As travel has increased, so has funding for travel startups.
Travel startups raised $29 billion from 2016 through the second quarter of this year, nearly doubling the total amount raised in the previous decade, according to Phocuswright. Such startups raised $33 billion in capital from 2005-15 — the first decade that Connecticut-based travel and tourism research firm tracked funding.
Those statistics offer a peek at a Phocuswright report, “The State of Travel Startups 2017,” to be released next month.
Part of the reason for the funding increase is the trove of travel-focused investors, incubators, accelerators and startup programs that have launched in the past several years to link startups with capital, resources and mentors, wrote Phocuswright analyst Michael Coletta in a company newsletter.
Another reason might be the increased demand for travel as more baby boomers retire and millennials rank travel high.
Travel grew in 2016 and is expected to continue growing at a moderate pace in the near term, according to the U.S. Travel Association. More travel will be within the United States, not internationally.
While Coletta noted that big travel companies continue to get bigger, making it difficult for startups to compete, entrepreneurs in the tourism industry are focusing on new technologies and innovations. For example, millennial business travelers (age 18-34) book more than half of their hotel stays and nearly half of their airline reservations on smartphones, according to Phocuswright research.
Phocuswright will host a startup contest — Battleground: The Americas — on Sept. 12 at Plug and Play Tech Center in Sunnyvale, Calif. Sixteen startups get six minutes each to show their innovations to judges and a live audience. Two companies will progress to pitch their ideas to some 1,800 industry influencers at the Phocuswright Conference on Nov. 7-9 in Fort Lauderdale, Fla.