The travel startups industry has grown substantially in the last two decades with credit to digitalization. According to the AngelList website, there are around 6000 travel startups around the world with average valuation of USD 4.1 million. Since travel has become an indispensable part of the human lifestyle, businesses across this vertical have increased extensively. One may recall that there were a handful of travel startups in India like MakeMyTrip and Goibibo a decade ago. The basics these startups catered to in their infant stage was air and rail tickets and later diversifying to holiday tours and packages and hotel stays. Today, there are travel startups not heard of quite often, but spotted only on social media platforms and various search engines. These latest startups take care of curating travel lists, making travel arrangements, offering foreign exchange, handling the back-operations of travel and other related offbeat needs.
Funding of Startups
As the startup industry is evolving so is its backbone i.e. funding. From self and angel funding, startups across the world have now attracted big investors. According to Skift, an intelligence platform providing media and marketing insights of travel industry, there were at least 50 separate investments made in travel startups in 2015 with India’s Tuija and OYO Rooms receiving some of the largest single investments at USD 300 million and USD 100 million, respectively. Ground transportation startups were next, receiving a collective USD 444 million, and these included peer-to-peer on-demand ride and car-pooling apps.
Elaborating on the investment scenario in the Indian digital travel startups market space Chetan Kapoor, Research Analyst – Asia Pacific, Phocuswright, commented, “We’ve tracked the global travel startups ecosystem since 2005, and India remains one of the most funded — and vibrant — travel startup nations with over 100 companies operating in the digital travel space. Over time, India has climbed up the ranks and is now the third-most funded market for travel startups, behind the U.S. and China. Excluding funding to taxi-hailing juggernaut Ola, Indian travel startup funding exceeded USD 1 billion from 2005 to 2017.”
Despite attracting huge funding, the success stories of the startups in Indian travel market space are very less in numbers. In this ever changing era, sustainability and evolving is a serious job and takes a doing to stay in the limelight. Capital investments turning to profits is what every organization aims for but there are only few who take care of their main business objective i.e. serving and sustaining the customer. This is one of the biggest reasons there are hundreds of startups entering the market and after making a lot of noise, are slowly muted.
According to Jimmy Shaw, MD, Shaw Man Software Pvt Ltd, “It is true with every wave of trend in technology, each wave brings with it complete destruction of the previous tech and a virtual rewrite of rules of engagement with the next one, and which will also decide how we as an industry accept, adapt and adopt the same or then wait for the change to consume and destroy us. So what OTAs did to GDS driven-hotels and travel agencies, Airbnb and similar models using second homes is doing to OTAs and hotels. Thus it should not be unthinkable that there will be a next wave that will make even Airbnb look jaded and irrelevant and we need to be ready to remain relevant.”
From what Shaw said, it is quite evident that no one startup business is completely secure. The wants change with the change in the technology trend. Continuous evaluation and adapting to change is the key to success for stay in the long run.
Commenting on the focus of startups in travel space in India, Kapoor said, “With more Indians now familiar with booking transportation – rail and flights – online, startups should now eye emerging and underserved opportunities. Lodging, in-destination activities, broader ground transportation, corporate and, the B2B space within each of these categories are in dire need of digital innovation and disruption.”
The travel startups ecosystem of Indian market is certainly getting diverse each day. From the traditional ticketing services to present day offbeat service offerings, startup businesses are evolving. Although, capital is the core game one dwells into business for but to be amongst the top players, the key is services, sustainability and evolution surpassing the money agenda. Once the clients or consumers start flowing in, money automatically follows suit. Every mountain top is within reach if one keeps climbing, focusing on each step at a time. Emerging startups in the travel space have to learn from the success stories of the big players present in the market and need proper guidance and education with long-term client servicing vision as opposed to short term money making vision as the digital travel market space in India carries immense potential to be exploited in the right way and emerge victorious.