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TRAVELTECH REPORT 2021

Mapping companies developing digital innovations in travel

 

Executive summary

Traveltech has seen incredible growth internationally with companies including the Expedia Group reimagining how we book our stays. The UK has been a leader within the space, Scottish market leader Skyscanner has enhanced booking processes as well as Culture Trip using Artificial Intelligence to provide optimum travel content and experiences.

The last few years have delivered new challenges, Covid-19 had a tremendous impact on travel with restrictions in place worldwide consumers have been unable to navigate as they once could. This report analyses the UK Traveltech ecosystem from an investment lens before and during Covid-19 to measure opportunities within the industry.

The data collected for this research shows that despite Covid-19, Traveltech is a strong and stable sector, moving from what is considered to be an emerging space to a more established sector. 

Despite these headlines, many companies have faced many challenges over the past year, though within Traveltech there is still a strong pipeline of companies at the seed stage showing incredible potential. 

Data for this report was collected from various sources, including Beauhurst, a UK based data provider, the ONS (Office for National Statistics) and Pitchbook, a global data provider.

For definitions of key terms used throughout the report, please see our Scaleup Glossary.


 

Key statistics

  • Over £1bn has been raised by Traveltech companies in the last 3 years.
  • Traveltech companies received over 800 deals in the last 3 years.
  • There was record equity investment in Traveltech in 2019 raising £504mn with a record 306 deals.
  • Despite the pandemic, Traveltech companies raised £358mn in 2020 from 249 deals.
  • 50% of Traveltech companies are at the seed stage, showing a real pipeline within the sector.
 

Forewords

Ivan McKee MSP

Scotland’s Minister for Business, Trade, Tourism and Enterprise

Traveltech is a collaboration between the tech sector and the tourism and hospitality industry. Both technology and tourism make a significant economic and cultural contribution to Scotland by creatively finding ways to attract visitors, and deliver high-quality experiences whilst creating sustainable jobs and generating investment.

Scotland strives to become a European leader in Traveltech innovation. With UK equity investment in this growing sector topping £350 million in 2020, amidst the greatest crisis the travel sector has ever faced, it is clear that Traveltech will play a vital role as Scotland recovers from the challenges of the Covid-19 pandemic and embraces the challenge of driving truly sustainable tourism.

The Scottish Government will continue to encourage and enable the growth of the Traveltech sector in Scotland and The Traveltech Report 2021 will help us better understand this innovative fast-growing space and support our entrepreneurs and businesses.

Joshua Ryan-Saha

Director, Traveltech for Scotland

Traveltech encompasses both the application of technology to the tourism and hospitality industry. Technology has already transformed these sectors and they are further poised to benefit from new products and services utilising robotics, artificial intelligence and immersive technology.

In a world facing multiple crises in health and climate, Traveltech innovations are needed, now more than ever, to help people travel safely and responsibly. 

The Traveltech Report 2021, a partnership between Tech Nation and Traveltech for Scotland, is a great starting point for tech businesses and entrepreneurs to understand the market and develop strategies to take advantage of the growth opportunities enabled by Traveltech.


 

Partner

In partnership with Traveltech for Scotland

Traveltech for Scotland is a cluster organisation that has been set up to make Scotland one of Europe’s leading traveltech hubs. It is a community at the intersection of travel technology businesses and the tourism and hospitality sector and the cluster focuses on areas where there are opportunities for growth for the sector in Scotland. These include facilitating the marketplace for travel technology products and services, stimulating innovation, supporting access to finance, skills, and export markets. 

Cluster members represent the diversity of businesses within the traveltech sector including technology companies focused on hospitality, hotels, attractions, events and leisure. Traveltech for Scotland is hosted by the Edinburgh Futures Institute, part of the University of Edinburgh. It is jointly funded by Scottish Enterprise and the 2014–2020 European Structural and Investment Fund through SPRITE (Scottish Programme for Research, Innovation and Technology Ecosystem) which is a programme to co-fund projects with European Regional Development Funding.

To find out more, contact Joshua Ryan-Saha, Director, Traveltech for Scotland.

 

What is traveltech?

Technology has dramatically changed the way we travel. In recent years, Traveltech has grown into a multi-billion pound industry with companies such as Airbnb having an IPO in 2020 with a market capital of $88bn and Skyscanner, founded in Edinburgh, Scotland with a valuation of over £1.4bn and employing over 1500 staff according to Pitchbook data.


Traveltech has opened the travel industry up to rapid innovation, customers are now using online travel agencies (OTA’s) to compare millions of accommodation and travel choices to best suit their needs enabling businesses to grow into this global marketplace. Global Distribution Systems (GDSs) are also used as data networks to connect service providers such as airlines and hotels to these travel agents. In 2019, data from the office for national statistics (ONS) showed that there were 93.1 million visits overseas by UK residents whilst overseas residents made 40.9 million visits to the UK spending a total of £28.4bn highlighting the economic importance of the travel industry.

Case study

Marketplace for experiences

Craig Everett, Co-founder and CEO

Holibob

Holibob is a B2B platform for the distribution of experiences and things to do. We are on a mission to make incredible experiences and things to do easily accessible to every traveller globally. 

