The travel market has already recovered from the pandemic and continued to grow. By 2027, it will surpass the $1 trillion mark. This is an excellent opportunity to enter this market right now. However, it’s important to understand the new trends to tap into! Here’s a list of such trends that can inspire. And even specific examples of startups that can be replicated.
Project Essence
Layla is an AI assistant that helps in choosing and planning a trip.
For this, there’s no need to search for anything. Just ask questions to the AI assistant in the app’s chat or on Instagram, and get answers.
The AI assistant provides responses not only in text but also shows videos of the landscapes of the places one can visit, and photos of hotels or apartments where one can stay.
Liked trips can be organized right through the chat – including ticket purchases and accommodation bookings.
The Layla app was released just a few days ago. Simultaneously, the startup announced that they had raised their first 3 million euros in investment.
What’s Interesting
In September, I wrote about another fresh startup, Mindtrip, founded this year. They haven’t even released their app yet but have already raised 7 million dollars in their first funding round.
Interest in travel services is due to the travel market actively recovering post-pandemic and quarantine. In 2019, the market size was 776.45 billion dollars, fell to 346.36 billion in 2020, and is expected to grow to 854.77 billion in 2023, even exceeding pre-pandemic levels. By 2027, the market is expected to surpass 1 trillion dollars.
The travel market’s recovery coincided with rapid AI technology development. Naturally, startups entering this rebounding market have actively utilized AI as their competitive advantage.
Hence, the emergence of startups like Mindtrip and Layla is quite understandable with this trend. But not only that! From Layla’s investment presentation, a few more interesting points can be gleaned, so here’s their argument chain.
The travel industry has long been “broken.” To choose and book a trip, one needs to use a bunch of different services – starting from Google search to platforms for booking tickets, hotels, or apartments.
The specificity of the current moment is that travel orders now start not even with a search. The starting point in 90% of cases is now social networks and blogs, where people learn about interesting places. And then what? They again have to go through the same “broken” path consisting of a bunch of separate stages.
It seems that you can’t create a separate product that combines all the necessary components from scratch – because within one product, “you can’t embrace the unembraceable.” The only solution is to create a platform built on top of other specialized products. But where the user experience represents a seamless blend of all the necessary steps for organizing a trip – from the “dream” of where to go, through exploring possible ways to get there and places to stay, to booking and paying for the chosen option.
Layla allows this, as the app has a) an AI assistant capable of suggesting interesting travel options, and b) the ability to view and choose specific ways to get there and places to stay.
The most important feature of Layla is personalization. The AI assistant learns to offer the user places that might be of interest specifically to them, and tickets and accommodations that fit their desires and budgets.
However, providing people with the necessary information is not enough – it has to be presented in the most convenient and persuasive format for the user. Today, such a format is short vertical videos, showing users the places they can visit.
Therefore, Layla stands at the intersection of two most current trends – a) AI, capable of searching for information useful to a particular user on the internet, and b) vertical videos, ensuring user interest and engagement.
Then, a key component of such a service should be a wide range of quality video content in the form of vertical videos about many different places. Without access to such content, Layla asserts, competitors will inevitably fail.
And this slide, to my extreme surprise, is not in the presentation. The trick is that one of Layla’s founders is the person who created Beautiful Destinations in 2012. It’s a creative content studio in the field of travel, which over time has established connections with many travel bloggers and accumulated a lot of relevant content.
Part of this content is published on social networks, where it has gathered an impressive number of subscribers interested in interesting places and travel. For example, they have 26 million followers on Instagram.
In other words, it turns out that one of Layla’s main features is vertical videos, from which users can quickly and easily book the trips they like 😉
This immediately reminds us of the startup Unravel. They created a “TikTok for travel,” and at that time, even without any AI assistant. Their app looks like an endless feed of short videos where external bloggers talk about interesting travel places – from where you can directly book hotels and excursions in the app. Naturally, like TikTok, the app has a feature for automatically adjusting the feed to each user’s interests. The startup finds bloggers itself, promising them a percentage of trips booked through their videos.
Where to run
The overall direction is the creation of new platforms and applications for the travel market. And here’s why.
Firstly, it’s a huge market that has always been growing. It has almost fully recovered from the pandemic, and its growth will continue. Secondly, as cynical as it sounds, many companies died or slowed down during the pandemic, freeing up space and opportunity for newcomers to the market. Thirdly, it so happened that during the pandemic, AI technologies and users’ content consumption habits significantly evolved, allowing successful competition with the remaining old players by using new technologies and adapting to changed user tastes. The first option is to simply copy the likes of Layla or Unravel outright.
However, one can also look at the current trends in the travel market to focus on important aspects that can help those wishing to enter this market differentiate themselves from competitors. For this, let’s look at the global travel market trends of 2023, published by American Express Travel.
People have started preferring to travel to new places for them, rather than the usual ones. 89% of people claim they want to go to some new place, with 68% saying they will be proud and boast about it to others.
People are increasingly discovering such new places online – 75% find new places for travel on social networks, and 64% in news, TV shows, or series.
Among the new generation, this trend is even more pronounced. TV shows and series inspire 53% of Generation Z and 43% of millennials, Instagram – 46% of Generation Z and 22% of millennials, and TikTok – 29% of Generation Z and only 7% of millennials.
Moreover, Generation Z has another feature. 61% of this generation say that for choosing a travel destination, it’s crucially important – whether they can post beautiful photos and videos from such a trip on their social networks. This significantly exceeds 49% of similar responses in general. Although, in general, this is already a lot!
This trend was focused on by the startup Smiler. They created a platform where travelers arriving in a city can find local photographers ready to take beautiful photos against the backdrop of local attractions. And you can also book visits to these places for these purposes, even to locations closed to the general public. Smiler raised 15.3 million euros in investments.
Another important criterion for choosing travel destinations is whether there’s good food to eat 😉 81% of travelers consider the opportunity to try local cuisine important. Meanwhile, 66% of people get information about food and places to eat from social networks and blogs.
In this context, one can recall the startup Atmosfy. They made an app where users could leave videos about the restaurants and clubs they visited. Surprisingly, there were people who started using this information to plan trips to other cities and even countries – right in line with the described trend. Since then, the startup has been expanding the spectrum of place categories and app functionality. Atmosfy raised 23 million dollars in investments.
And people have become more interested in places where they can take care of themselves during travel – fitness, psychological rehabilitation, or self-care. 72% of people say they pay more attention to this than a year ago. And 57% are even ready to extend their trip duration to a place where they can fully engage in these activities.
In general, there are many opportunities and options for entering the travel market now. The main thing is not to try to do it using the usual but already old-fashioned “travel booking websites.” That’s yesterday’s news 😉