Traveltech Is Freeing Travelers From Headaches and Agents
JNS.org – Traveltech was the harbinger of internet-age disruption. Travel agents were the first to feel its effects, when, at the dawn of the previous decade, people were suddenly able to book their own flights and hotels online. The revolution the tourism industry underwent is old news, but there is now a new, more specific revolution in the works, which has to do with the business sector. Business travel is a very lucrative sector, accounting for $1.5 trillion out of the $8.8 trillion turnover the entire tourism industry sees, according to The World Travel & Tourism Council.
At times, traveltech interfaces with other industries. San Francisco-based Brex Inc., for example, is straddling the line between fintech and traveltech, equipping startup executives with a credit card that offers special benefits to frequent travelers. Banks, especially American banks, are hardly ever keen to give entrepreneurs with little-to-no business history much-needed credit but Brex issues its cards to any company that has at least $100,000 in the bank. Payments made using the card are translated to points that can be exchanged for rewards from airlines, restaurants, Airbnb, and other travel-related services.
Founded in 2017 by two entrepreneurs who were not yet in their thirties, Brex has raised over $300 million to date and is currently valued at $2.6 billion. Even in the current money-flushed VC climate, Brex appears to be unique.
Consumer traveltech is also booming, with technologies becoming more and more advanced and focused on specific niches. One such example is Tel Aviv and Belgium-based company ReFundit Ltd., co-founded in 2017 by CEO Ziv Tirosh and Waze co-founder Uri Levin.
ReFundit helps travelers submit refund requests for value-added tax (VAT) placed on purchases they made at their destinations. According to company statements, 90% of refunds tourists visiting Europe are eligible for are never made, as tourists are often deterred by the bureaucracy or make some kind of error on the sometimes-hard-to-understand forms. ReFundit’s app lets users upload their receipts, passport copies, and boarding passes, sending them directly to the relevant tax agency. Refundit already has an operating pilot in Belgium and announced a pilot with the Slovakian government last year.
While the traveltech industry’s prosperity is not surprising, travel—both personal and corporate—is one of the most vulnerable sectors and is easily affected by even the slightest shifts in the economy. A slowdown in growth can undermine the entire travel industry, and recession can send it crumbling down, taking all of these successful startups with it. Assuming we will not be witnessing such turmoil any time soon, we are expected to see Airbnb’s initial public offering aiming for a valuation of over $38 billion next year. If this will be even close to the final number, traveltech will undoubtedly get another huge boost forward.