During the pandemic, Holibob has been building B2B technology to help operators come back stronger after the pandemic by providing a platform that brings operators, resellers and their end-customers closer together. 


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UK equity investment

Despite the pandemic, equity investment in traveltech was over £350mn in 2020

Between 2015 and 2019, UK Traveltech companies saw equity investment more than double from £190mn to £504mn. The pandemic brought a halt to the majority of international travel which saw investment decline in 2020. However it was still £358mn in 2020. This is 8% higher than investment in 2017.

In 2020, there were several huge Traveltech deals including Impala, a London based Traveltech company that has developed a JSON API for the hotel industry to integrate property management systems which raised £15.5mn. There were also other significant deals from I6 Systems, a Hampshire based company that develops fuel management forward for the aviation industry which raised £7mn.

(Source: Beauhurst, Tech Nation, 2021)

Number of deals

In 2019, as well as being a record year for Traveltech investment, it was also a record year for the volume of equity deals completed. Traveltech investors invested in 306 deals, which fell to 249 deals in 2020 due to the pandemic. Despite this, there were still sizable investments in 2020 including Masabi, a ticketing platform for transport which raised £4mn as well as Travala, based in Lancashire which raised £1.49mn for their blockchain-based accommodation platform.

(Source: Beauhurst, Tech Nation, 2021)

Case study

Contactless guest journey

Julie Grieve, Founder and CEO

Criton

Criton is a guest engagement and integrations platform. The hospitality industry desperately needs to address consumer demand for mobile interaction. Since the global pandemic demand from guests and hoteliers has increased significantly.  


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Stage of company

Nearly 50% of Traveltech companies are at seed stage, suggesting a nascent and emerging tech sub-sector

There has been a surge in Traveltech companies since 2016, this is evidenced by nearly 50% being seed stage. They include Citizen Ticket based in Edinburgh, which is a blockchain event and travel ticketing platform.

(Source: Beauhurst, Tech Nation, 2021)

Venture stage companies accounted for 28% of the companies including SkiYodl based in Norfolk with a platform to help consumers book Ski holidays. Companies at the growth stage accounted for 12% including Triptease, a booking tool for hoteliers. Companies at the Established stage accounted for 9%. 

Primary investment for Traveltech companies came from Seedrs, Crowdcube, 24Haymarket, Index Ventures and MMC Ventures.

Employment

The majority of people employed in Traveltech companies in the UK are in seed, or pre-seed stage businesses

(Source: Beauhurst, Tech Nation, 2021)

TravelTech companies employ approximately 88,300 people in the UK. From this, the leading range for companies is 10-24 people making up 27%. With Seed being the leading company stage, it is no surprise to see that companies with less than 5% make up 26% and 5-9 employees 21%.

Case study

'Tradigital' transformation

Daniel Rodgers, President and Founder

Qikserve

QikServe is on a mission to drive digital transformation within food and hospitality. We achieve this by providing businesses with touchless digital ordering and payment solutions.  

Across our broad customer portfolio, which includes restaurants, tourism and leisure, theatres and hotels, our core expertise remains focused: give guests the convenience to order and pay for food and drink, whenever and however they want.  


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Accelerators

The leading accelerators for TravelTech companies was The Business Growth Programme, which had supported 26% of companies who had attended an accelerator or incubator programme.

(Source: Beauhurst, Tech Nation, 2021)

One firm supported by the Business Growth Programme is Esplorio, an online diary that also uses social media accounts for travel information. This was followed by the Mayor’s International Business programme which had 20%, whose alumni includes Masabi, a firm that also attended Tech Nation’s Future Fifty programme, which totalled 6%.

Case study

The 'YouTube of Audio-guides'

Shaon Talukder, CEO and Founder

Geotourist

Geotourist is one of the leading travel-storytelling apps. We are building an audio map of the world to help inspire people to explore places using our global platform for self-guided GPS audio tours. 

We have been described as the “YouTube of Audio-guides” which aggregates authentic user-generated content from locals, communities and celebrities through to respected organisations like Historic England, Visit Scotland, National Trust, American Institute of Architects & National Parks Australia. 


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International investment

The UK followed international investment trends, there were 1044 deals completed in 2019 with $10.8bn invested. This fell to $5.2bn in 2020 (January to November) showing a 51% fall compared to 29% seen in the UK. 

(Source: Crunchbase, Tech Nation, 2021)

 

What next?

This report is the first stage of research into the Traveltech sector. Traveltech for Scotland is initiating further research that will also look in greater depth at Traveltech’s potential growth in Scotland as well as the travel and technology trends that Traveltech businesses are responding to. 

The future of Traveltech is being shaped by the pandemic and the climate crisis. New companies are being formed around the increased demand for nomadic and remote working including UK Traveltech companies Selina and Swurf. Innovative products at the intersection of fintech and Traveltech are being launched including new options for flexible payments and insurance. There are a growing number of Traveltech companies seeking to support the drive to Net Zero carbon emissions.   These include Edinburgh early-stage start-up Electrek Explorer that is focused on enabling low carbon electric vehicle travel.

