The era of stocking up on face masks and staring longingly at our passport from the confines of isolation are long gone.
In 2023, the global travel and tourism sector jumped 23.2 per cent from the year prior to 9.1 per cent of global GDP, as McKinsey research shows individuals increasingly favour spending on experiences over material possessions.
And you’ve got to be online to capture the greatest demand.
Online and app booking experiences are now largely preferred for modern travellers, with a 142 per cent increase in mobile bookings between 2022 and 2023. The global online travel agency market size, valued at $53.534 billion in 2022, is expected to expand at a sizeable CAGR of 6.76 per cent reaching $79.258 billion by 2028.
The travel sector has outperformed traditionally “safe” stocks like utilities and banks, with the Dow Jones U.S. Travel & Tourism Total Stock Market Index (DWCTTR) returning +29.69 per cent compared to the banks’ index at +6.20 per cent last year.
The returned demand combined with the booming growth of new travel technologies presents diverse investment opportunities.
So who are some of the travel technologies to watch out for in 2024?
- Helloworld Travel (ASX:HLO)
Helloworld Travel is an Australian and New Zealand travel distribution company, comprising retail travel networks, corporate travel management services, destination management services (inbound), air ticket consolidation, wholesale travel services, and online operations.
It’s also on a significant profit growth trajectory, likely buoyed by the aforementioned shifting consumer trend towards experiences over material possessions.
In the six months ending 31 December 2023, HLO achieved an underlying (EBITDA) profit of $34 million, more than double the $15.6 million profit reported for the same period the prior year.
Among the highlights of the half-year for HLO was the completion of the merging of Express Travel Group (ETG) which it says upped efficiency by combining technologies and operations and a 30.3 per cent underlying EBITDA to revenue margin “with improving efficiencies and high productivity”.
Online travel booking unicorn Traveloka showcased impressive growth in its 2022 and 2023 financial years, demonstrating a return to levels not seen since the booming days of the pre-COVID era.
This is impressive growth, but no surprise considering its primary market is the rapidly growing SE Asian region.
Uniquely, Traveloka leverages machine learning and automation, positioning itself for a significant competitive advantage in navigating the APAC market.
But, critically, it also aims to improve the situations of its target geographies and partners.
For instance, a socio-economic impact study released by PwC revealed Traveloka is making significant social, environmental, and economic contributions to Indonesia, Malaysia, Singapore, Thailand, and Vietnam as it aspires to become the most sustainable technology company in SE Asia.
The study also highlighted Traveloka’s role in stimulating an increase in Indonesia’s Gross Value Added (GVA) by approximately $15.5 billion between 2019 and 2022.
In addition, Traveloka is committed to bridging gaps in local tourism and supporting smaller SMEs to reach a significantly larger market than would otherwise be possible.
For example, a tiny bed and breakfast in a lesser-known rural area may reach an international audience seeking authentic experiences by partnering with Traveloka.
These goals of aiding its customer base and the geographies it services will help the company remain sustainable for years.
The app has been downloaded more than 130 million times and Traveloka has a customer base of 40+ million monthly active users.
Established in 2016, Travello has emerged as a leading Australian-based youth online travel agency with a social networking brand. It currently has a user base exceeding 2 million across 180 countries, offering users access to over 20,000 tours, attractions and activities.
What makes Travello stand out in a very competitive environment is its focus on community. The social network function of the business has helped it stay top of mind and answer questions such as: if travel is such an infrequent purchase, how can travel companies engage the traveller between each purchase?
Travello has capitalised on a resurgence in leisure travel, catapulting its revenue a whopping seven times larger than its pre-COVID-19 levels.
This growth trajectory attracted significant investment, with Travello securing $10 million in Series B funding during the same year in a round led by the Queensland Investment Corporation, alongside participation from the Paspalis Innovation Investment Fund.
This puts them on the track to expand their operations and become a real challenger in the travel and tourism industry.
Get in while there’s recovery & growth opportunities
While the global travel and tourism sector may have jumped 23.2 per cent since 2022, this is still 4.1 per cent below the 2019 level – showing there is still space to grow.
The increasing range of travel technologies – making travel experiences easier, simpler, more convenient, and more personalised – is also likely to be a strong driver of this growth.
This offers a potentially lucrative opportunity for investors who get in now.
Traveloka was a client of Third Hemisphere at the time of publishing.
By Jeremy Liddle, Executive Director of tech & finance PR & investment agency, Third Hemisphere