Travel investors remain bullish despite headwinds

While high interest rates and other economic challenges continue to be an issue for startups across the travel industry, the outlook from two active investors remains very positive, with both agreeing opportunities abound for both startups that are shaking up the status quo and those that are solving real problems in the existing ecosystem.

“We’ve seen a lot of opportunity with companies doing something totally different, but for a niche that already exists .. there’s lots of space even in mature markets to disrupt,” said Andy Nau, partner at Ennea Capital Partners.

“But then … there are a lot of startups solving problems that are real. They might not be the most sexy problem, but they actually can create a lot of value for the company they are solving it for. I’m bullish on both sides. I’m also very bullish on the fact there are still so many new travel startups coming through the door, because it’s just a fun industry to be in and everyone wants to travel. So it’s not going away any time soon despite what people are saying.”

Nau and Unlock Advisors founder Cara Whitehill spoke with Phocuswright managing director Pete Comeau as part of the Phocuswright/WiT Global Startup Pitch semifinal event on Thursday. 

Whitehill said she’s particularly excited to see how the preferences of younger demographics begin to change the way shopping and booking takes places across the travel industry.

“I was asked by a young person the other day, why would we use a booking engine?” she said.

“Their generation, it’s all video driven, it’s very image forward, and I think that’s really a paradigm shift for how we think about travel going forward.”

Whitehill, who focuses on angel investing and advising for B2B startups, also called out fractional mobility and decentralized identity as two areas that have potential for innovation.

And while high interest rates may prevail for some time, Nau said this is a great time for “brave investors” who are in for the long term and understand the value proposition.

“They understand the travel industry is one that’s going to continue to grow, and it’s just going to change over time,” he said.

“Environmental-friendliness of the travel industry, trends around being more inclusive, things around different mobility forms - there are so many different areas that are growing, and a smart investor would actually see this a great time to double down.”

Watch the full discussion below.