Vynn Capital, Southeast Asian early-stage venture capital firm, today released what is said to be the regions first travel tech report Travelution. The venture firm focusses on selective industries, including tourism as well as synergistic verticals such as food and property.
Back in 2018, Vynn Capital jointly announced a partnership with the World Tourism Organisation of United Nations (UNWTO), which has been championing the effort of encouraging governments and companies to be innovative and adopt digital transformations.
Travelution was created with input from the Pacific Asia Travel Association (PATA) as well as UNWTO.
The report notes that the emergence of online booking solutions began in the 1980s before hotels and airlines partnership followed suit in the 1990s. The 2000s marked the different verticals in the travel tech sector, and the 2010s were the year of UX personalisation.
Noting further on the past decades trends of personalisation, the report pointed out that several sub-domains in the travel tech sector emerged, such as pre-trip, midway, and post-trip. Pre-trip involves information discovery served by companies such as Expedia, CTrip, TripAdvisor, and Airbnb. Meanwhile, midway entails support to travellers such as Triip, that offer personalised travel experiences for travellers who are exploring new destinations.
Finally, post-trip involves the sharing of experiences and comparison of itineraries.
Entering 2020, the report shares that the major trend of this decade is still personalisation. The trend of personalisation in the travel tech sector expanded to the point where travel tech companies sell entire experiences across the value chain.
Travel tech companies invest to increase offerings such as food services, transportation, health and wellness, and activities operators. Furthermore, as travel tech companies expand into a vacation and short-term rentals, there has been a proliferation of property-related services.
Boundaries between industries are quickly breaking down and the ecosystem is flattening.
Looking at the bigger picture on the global travel industry, the report marks that it has grown to over US$1.6 trillion, over 10 per cent of world GDP. Tourism is recorded to employ two in 10 people in the global economy.
As for deals in the travel tech sector, 2019 saw an all-time high of 159 acquisitions and funding activity remains strong, with Asia leading the number of capital raising with 54 per cent. Indonesian startups took 70 per cent of funding, Singaporean companies tapped 28 per cent.
Online travel is the top sector in the internet economy with roughly US$30 billion in bookings and growing 15 per cent YoT.
The firm further predicted that there will be more investments into travel tech startups in the region by larger traditional players as well as later-stage funds. At the same time, it is also expected that there will be more consolidations happening as an increasing number of smaller startups get bought out or absorbed by larger platforms and companies.
Whilst many would view industries such as travel as a silo opportunity; we believe there is evidence of convergence companies cutting across industries and people become savvier about industries that are deemed as a synergistic expansion from the one that they are in, said Victor Chua, Vynn Capitals Founding & Managing Partner.
Investing into the right sectors is becoming more important and Vynn Capital believes that focusing on travel tech as well as the selected industries where we are investing is a competitive advantage over the long term, especially when Southeast Asias economies are converging, he added.
The report can be requested from the firm or downloaded from the website.
Vynn Capital is an early-stage venture capital firm founded with the objective of bridging the gap between traditional industries and the new economies through the development of technology. Key industries of focus include Travel, Property, Food and FMCG, Female Economics as well as Business Enablers (including logistics and fintech).
Vynn Capital is currently active in Malaysia, Singapore, Indonesia, Vietnam, Thailand, and Myanmar.
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