Often considered as the rebound year for the travel industry, 2022 is when the world reopened for the most part, and people began traveling once more. Revenge travel was even a trend for a while, such was the consumer desire to leave the pandemic behind.
That said, the first quarter was hit by Russia’s invasion of Ukraine in late February. What followed plunged the industry back into uncertainty and pushed western brands to consider how to address their presence and partnerships in Russia.
But travel is known for its resilience, and alongside the overall travel bounce back was the unsurprising return of significant marketing spend from the online travel agencies (OTA). More than $14 billion was invested, with the bulk of that from Expedia Group and Booking Holdings, spending $6.1 billion and $6 billion, respectively, in 2022.
The figures represented a significant increase on 2021 marketing spend when Booking spent $3.8 billion and Expedia invested $4.1 billion.
Fintech fever
A number of trends surfaced over the course of 2022. The momentum around fintech in travel is a good example. Companies such as Hopper made, or were involved in, a series of moves and partnerships, having unveiled its B2B offering, Hopper Cloud, in 2021, backed by Capital One.
The company widened its insurance-style products further and drove other travel companies to reconsider their ancillary offering and the opportunity to make incremental revenue. Hopper received a further $96 million investment from Capital One and expanded its Capital One Travel partnership.
Meanwhile, other fintech companies such as payments app Revolut deepened its presence in travel. The company launched a vacation rental feature called Homes as part of its Stays accommodation booking service, announced in 2021 and powered by Expedia.
Booking.com was not left out, with Citi’s launch of a new travel booking platform partially powered by the online travel company.
Other moves from financial institutions included the unveiling of JPMorganChase’s strategy to launch Chase Travel. And, global distribution systems Amadeus and Sabre sought to build up their payment capabilities. Amadeus chose to set up a separate unit, Outpayce, while Sabre acquired Conferma to advance its B2B payments offering.
On a basic level, the various initiatives demonstrate the importance of a simple payments infrastructure from a B2B as well as a B2C perspective and the revenue opportunity that that represents. More widely, the moves from financial institutions were a nod to what they saw in their consumer spending data—people were prepared to invest in travel, so why not give customers what they want, build loyalty and keep them within the ecosystem?
While some of the bigger financial institutions were getting into travel, the venture capital side of business was more reticent when it came to investment in travel startups. The looming threat of recession in the second half of year exacerbated the situation, and doubts were cast about 2022’s startup funding level even reaching the $12.5 billion invested in 2021.
However, bright spots including $170 million for Guesty, $125 million for apartment rental platform Landing and $95 million for Placemakr all helped to bring 2022’s funding tally to approximately $14 billion.
Elsewhere across the industry, tours and activities marketplace Civitatis attracted €100 million, and the same amount went into online travel company Kiwi.
The corporate travel segment also stood out in 2022, with newer entrants including Spotnana ($75 million), TravelPerk ($115 million) and TripActions (now Navan, $304 million) all attracting fresh rounds.
Emerging tech
While many of the above companies were working hard to scale and drive efficiency in existing processes, other startups and established players had an eye on emerging technologies such as the potential for non-fungible tokens (NFTs) and the metaverse to make an impact in travel. Use cases devised for the metaverse, for example, included the opportunity to seek advice and make purchases in the virtual world.
Hotel players such as CitizenM and Millennium Hotels & Resorts, perhaps jumping on the hype bandwagon, also announced plans to purchase land and build in the metaverse.
Broadly speaking, the potential for NFT in 2022 fell into three buckets—travel communities, airline loyalty and NFT passports. While the hype around NFTs has died down, conversations about the trust element that these sort of initiatives and the wider blockchain could bring, are still very much alive, especially as digital identify projects evolve.
The headlines around the invasion of Ukraine may have dominated the beginning of year, but it was Booking Holdings $1.6 billion acquisition of Etraveli Group, first announced in November 2021, that dominated headlines towards the end of 2022.
Rumblings about European regulators blocking the deal finally came to fruition with the commission opening its in-depth investigation into the deal in mid-November. It would take more than nine months from then for the acquisition to be blocked.
Interested in other Travel Tech Flashbacks? So far, we’ve revisited 2018 and 2020, and next week, we’ll delve into recent history with a look at 2024.
