The travel technology industry is showing a dip in funding in recent years, according to media reports.
Phocuswire’s report, the State of Travel Funding 2023 showed that travel technology investment had dropped from $12 billion (R214 billion) in 2022 to $4,6 billion (R82,2 billion) in 2023.
Anna Schneider, Senior Research and Intelligence Analyst at Lufthansa Innovation Hub, told Phocuswright that macroeconomic uncertainty, geopolitical tensions and inflationary pressures were to blame for the drop.
The market is experiencing a significant correction after the COVID pandemic caused a “massive run up in the market” according to Gaurav Tuli, partner at F-Prime Capital investment company.
Both Schneider and Tuli agreed that challenges facing the industry would continue to drive new solutions, and a drop in investment did not indicate a decrease in innovation for the travel industry.
Among the top priorities, using AI to personalise and streamline operations was found to be a key priority, along with boosting efficiency through automation.
Alongside these overall trends, it was found that different travel sectors focused on different investment priorities. The hospitality industry and the ground transportation industry were found to be focused more on investments that could drive market expansion and increase operational efficiency.
Online travel agencies prioritised market expansion in investments and this was the only segment that saw an increase in investments in 2023. Aviation, on the other hand, was more focused on operational efficiency, including maintenance, repair and revenue management. Aviation was also found to focus more on sustainability investments than other sector.
