Continuing with our Travel Tech Flashback series, this week we took a walk down memory lane to 2020—a year like no other.
Characterized by the COVID-19 pandemic that began in the first quarter of the year, 2020 brought travel to a halt and left the industry grappling with an unknown future.
With consumer travel at a standstill and travel volumes plummeting, major players were forced to conduct layoffs and drastically cut marketing spend. In 2019, Expedia Group and Booking Holdings allocated a record-setting $11 billion to marketing, but in 2020, their combined spend was down nearly 60% to $4.7 billion.
But while we may look at this year as one solely defined by disruption, there were signs of life in startups and M&A, as well as some positive shifts for one of the biggest names in travel.
The startup sentiment
During the first half of 2020, Phocuswright found a whopping 50% decrease in the number of debut funding rounds for travel startups.
Comparatively, follow-on investments were only down 26% compared to the first half of 2019, indicating that investors were putting capital into their existing portfolios instead of hedging their bets on startups.
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“We will wind up doing fewer deals this year as we are becoming more critical on the type of startups we invest in to hedge risks,” Kristi Choi, then head of travel and hospitality ventures for Plug and Play, explained in Phocuswright's State of Travel Startups 2020 report.
“Our priorities are supporting our existing portfolio companies as well as helping our corporate partners find great startups to work with to support the relaunch and reinvention of travel.”
Still, ground transportation saw considerable funding rounds, with e-scooter companies Voi, TIER and Bounce securing hundreds of millions. Autonomous vehicle companies, which have also made recent headlines thanks to partnerships with rideshare giants like Lyft and Uber, saw large investments as well. Grab announced $865 million in funding, Didi announced $500 million, VIA announced $200 million and Bolt announced a total of €250 million.
Ireland-based B2B car-rental and mobility solutions platform CarTrawler received a significant €100 million investment from TowerBrook Capital Partners in May. The investment gave TowerBrook a controlling stake in the company and was intended to boost growth and finance for CarTrawler.
It's worth noting that in Asia, travel and mobility startups received more than $8 billion in investments in 2020.
B2B startup funding also outpaced B2C for the first time—not surprising given the dip in consumer travel. And while the world shifted to a remote work model amid quarantine and stay-at-home orders, corporate travel wasn’t completely adrift either. Shanghai-based Huilianyi raised $42 million in March, India-based Itilite raised $13 million in Series B funding in April and TripActions (now Navan) raised $125 million in June.
M&A
Before confirmation of the pandemic in March, there were notable mergers and acquisitions in the travel tech space, including Mondee’s purchase of Cosmopolitan Travel Service for $1.2 billion in February.
COVID didn’t completely stall M&A, either. Mondee also acquired Rocketrip in September, and July marked TravelPerk’s acquisition of Albatross API.
There was also notable consolidation in this business travel sector, with Corporate Travel Management acquiring Travel & Transport in September for $200 million.
In its State of Travel Startups report, which was published in November 2020, Phocuswright actually predicted that 2020 was “on track to surpass all previous years” in terms of acquisitions, given that 24 were already on the books by the mid-year point.
“We must assume this is driven by the pandemic, with good deals available for acquirers and fire sales/acqui-hires for struggling companies,” the report stated.
However, 2020 didn't end up setting acquisition records, according to Phocuswright's The State of Travel Startups 2024 report. In total, 2020 saw 53 acquisitions, compared to 75 in 2019 and 90 in 2018.
Big companies, bigger headlines
Airbnb & the digital nomad
In a PhocusWire feature published at the end of 2020, Airbnb and private accommodation was dubbed “Newsmaker of the year,” and it's not hard to see why.
March 2020 was a month of panic, and one that Airbnb CEO Brian Chesky said would end travel as we knew it.
“We spent 12 years building Airbnb's business and lost almost all of it in the matter of four to six weeks,” Chesky told CNBC in June.
But rather than singing a final swan song, Airbnb marked its entry on the NASDAQ trading floor of the New York Stock Exchange that December.
This was thanks in large part to the rise of the digital nomad and Airbnb's strategic shift to long-term stays. Travelers were seeking somewhere to get away—and away from the crowds—which made Airbnb’s business model all the more attractive.
Cruise collapse
We’d be remiss not to mention the cruise sector when discussing 2020, which was facing a devastating $32 billion loss due to the pandemic.
Cruising was suspended in U.S. waters from mid-March through the end of the year, which was also estimated to cut 254,000 American jobs. While the sector was implanting health-focused protocols in hopes of setting sail again, cruise travel didn’t officially pick back up until June 2021.
Google’s antitrust suit
Google was also in hot water in 2020 when the U.S. government filed an antitrust suit following a Justice Department investigation.
The suit alleged the search giant abused its dominant position in both search and advertising to keep competition at bay.
At the time, a Google spokesperson called the lawsuit “deeply flawed,” stating that “people use Google because they choose to—not because they’re forced or because they can’t find alternatives.”
Amazon’s tours and activities venture
Amazon also expanded its presence in the travel and tourism industry in 2020 with the launch of Amazon Explore. The platform offered different products, including virtual walking tours and landmark visits, intending to capitalize on demand for virtual experiences and tours during the pandemic. Two years later, the e-commerce giant shut the vertical down.
The current environment & looking ahead
It’s difficult to compare this “unprecedented” year with others, but significant changes forced travel to reshape and reconsider its approach to both B2B and B2C markets.
Speaking with PhocusWire in September 2020, Clara Liang, who was Airbnb's vice president and general manager in 2020, predicted digital nomad life would be a lasting trend, which has rung both true and false. Many companies have since emerged from the pandemic and issues return to office mandates, while some still allow for this kind of work-life balance. Still, Airbnb has only continued on its upward trajectory in 2025, with the introduction of its revamped Experiences vertical and new Services option—and apparent positive response.
In 2024, a U.S. district judge ruled that Google illegally used its market power to create a monopoly over online search. However, Google isn’t slowing down either, with recent expansions to its AI Mode feature and upgrades to its travel search on mobile.
Amazon bounced back in its hospitality efforts too, announcing the launch of Alexa+ earlier this year. The next-generation voice assistance can help travelers book tickets or find travel inspiration, among other capabilities. The platform has already partnered with major travel brands such as Tripadvisor and Uber.
And while 2020 was also a particularly trying time for the cruise sector, a recent report from the Cruise Lines International Association revealed positive trends in first-time cruisers, intent to cruise, multi-generational travel and higher satisfaction ratings.
Stay tuned next week for an in-depth review of travel tech headline-makers from 2022.