Over the past couple of years, the hospitality industry has developed a new trend â€" investments in travel startups, while at first it might have been surprising to see large hotel chains buy shares in companies that seemed to provide rivalry services, today hoteliers are lining up to find a good business opportunity and not only invest in it, but often to acquire it.
And actually, it hasnâ€™t only been hotels, as Online Travel Agencies are also fully engaged in the startup investment race.
The chain that could be called the front-runner of startup backing is AccorHotels, with the French group especially dominating the luxury private rental market. Over a year ago AccorHotels acquired just under half of the shares of a company called Squarebreak. Then, they moved on to acquire Onefinestay for, reportedly, $170 million.
The London-based startup, providing high-end homes with service, remained an independent company, and after the acquisition, AccorHotels invested another $70 million in it. Interestingly, another hotel chain â€" Hyatt â€" was a stakeholder in Onefinestay before AccorHotels made their move. Just last month, the French chain made another acquisition â€" this time in Travel Keys â€" an elite travel broker with a collection of over 5,000 hand-picked, luxurious apartments and villas spread all across the world. The company was founded in 1991 and was a pioneer in the industry.
After those three acquisitions, AccorHotels became a big player in this luxury rental market. Combined, Squarebreak, Onefinestay and Travel Keys offer approximately 8,500 villas and apartments for short-term rent.
Obviously, AccorHotels isnâ€™t the only chain to invest in startups. Wyndham Hotels â€" the owner of brands like Ramada and Travelodge â€" is a stake-owner in an English startup called LoveHomeSwap, a subscription-based service which lets homeowners swap their properties. Marriott, on the other hand, launched its own startup-accelerator looking for ways to improve guestsâ€™ experience.
Then there are the Online Travel Agencies. Trivago, since a year ago, has been the owner of Base7booking â€" a Swiss startup specializing in hotel technology, namely cloud-based property management systems.
In December 2015, Expedia made an investment in Alice â€" a startup developing mobile technology for hotels, but that wasnâ€™t considered a big move after their acquisition of Homeaway, when they reportedly spent nearly $4 billion!
One of the latest big acquisitions was Pricelineâ€™s purchase of Momondo for $550 million. Speaking about Priceline â€" itâ€™s worth mentioning Booking.comâ€™s launch of their own startup accelerator in February. The dreaded leader of the OTA market aims to invest in eco-friendly startups.
Having its own startup accelerators lets companies be more dominant and influential when it comes to the future of those startups. Itâ€™s usually more profitable, and definitely less risky than simply investing in a developing company. Startup accelerator programs launched by travel industry brands is a trend within a trend, that will be interesting to observe in the nearest future.
Catching up with the trend, some startups from the hospitality industry are openly offering investment slots. Take Bidroom.com for example. The commission-free booking platform informed via LinkedIn that it has already reached tentative agreements with some hoteliers regarding the sale of equity shares. The executives of the startup state that up to 10 slots are still available.
The trend of hotel chains and OTAs investing in startups may have gained momentum in 2015, but 2017 seems to be the year it will break into full stride. No wonder â€" becoming a stake-holder in a young, developing company that has a good, disruptive business model can prove to be a tremendous business decision. Think about Airbnb, and all those businessmen who missed the opportunity to invest in it.
Bart Bielecki,Â PR Manager
+31 (0)20 808 1338