Destination: Disruption — How Can Startups Steer The Future of Travel?

The travel and tourism industry is experiencing a transformation and startups hold the key to redefining the industry’s future. To enable this progress, travel tech startups need continuous support and access to the tools and network necessary to thrive and survive.

Photo by Conor Sheridan on Unsplash

SURVIVING A TURBULENT INDUSTRY WITH INNOVATION

The travel and tourism industry has been in turbulent times since the pandemic. Comparing startups across industries, the travel and tourism industry has received a tiny share of the startup funding. This has shifted since 2020 as investor appetite towards the industry has increased.

Despite the recent signs of positive growth, the industry needs help to ensure its survival. For travel and tourism to flourish in the coming years, the industry must make use of technology and sustainable principles as a necessary precondition moving forward. Innovation in the travel and tourism industry is crucial for it’s future growth and startups are significant drivers of this development.

Janna Goncharova from Startup Norway during the Women Investor Network at Startup Campus

“Travel is one of the industries that adopted digitization first. For example, airline ticket sales were one of the first areas of e-commerce and all industry players are under pressure to keep introducing innovation because of the fierce competition in the sector. Currently, this pressure is even stronger because of the unprecedented challenges the industry is facing due to the global macro environment.”

— Janna Goncharova, Investor Expert at Startup Norway and previous VC at INKEF Capital

Novel solutions are beneficial in advancing the travellers’ experience from contactless check-ins to virtual experiences. Efficiency in business operations within travel companies has also been improved by the innovations enabled by travel tech startups through improved booking platforms and automated management solutions.

DATA-DRIVEN CLIMATE WORK ACROSS THE VALUE CHAIN

The global economic landscape has caused leading players to refocus and look to emerging technologies as demand for efficiency and sustainability increases. This is further enforced by regulations and incentives from network institutions to shifting consumer behaviours.

The industry is experiencing increased pressures to deliver eco-friendly alternatives and foster sustainable practices across its value chain. Just the past year, there were cases involving major players in the aviation industry, raising concerns about the transparency and accuracy of their marketing efforts.

Nito Simonsen, CEO of ClimatePoint, which is a Norwegian company that measures, verifies impact and invests in innovative solutions aligned with net-zero goals, points out that certain disparities still exist across the value chain.

Nito Simonsen from ClimatePoint at the Zero One Hundred Conferences (PE & VC Platform) in Amsterdam.

“The need to track impact spans across the entire value chain. However, we have observed that local and smaller providers often lack the necessary resources and time to implement sustainability measures and obtain verification.”

— Nito Simonsen, CEO & Co-founder of ClimatePoint and previous Asset and Wealth Manager at DNB

ESG reporting has become important among investors and ESG metrics have started to be incorporated into investment decisions. This has impacted startups significantly who may find it difficult to identify what data to collect and report, as well as how to present it in a way that captures the investors’ attention.

Simonsen advises startups and fund managers to seek out reliable climate and sustainability partners as it is essential to obtain verified data on solutions’ actual impact. “There are no instant remedies,” he continues. “Increased awareness […] will lead to gradual but significant improvements in the [industry] in the coming decades.”

ClimatePoint is currently working with Nordic Leisure Travel Group and Strawberry (previously Nordic Choice Hotels) in targeting solutions within the travel industry to reduce emissions and environmental impact in the leisure and hospitality segment.

MAIN ENGINES OF THE WORLD ECONOMY

The travel and tourism industry plays a significant role in supporting the global economy. Projections by the World Travel & Tourism Council’s Economic Impact Research (EIR) in 2023 reveal that the industry is expected to reach a value of $9.5 trillion. The forecast demonstrates the resilience and potential of the aforementioned turbulent industry to drive economic growth, contribute to job creation, accelerate innovation, and enable sustainable practices.

“There is an emerging interest for new travel tech solutions,” declares the CEO of the Nordic Travel Tech Lab, a network connecting start-ups, the travel industry, investors and public organizations. Friestad continues: “Together with our partners in the Nordics and EU, we have seen new collaborations taking place. And startups receiving good investments from international players.”

“It’s one of the main engines of the world economy. […] The industry’s ability to adapt and restructure has been impressive over the past two years. Never before have we seen so many companies develop new products, adapt existing products to new target groups, conduct skills development, and enhance the users’ experiences for the travellers.”

