Hospitality, events & travel

Travel and tourism make up almost 8% of global GDP. But despite the industry’s economic clout, it’s never been a particularly fertile ground for startups, with the sector receiving just 1% of tech funding raised in Europe over the past 15 years. The sector looked even smaller last year with European startups in hospitality, events, and travel drawing $271m from VCs, a considerable drop from the $647m raised in 2022.

Zooming out, the picture is a little different. There’s a global upswing in travel, with holiday goers looking to make up for time lost during the pandemic years. Some VCs are taking notice. Investor traveltech.vc recently launched a €50m fund geared towards the emerging stars of European travel. Plus, Barcelona-based TravelPerk secured a hefty $104m in January, with VCs SoftBank, Kinnevik and Felix Capital all chipping in. With heavyweight investors like these stepping up, it's a promising sign for early-stage founders.

And then you have one of the hospitality sector’s big, breakout success stories. Over 5,000 hotels have adopted software by Europe’s recently-minted tech unicorn, Mews, which raised $110m in March. Started by ex-hotelier Richard Valtr in 2012, the Amsterdam company creates tech to automate everything from front-desk check-in and payments to reservations and housekeeping management. Acquisitions have played a big part in Mews’ growth: TechCrunch reports the company has acquired eight other startups in the hotel IT space, including three in the last year (namely: Frontdesk Anywhere, Hotello and Nomi).

Business travel, however, has not returned to its heyday. A 2023 Deloitte survey of over 300 travel managers, 228 of whom are in Europe, found that corporate trips will likely still be smaller this year than in 2019, mainly due to the sticking power of remote work. And with inflation gobbling up savings and forcing businesses to cut back, business travel trends will surely ebb and flow for the foreseeable future.

Moving from travel to event tech, things are harder still for startups. In recent years, we've witnessed the closure of London-based Teeoh and Copenhagen-based Tame. There was also the recent spectacular bust of one-time mega company Hopin. Although ventures like Helsinki-based Brella and London’s Grip are using AI to put a fresh spin on event networking, a noticeable lack of new founders are entering the event tech scene.

All in all, the dry powder available for travel tech and events startups is rarely in the hundreds of millions, as startups would love. Those companies that raised funding in 2021 and 2022 will likely seek capital again soon but the apparent lack of investor appetite spells trouble. Expect 2024 to be another “investor market”, with startups scrambling to get that rare and much-coveted term sheet.