Travel startup activity is surging in Asia. The Asia Pacific (APAC) travel market is maturing, breeding interest in new ideas and innovations.
Established companies often find it hard to adapt to a market’s evolution, making the APAC market the perfect place to found a startup.
NB: This article is written by Mary Russell, marketing copywriter and coordinator at PhoCusWright
According to a PhoCusWright study The State of Startups: Asia 2005 – 2013, the number of startups quadrupled between the years 2011 and 2013 compared with the previous three years. And they are met with success.
In those same years, publicly disclosed funding increased 257% compared to 2008 - 2010.
David vs. Goliath
China is the APAC country with the most startups – over one in four. India is the second hottest with one in five, followed by Singapore with 14%.
Considering population and country size, Singapore may come as a surprise. Companies in the market’s giant, China, have no need to look for funding or business outside of the country’s borders – instead, they expand into the smaller, but still dynamic cities within China. This leaves the Southeast Asia markets ripe for the picking.
Singapore, with its relatively small population and widespread use of the English language, has more international DNA. It’s perfectly positioned to capitalize on the broader Asian market.
Ground transportation is king
Ground transportation is the vertical with the most funding in Asia. Each company drew an average of $18.3 million of investments between 2005 and 2013.
Ground transportation is followed by lodging with the second highest in funding and the largest number of companies.
Asian startups lacking creativity
While startups are booming in Asia, few companies have shown true innovation.
Research analyst at PhoCusWright, Maggie Rauch, says:
"APAC startups do best when they adapt existing models to fit local market realities, and the companies that do this best are generally the ones attracting the most investment activity. The speed with which a business model can be copied or adapted is accelerating."
The European startup market
Europe is home to the second most, and more innovative startups. Even in the wake of financial crisis, 103 of the 155 startups founded between 2005 and 2011 were European and recorded funding grew 343%.
According to PhoCusWright’s Travel Innovation: The State of Startups 2005 – 2012, the vertical with the most opportunity is lodging and vacation rentals (VR), with $1.6 billion in funding from 2005 to 2012.
The European VR market has abundant opportunities for improvement and room for new entrants.
Lodging and air are close competitors with vacation rentals, with average funding per startup at $6.5 million.
Want more on European startups?
Every year The Travel Innovation Summit at PhoCusWright Conference brings together the people with the freshest ideas and brightest minds.
This spring, PhoCusWright extends its reach across the Atlantic with its first-ever European Travel Innovation Summit at the new PhoCusWright Europe conference, taking place in Dublin, Ireland, 19 – 21 May, 2014.
Watch the video below to hear from our latest innovators and see if your European startup fits the bill:
NB: This article is written by Mary Russell, marketing copywriter and coordinator at PhoCusWright. It appears here as part of Tnooz’s sponsored content initiative.
PhoCusWright is the travel industry research authority on how travelers, suppliers and intermediaries connect. Independent, rigorous and unbiased, PhoCusWright fosters smart strategic planning, tactical decision-making and organizational effectiveness.