State of Travel Startups Survey

Skift recently conducted a study on behalf of Amadeus for Startups on the State of Travel Startups which documents the challenges and opportunities facing the travel startup ecosystem.

We surveyed 177 startup leaders from around the world to better understand what is top of mind, from funding gaps, top challenges, technology innovations and new business models.

Bridging the Funding Gap

Amadeus x Skift

What is the most recent funding round your current travel startup has had?

64%

None or Self-funded

20%

Series A

Series B

Series C

0.5%

Series E or More

If you've received funding, how much did you raise?

Should startup founders worry about raising too much money?

of people said:

Nice problem to have! It's so rare for a travel company to raise "too much money" that it's not worth worrying about.

of people said:

It's a danger for startups that they might raise too much money and then they might become too expensive to be acquired by a larger company, reducing the chances of desirable exits and increasing the chance of failure.

of people said:

It's only a small problem for startups that they may raise so much money that they become too expensive to be acquired by a larger company or to have a successful IPO.

of people said:

It's not a real issue. Founders should merely raise as much money as they can and let the investors worry about how they manage their portfolios.

Business Models

Amadeus x Skift

Is your business model primarily B2B (business-to-business), B2C (focused on consumer or individual travelers), or something else?

28%

B2C

38%

B2B

33%

B2B2C

What types of experimentation do you most expect to see in business models in the next few years?

27%

Subscription-based models instead of fixed-price models.

21%

Personalized pricing based on customer demographic profile or behavior.

14%

Unbundling, with the “a la carte” fee model pioneered by budget airlines applied to other travel sectors, products, and services.

10%

Hybrids of cost-per-click and cost-per-action.

8%

Surge or dynamic pricing applied beyond the ride-hailing segment.

What is the most interesting space for young travel consumer marketplaces today?

23%

Tours, restaurants, and in-destination activities

20%

Trip-planning/Itinerary management

16%

Growing direct sales for companies

9%

Metasearch

Innovation and Emerging Tech

Amadeus x Skift

Are the travel industry’s legacy stakeholders (like airlines, hotels, etc.) more open to embracing innovation than established players in other major industries — such as retail, healthcare, banking, and so forth?

26%

23%

21%

19%

8.5%

26%

Travel suppliers and legacy companies are open to embracing innovation.

23%

Travel companies are about the same as other industries in their embrace of innovation.

21%

Travel companies are reluctant to embrace innovation, though travel is ahead of other industries sometimes.

19%

A resounding no. The travel industry is much more reluctant to embrace innovation than other industries, on average.

8.5%

A resounding yes. The travel industry is eagerly embracing innovation today.

Which technology will be most likely to change the travel industry in the future?

25%

Artificial intelligence

23%

Machine Learning/Predictive Analytics

14%

Blockchain

11%

Internet of Things & Voice-Based Search

How do you feel about the market opportunity for blockchain applications within the next few years?

How do you feel about the market opportunity for augmented reality in travel?

How do you feel about the market opportunity for machine learning in travel?

Success and Exit Strategies

Amadeus x Skift

How do you define success?

Most people said:

Achieving profitability with at least double-digit annual growth.

Having adequate growth to stay independent indefinitely without listing on the public stock markets.

Being acquired and maintaining your brand.

Changing how travel customers do business regardless of the financial outcome.

An “aquihire” where your company disappears as an entity, but you can continue to work on your solution inside a better capitalized company.