The Middle East's travel startup environment is fueled by rapid sector growth, government involvement and investor attention, even amid ongoing uncertainty.
Middle East-based startups have been making headlines for funding and other news, with Dubai’s Tumodo raising $35 million last year and Dubai-based Turpal being named a PhocusWire Hot 25 Travel Startup for 2025. Saudi Arabia-based Gathern also raised $72 million in August.
According to an August Arab News report, regional startup funding is on the rise as well. In July, funding across the Middle East and North Africa rose to $783 million based on 57 deals. That number represents a 1,411% jump from June and is double what was raised in July 2024.
Cesar Zurita, co-founder and chief business operating officer for Turpal, said the travel startup ecosystem is becoming more sophisticated, and other travel professionals operating in the region agreed.
Pepijn Haima, co-founder of Seraya, said the hospitality sector is expanding at a “remarkable pace.”
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According to Haima, record-breaking visitor counts, large-scale infrastructure investment and a rise in homegrown operators are contributing factors for a new generation of travel companies, with growth further driven by the region’s governments.
“The startup environment in the Middle East is exceptionally dynamic, characterized by ambitious national visions that are directly catalyzing the travel and hospitality sector,” said Shadi Kaddoura, a senior market analyst who covers the Middle East for Phocuswright.
A shift in the startup space
Evolution goes hand-in-hand with development—and the Middle East is certainly on the rise in terms of travel market growth.
An increase in visitors and government support are bolstering the sector and the innovation within it, including startup cultivation.
According to Phocuswright’s Middle East Travel Market Report 2025, the market had exceeded pre-pandemic levels by 2024 up 23%. That's expected to continue, with 7% compound growth annually through 2030. Growth is further bolstered by ongoing digital transformation and a younger, tech-focused demographic.
“The digital boom creates a feedback loop, with more online travel activity stimulating further tech innovation and regulatory support (e.g., streamlined e-payment systems, digital visas), reinforcing the shift,” Phocuswright said.
That’s happening in tandem with a rise in visitors.
“Dubai welcomed 18.7 million visitors in 2024, its highest on record, and Saudi Arabia surpassed 100 million trips in the same period, underscoring the scale of demand that is driving innovation across the region,” Haima said.
Travel companies have also shifted their focus.
“A few years ago, most travel startups in the Middle East focused on traditional online booking platforms or tour aggregation,” Zurita said. “Now, the focus has shifted to end-to-end digital experiences, with more automation, personalization and AI-powered customer engagement.”
And, governments are acting as “major enablers,” according to Zurita. Tourism ministries, free zones and accelerators are providing support to early stage companies through mentorship, partnership and grants. Zurita said Saudi Arabia’s Vision 2030, in particular, has prioritized travel and hospitality as a “strategic growth sector.”
The startup environment in the Middle East is exceptionally dynamic, characterized by ambitious national visions that are directly catalyzing the travel and hospitality sector.
Shadi Kaddoura, Phocuswright
The UAE said on its website that it intends to increase “investments in all tourism sectors,” and the Saudi Tourism Authority said it “positions tourism at the heart of the national transformation strategy,” with regard to Vision 2030. Qatar also launched a tourism campaign in 2021 that included new developments as it approached hosting the FIFA World Cup Qatar 2022.
Works-in-progress like Vision 2030, which includes projects such as NEOM and Red Sea Global, have created demand for solutions in sustainable tourism and experiential travel.
“We see this translating into real opportunities for startups; for example, a venture specializing in AI-powered water conservation for resorts could find a ready market in these arid regions,” Kaddoura said.
“Similarly, the UAE's goal to attract 40 million hotel guests by 2031 is spurring innovation in hotel tech and guest experience platforms. The ambition we see is now matched by sophisticated business models, such as Uplift, the ‘buy now, pay later’ platform, which successfully identified and capitalized on the regional travel financing gap.”
Additionally, changes in traveler behavior have also opened doors for startups.
“Both B2B and B2C customers now expect instant booking, transparent pricing and mobile-first experiences,” Zurita said. “That shift has created huge opportunities for startups that can digitize operations for traditional travel agencies, tour operators or in-destination experience providers.”
Bottom line, there’s more opportunity and room for new entrants in the region.
“From digital booking and experience platforms to design-led operators and alternative accommodation models, travel startups are now being built with the same ambition and discipline that defined fintech or logistics a few years ago,” Haima said.
A closer look at the funding environment
The Middle East’s funding landscape is bifurcated, according to Kaddoura, who is also an investor. Referencing Saudi Arabia’s Almosafer, which he has not invested in, Kaddoura said there is robust capital for tested, scalable models.
Sponsorship is being directed towards operators that can display “clear fundamentals” and “long-term value,” Haima said, but there’s room for earlier stage companies, too.
“Asset-light management companies, tech-enabled travel platforms and experience brands with measurable unit economics are proving most attractive,” Haima said.
For Kaddoura, his investment thesis is focused on asset-light operators in early-stage ventures.
“We prioritize capital-efficient startups that leverage technology to optimize underutilized assets,” he said.
Investors are on the hunt for operators that can scale regionally while maintaining quality service and returns, Haima said.
Scalability is also top of mind for Zurita.
Asset-light management companies, tech-enabled travel platforms and experience brands with measurable unit economics are proving most attractive.
Pepijn Haima, Seraya
“B2B travel technology is particularly attractive because it brings scalability and recurring revenue, something investors in the region are increasingly prioritizing,” he said.
In terms of verticals, investors are interested in experiential travel, B2B SaaS platforms that can help travel companies scale and automate, AI-driven personalization, travel fintech and sustainable travel, according to Zurita.
Kaddoura added that he’s noticed a few trends when it comes to winners and losers.
B2B SaaS and distribution, curated experiences and tech-enabled operations have seen “consistent success.” On the flipside, ventures that are “undifferentiated” have not been as successful, Kaddoura said.
He cited losses for online travel agencies that couldn’t compete with established players. Asset-heavy concepts that underestimated operational complexity and needed capital expenditure and apps without a moat also fell short.
As founders seek funding, Kaddoura advised demonstrating a mastery of unit economics. He said investors will need a detailed breakdown of customer lifetime value, customer acquisition cost and hospitality metrics. He said that list includes RevPAR and gross operating profit per available room. Founders also need to be able to explain how they offer a defensible moat.
An early-stage startup ecosystem
While the Middle East’s travel startup ecosystem is on the up and up, it’s still early days—and it requires careful navigation.
“Founders need to balance ambition with patience by building solid foundations, validating locally and adapting to market nuances,” Zurita said. “Regulations, infrastructure and consumer trust are improving quickly but not evenly across markets.
Still, the potential in the long term is massive, Zurita said.
“The next wave of value is likely to come from those who can innovate in line with the region’s unique opportunities,” Kaddoura said.