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6 Robotics Industry Predictions for 2019

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travel-industry

2017 Sets a New Record for Travel Tech Exits

Travel Tech

The number of travel tech exits backed by venture capital grew from 11 in 2013 to 20 in the first three quarters of 2017, according to a report by CB Insights. It is fair to say that further large-scale deals will be concluded before the end of 2017, following a total of 19 travel tech exits during the last year. The vast majority of deals are merger and acquisition (M&A) deals. Only one major IPO a year is reported during three of the past five years.

M&A Deals Exceed IPOs in Travel Tech

Expedia-backed Despegar is the only company which went public through an IPO this year. Their listing on the stock exchange values the online travel booking service at $1.8 billion. Only three VC-backed travel tech startups are valued over $1 billion during the past five years, Despegar being the most recent one. Travelport’s IPO in 2014 was worth $1.9 billion and Ctrip acquired Skyscanner for some $1.7 billion in 2016. Since 2013, the travel tech sector is witnessing mostly deals in the range below $100 million.

Experts believe the market will see further acquisitions due to dynamic innovations all over the industry with Airbnb, TripAdvisor, and The Priceline Group being the most active buyers in the past five years. TripAdvisor tops the list with five purchases while Airbnb and The Priceline Group have both completed three acquisition deals.

Travel Tech Startups Are Active Buyers

Travel tech startups are active acquirers themselves as opposed to other industry verticals. Almost half of the M&A deals in the past year involve a travel startup as a purchasing company. Startups such as vacation property rental service RedAwning and activity-listing platform Peek Travel are among those which completed M&A deals during the period. Travel tech unicorn Airbnb is another example of a travel startup expanding its market presence. They have purchased Canadian villa rental company Luxury Retreats for reported $200 million, which helps Airbnb in setting foot on the luxury space market.

Expedia is also an active buyer on the market for travel technology by investing markedly in travel tech startups. They are now a majority stakeholder in SilverRail after paying $148 million for a controlling stake. Expedia also purchased crowd-sourced travel recommendations startup Tripl and retained their key shareholdings in Despegar that is now a listed company. Some other investments of theirs include a $350-million stake in Indonesian unicorn Traveloka.

Most Deals Are under $100 Million

The third quarter of 2017 saw a number of smaller deals, including the purchase of the London-based house-swapping platform Love Home Swap by Wyndham Worldwide in a deal worth $53 million.

Apart from big corporate deals, the travel tech industry is witnessing a series of rival acquisitions by travel startups since the beginning of the year. Outdoor booking service Campsy purchased peer platform Camping and Co. in the second quarter of 2017 while French hosting platform NightSwapping acquired MyTwinPlace in the third quarter of the year. In the last quarter of 2016, B2B travel app Lola acquired metasearch company Room 77 as a white knight investor. This way, Lola gets access to new technologies and expand their business service capabilities.

If the current M&A trend continues in 2018, we can expect further consolidation across the travel tech sector during the coming year. The number of initial public offerings will most probably stay flat but both travel tech startups and established travel companies will actively explore their M&A options.

By Kiril V. Kirilov

Kiril Kirilov

Kiril V. Kirilov is a content strategist and writer who is analyzing the intersection of business and IT for nearly two decades. Some of the topics he covers include SaaS, cloud computing, artificial intelligence, machine learning, IT startup funding, autonomous vehicles and all things technology. He is also an author of a book about the future of AI and BIg Data in marketing.

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