By Renny Chong, Investor Relations Director
Dear Friends of Velocity,
While many eager travel bugs are busy making long-awaited travel plans, did you know there is a group of savvy investors who have been capitalising on innovations happening in the Travel and Hospitality sector?
Taking a step back into memory lane, the “golden age of travel”
Only about 50 years ago if you wanted to book a flight, it would have taken 90 minutes to manually complete the process, and your reservation would have cost more than it does today in real terms. Once on the plane, beyond the in-flight magazine, entertainment was practically non-existent!
This was life in the “golden age of travel”, which by modern day standards is hard to comprehend.[i]
The new technology and travel revolution
Increasingly, technological advances are changing Travel and Hospitality in today’s digital age, making it more efficient, interactive, convenient, and safer to travel than ever before.
As Covid-19 disrupted normal travel in 2020, one of the first ideas to use technology to relaunch the Travel and Hospitality sector was the introduction of digital Covid-19 travel passports. Interest in using technology has grown ever since then, with mobile applications that provide real-time notifications and alerts, as well as contactless payments, which were among the most popular innovations, according to a September 2020 poll by Statista.[ii]
Do you want to know what’s in store for the sector in the near future?
My personal experience: Some very exciting innovations in Southeast Asia
At Velocity Ventures, we are a venture capital firm powering innovations in the Travel and Hospitality industry by investing in visionary companies. Our mission is to help Travel and Hospitality companies in Southeast Asia to scale, and ride on the Covid recovery of the sector.
The Travel and Hospitality sector is a fundamental pillar for many Southeast Asian countries and forms the bedrock for many lives and livelihoods that depend on it. We estimate pre-Covid, this contributed to around 12% of GDP and 13% of total employment across the Southeast Asia region.
As part of our community, we meet with a significant number of start-ups every year and also work closely with many other industry players, including government bodies and accelerators (e.g. Singapore Tourism Board, MDEC), in the Travel and Hospitality sector in Southeast Asia to build, nurture and contribute to the startup ecosystem.
Leading our Investor Relations effort, my role is to understand the value proposition that our portfolio companies bring and connect them with like-minded investors who are interested in capitalising on these game-changing innovations in the Travel and Hospitality industry. I have had the opportunity to interact with many exciting businesses and I would like to share a couple of interesting themes that I have come across:
- Artificial intelligence and big data | Empowering businesses to optimise decision making
Many travel organisations are constantly cracking their brains to be one step ahead of the ever-changing macro environment, as well as figure out what is in the mind of their potential customers. For example, which destination are they most likely to go for their next holiday? How much are they willing to pay for the trip? How do I mitigate the risks to my organisation should a new Covid-19 variant arise?
Leveraging AI and big data, we now have answers to questions like these and this can help organisations like airports, airlines, online travel agents/booking platforms and retailers better plan their resources, inventories, flight routes, pricing strategy etc.
In essence, optimising the when/where/how of deploying their assets efficiently and removing the guesswork out of the equation.
- Sustainable Tourism | Carbon offsets to mitigate climate change and environmental damage
With the resurgence of Travel and Hospitality, climate change and environmental damage is a topic that is very close to our hearts and there is no denying that the pollution arising from areas such as transportation (e.g. planes, cars) and retail (e.g. F&B, fast fashion) will increase as we get back to pre-pandemic levels of activity.
While there is no panacea to completely stop pollution altogether, consumers and organisations can contribute by making more sustainable choices around reducing and offsetting our carbon footprint to lower our impact on the environment. Likewise, deliberate decisions such as purchasing a carbon offset in projects that are credibly sourced and verifiable, easily tracked and adhere to global standards (e.g. UN Sustainable Development Goals) will go a long way for sustainability and environmental efforts.
- Sharing economy | Repurposing unused mobile data
I hardly hit the data limits on my mobile phone plan and if you are like me, instead of letting it go to waste, wouldn’t it be great if you could use it to offset your next phone bill, get e-vouchers at your favourite merchants, or even gift/sell it to others?
The possibilities are limitless, and it is great to see how innovative and versatile we can be to repurpose existing structures to new ones to meet our changing lifestyle needs.
How you can be part of this technology and travel revolution
If all this makes you excited and you would like to find out more about what we do, as well as how you could potentially invest and capitalise on the transformation in the Travel and Hospitality industry, do get in touch with me or any of our friendly team members at Velocity as we’d love to chat!
Looking ahead, there is no denying that the light at the end of the tunnel is getting brighter as the Covid-recovery of the Travel and Hospitality industry picks up steam.
Who knows? In the near future, we might just bump into each other soon at a hotel, a restaurant, at the airport or on a plane somewhere.
Till then, happy travels and looking forward to meeting you!
[i] The new tourism trend – How digitalisation is revolutionising the travel industry, BBC Travel
[ii] Impact of technology on travel and tourism – statistics & facts, Statista