and Klook at the forefront, a wave of investment is driving a flurry of dealmaking and M&A activity.
How have global travel operators responded to this? In the metasearch space: through consolidation. Kayak, Trivago, Qunar, Skyscanner and Momondo have all been acquired over the past six years by established travel agents Booking Holdings, Expedia and C-Trip. “Greater scale, more listings, more bookings, more revenue” is the thinking emerging here.
The global travel industry is projected to grow at an annual rate of 10% by 2020.
Meanwhile, earlier-stage travel tech startups are becoming increasingly focused on curation and customisation. Arma advised Evaneos, a Paris-based online travel market for complex travel journeys, which cuts out the need for agents and tour operators, on its recent $80 million growth financing round. Venture capital and private equity will continue to direct investment into these travel tech newcomers in the coming years.
Even luxury-based travel, sitting at the premium end of the market, is undergoing change. Like elsewhere, companies like GetYourGuide, Evaneos, TourRadar and Klook are looking to digitise in a way that was unforeseen only few years ago. As a result, global operators are utilising M&A to match millennial appetite for new ways of vacationing and consequently gaining in market share.
The story doesn’t end there. The global travel industry is projected to grow at an annual rate of 10% by 2020. Tech-enabled platforms, with their ability to provide highly tailored holidays and leave older players behind, are on track to continue disrupting the travel industry.