The travel industry experienced a record-breaking year in 2018 for funding into new businesses.
Phocuswright's annual State of Startups Report, which has tracked the digital travel startup landscape since 2009, found a 55% increase year-over-year ($5.7 billion) in the amount of money going into companies.
This figure accounts for nearly one-third of the $19.7 billion that has been raised by travel startups since 2009.
PhocusWire's sister brand believes one of the key reasons for the funding boom is the global online travel outlook and frenzied late-stage investor support for new business models that have the potential to scale in specific regions or globally.
The vast majority of the funding raised in 2018 was obtained by late-stage companies, some $4.5 billion out of the total $5.7 billion for the year.
Some might consider this to be less than good news for early stage businesses if the rounds are heading the way of established players, rather than backing new ideas or fledgling companies.
Phocuswright's data shows the total number of funding rounds is still declining year-over-year, with 570 signed in 2016 to around 375 in both 2017 and 2018.
Money going into early stage businesses declined from $218 million in 2016 to just $116 million in 2018.
Still, according to Phocuswright, Series A rounds have increased by 35% between 2017 and 2018 - a sign that companies that joined incubators and accelerators a few years ago are now "Series A-ready."
The data is inevitably going to be skewed somewhat when one brand is on a growth tear and captures a large proportion of the capital.
OYO Rooms, for example, raised $1.1 billion in a Series E round in September 2018, accounting for almost a fifth of all travel-related funding during 2018 and an eye-watering 9% of all startup investment in the industry since 2009.
There is good news for those businesses that work on the plumbing behind the scenes of the industry, with 40% of all funding going to business-to-business services during 2018 - although this was slightly down from 45% the previous year.
Inevitably, given OYO's mammoth capital-raising activities, the hotel and lodging sector was the top-funded vertical in the industry during 2018, with almost a quarter (23%) of all investment heading that way.
Private accommodation brands attracted 18% and car rental services took 12%.
Some unlikely sectors had a good year in 2018, according to the data, with packaging the fastest-growing with a 138% increase year-over-year and content/social-related businesses experiencing a 392% jump on 2018 (Culture Trip's massive $80 million raise will have much to do with this).
REPORT: The State of Travel Startups 2019
This annual report – covering companies established since 2009 – provides a detailed view of the current state of travel startups.