— Per Arne Friestad, CEO of the Nordic Travel Tech Lab

Per Arne Friestad from the Nordic Traveltech Lab

The projected recovery of the travel and tourism industry underscores its vital role in supporting the global economy and fostering international collaboration and connectivity. This importance is reiterated especially in the Nordics as several crisis packages and grants by the government were set aside for the travel and tourism companies.

As interests in travel tech solutions take off, there is an increased need for concerted effort of supporting travel startups and connecting them to key industry players, investors and corporate partners.

EQUIPPING TRAVEL TECH FOUNDERS ON THEIR GROWTH JOURNEY

The Nordic Travel Tech Incubator has been at the forefront of empowering early-stage travel and tourism startups in the Nordics since 2020. The incubator which is a partnership between Startup Norway and the Nordic Travel Tech Lab, has a proven track record of training and supporting founders in running fundraising campaigns, meeting investors and mentors, and building and demonstrating market traction.

Combining Startup Norway’s startup development know-how with the travel industry expertise of the Nordic Traveltech Lab, the incubator also provides a platform for learning industry insights and growing the industry network.

LASER FOCUS ON THE RIGHT THINGS

In the early stages, startups tend to explore multiple directions for their products while experiencing funding and resource constraints. These limitations can be controlled through support in setting up focus and building a structure that the startup can work on. In addition to fundraising, mentorship and meeting like-minded individuals, one of the most valuable learnings of joining the incubator, startups gain laser focus on doing the right things as shared by previous alumni.

“Starting a company involves a lot of stress, and founders are generally extremely busy people. However, it is also vital to focus on the right things, and the incubator certainly helped with that.”

— Soffia Thordardottir, CEO & Product Manager from PaxFlow

The team behind PaxFlow — provides user-friendly no-code tools integrated with major booking platforms so operators can build and automate their workflows.

PaxFlow is an Icelandic vertical SaaS startup company that empowers tour and activity operators to streamline their operations with customer self-service tools and workflow automation. The incubator has helped the company gain a better understanding of shareholder agreements and cap tables.

The software travel startup has recently closed $2.2 million in seed funding this April from Brunnur Ventures, a leading Icelandic venture capital firm. Proceeds from the funding will enable PaxFlow to accelerate its product development and fuel international sales- and marketing efforts.

SMOOTH SAILING TOWARDS SUCCESS

By joining the incubator program, startups also gain access to an exciting Nordic ecosystem that encourages resilience, and adaptation. It equips the founders and their team with the tools necessary to navigate the ever-evolving landscapes successfully.

“The Incubator program is a great community for startups beginning their journey. […] The members of the incubator are there to help and assist, going above and beyond.”

— Sunny Long, Co-Founder & Global CEO at Pie Systems ApS

Pie VAT is a digital platform for tourism, currently providing digital tax-free shopping solutions for stores and tourists. The platform created by the Danish tech company Pie Systems Aps, currently powers tax-free for 1500+ partners around the world. Through the incubator, they were able to expand their network and meet great players in the travel industry to discuss potential partnerships.

The team behind Pie VAT (from Pie Systems ApS) — a digital platform for tourism, currently providing digital tax-free shopping solutions for stores and tourists.

Just recently, Pie Systems have landed a partnership with the Norwegian Sports Industry Association (NSBF). This provides a solid foundation for the startup on knowledge and experience of the sports industry while benefiting the association’s members, customers, and tourists.

“The incubator equips travel tech startups with the tools and network necessary to survive the rocky economic backdrop, but also to thrive together with a disruptive community in the years to come — thus, setting the incubator as the premier destination for emerging travel innovators.”

— Sean Jayven Ramiro Aguinaldo, Program Manager at Startup Norway

The specialised incubator, with involvement and support from major innovation and tourism companies including Hub for Tourism and Innovation (Denmark), and Icelandic Tourism Cluster (Iceland) has been key in providing over 40 travel tech startups since 2020.

The Nordic Travel Tech Incubator is now actively seeking the next batch of startups for this autumn. The free program have already accepted many great companies. Don’t miss out, apply today!

[embed]The Nordic Travel Tech Incubator — the premiere destination for emerging travel tech companies is now welcoming its next wave of founders to join its upcoming edition.

For more information about the incubator, reach out to [sean@startupnorway.com](mailto: sean@startupnorway.com) or visit: https://www.startupnorway.com/travel-tech-incubator