Digital

Continuing Travel Trend for 2014: Substandard Travel Startups Abound

@rafat

Mar 25, 2014 7:30 am

Skift Take

We’re hoping this trend changes over the next few years, as more specialist investors come into the field, and looking beyond just funding travel booking startups.

— Rafat Ali

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Early in January we released our big report, “14 Global Trends That Will Define Travel in 2014,” outlining the major trends that will define travel this year.

Below is one of the trends we see as playing out over 2014 and beyond.

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There is an abundance of online and mobile travel startups, and if you count adjacent verticals like social media services and photo sharing startups, the number rises even more. It could only mean one thing: a very high failure rate in the sector. The struggles of these startups are many and the majority of these companies end up hitting obstacles on the road to growth and scale.

There is little money in anything targeting the airlines sector, travel inspiration is still difficult to monetize (Pinterest is already the “Pinterest of travel”) and hotel search is becoming a crowded field as founders realize that’s where the money lies. Few startups aim directly at the B2B end of travel, or even business traveler.

As for exits, there have been a few big ones, but most of the travel startups either shut down or get soft landings at companies that need smart staff, not new products. TripAdvisor has been an acquirer of choice for any failing consumer travel startup wanting a soft-landing.

Over the last few years a number of specialist venture funds have emerged, and are trying to bring domain expertise into the equation, especially for the B2B startups. But not all funds are created equal: some have had better luck investing, some have been there in name only, and some with no active investments as of yet.

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Check out the 2014 trends below in the presentation, or download them for deeper read. Either way, share them if you like them and think others can benefit from them.

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