Home to Skyscanner, one of the global leaders in Traveltech, Scotland’s Traveltech community is growing with over 100 businesses identified by the Traveltech for Scotland cluster. 

Traveltech is just one part of the thriving Scottish tech industry. Edinburgh-based tech incubator CodeBase has raised over £600 million between its tenant companies. Scotland also hosts the third largest volume of fintech companies in any UK cluster and has recently established a £22.5m Global Open Finance Centre of Excellence.

Case study

Making the most of hotel data

Allan Nelson, Co-founder and CEO

For-sight

At For-Sight, our vision is for data to be recognised as a critical business asset for hospitality businesses worldwide. 

We help hospitality professionals unlock the guest journey, through data management, operational insights, and tools to provide a personalised experience for every guest at every touchpoint.


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Methodology

Beauhurst

Beauhurst data was used to identify high growth digital tech firms in the UK. The methodology used intends to closely replicate the SIC code based definition used for official statistics. In Beauhurst we aimed to capture companies at the interface of tech and travel.

Crunchbase

Crunchbase is a platform for finding business information about private and public companies. Crunchbase information includes investments and funding information, founding members and individuals in leadership positions, mergers and acquisitions, news, and industry trends. Crunchbase data was used as the primary data source to access data on international Traveltech investment.

Glossary

Equity

Any company that has secured equity or venture debt fundraising from any source. We are the only data provider that tracks every equity deal – even those that are never made public.

Seed

A seed-stage company is a young company, with small numbers across their employee count, valuation, and total amount of equity raised. There may still be uncertainty as to whether their product has an adequate market, or they may be working towards gaining regulatory approval. Their most common sources of funding are from grant-awarding bodies, crowdfunding pages and from business angels.

Venture

A venture-stage company has established its business model and technology over some years, and has secured funding and a valuation into the millions. They will likely have some revenue, and may be expanding from their initial product range or branch. They are most likely to be receiving funding from venture capital firms, but more and more are using crowdfunding too.

Growth

Once a company has been around for more than 5 years and has multiple offices (potentially international), they are more likely to be considered a growth-stage company. With their technology approved by regulatory bodies, they will likely be bringing in significant revenue and carry a valuation in the millions. We are also likely to see further expansion in the product range and international activities of the company.

Established

Established companies are those that have been trading for 15 years or more, or between 5-15  years but with a three-year consecutive profit of £5m+ or turnover of £20m+. You can imagine the likes of Google and Apple falling into this definition. These companies usually have multiple offices, and their brand may be widely recognisable. Funding at this stage is often supplied by corporates, private equity houses, specialist debt funds and major international funds. 

Zombie

A zombie company is a business that has been neglected for a prolonged period of time or is in a troubled financial situation. Thus, whilst the company is not ‘dead’, it appears to be only barely operating.

 

Case studies

Case study

The world's most downloaded museum app

Anna Lowe, Co-founder

Smartify

At Smartify, our mission is to help cultural institutions reach a global audience through innovative technology and engaging storytelling. The Smartify platform enables organisations to create, share and monetise cultural content for audiences at home and on-site.


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Case study

Data driven destinations

Mirko Lalli, CEO and Co-founder

The Data Appeal Company

A destination’s online reputation does not only affect destination marketing organisations (DMOs) and tourism boards but every business operating inside of that neighbourhood, city, region or country. Hotels, restaurants and other operators involved in the visitor experience each play a unique role.


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Case study

Enabling local discovery

Ally Burns, Co-founder

Whereverly

Whereverly aims to transform the tourist visitor experience by bringing together tourism, culture and local communities.  

Our first product was the Highland Discovery app for Transport Scotland, which encourages users to explore lesser-known towns, historic sites and scenic routes along the A9. We have since gone on to deploy our platform in six new regions, with four new deployments underway. 


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Case study

Creating next generation travel technology products

Mal Baritt, CEO

Traveltek

Traveltek’s core platform allows agents to search, book, and manage a holiday booking, providing a seamless end-to-end SaaS solution to capture the entire customer journey. Our vision is to build a global marketplace by connecting the world of travel through leading technologies, distribution capabilities and data insights. 

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Case study

Optimising holiday rentals

Doug Stephenson

TravelNest

TravelNest is a leader in vacation rentals travel-tech, empowering hosts to unlock the potential of their holiday homes everywhere. Our software gives properties global exposure to millions of potential guests. Coupled with our listing automation, property performance optimisation and calendar synchronisation, TravelNest is a solution for vacation rental hosts looking to maximise their occupancy whilst greatly reducing administration time.

The pandemic has had a severe and lasting impact on the travel sector. Despite strong performance and continued growth throughout 2019 and early 2020, TravelNest was significantly affected by travel bans and lockdowns. However, we have experienced an outsized return to growth, with a disproportionately strong bounceback in comparison to the wider travel market. This is driven by changing traveller preferences post-Covid including a switch from international to domestic travel, hotels to vacation rentals and urban to rural destinations.