The UK traveltech sector is expected to play a key role in supporting the post-Covid recovery of the nation’s tourism industry, a new report claims.
According to the Traveltech Report 2021, compiled by Tech Nation and Traveltech for Scotland, Britain boasts a thriving startup scene and strong investment in this particular industry subsector, with more than £1 billion raised by UK traveltech firms over the past three years.
Between 2015 and 2019, UK traveltech companies saw equity investment more than double from £190m to £504m, and the country commands a strong pipeline of high-growth potential firms operating in the sector.
Notably, despite the challenges of the coronavirus pandemic, investor appetite for the sector proved resilient last year, with UK firms outperforming international counterparts and raising more than £358m.
In all, there were 1,044 deals completed globally in 2019 with $10.8bn invested. This fell to £5.2bn in 2020, marking a 51% global decrease. However, investment in the UK sector dropped by only 29%, the report shows.
As Britain’s travel and tourism sector continues to grapple with the economic impact of the pandemic, the traveltech industry is faced with a prime opportunity to help support recovery and facilitate future growth, according to Joshua Ryan-Saha, Director of Traveltech for Scotland.
He said: “The findings of this report are hugely encouraging and confirm that traveltech holds the key to a thriving future for travel, tourism and hospitality in Scotland and the UK.
“Traveltech for Scotland is here to maximise that opportunity and help businesses big and small, established and new, to realise their potential.”
The Traveltech for Scotland cluster organisation launched in 2020 with the aim of making Scotland one of Europe’s leading traveltech hubs.
Over the last year, the cluster organisation has supported traveltech companies as they explored ways to respond to industry challenges caused by the pandemic and the need to meet net-zero targets.
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Ivan McKee MSP, Scottish Government Minister for Business, Trade, Tourism and Enterprise, said the report highlights Scotland’s potential to forge a reputation as a European leader in traveltech innovation.
He commented: “With UK equity investment in this growing sector topping £350m in 2020, amidst the greatest crisis the travel sector has ever faced, it is clear that traveltech will play a vital role as Scotland recovers from the challenges of the Covid-19 pandemic and embraces the challenge of driving truly sustainable tourism.
“The Scottish Government will continue to encourage and enable the growth of the traveltech sector in Scotland, and the Traveltech Report 2021 will help us better understand this innovative fast-growing space and support our entrepreneurs and businesses.”
The 2021 Traveltech Report forms the first stage of research into the fast-growing traveltech space in Scotland. According to Traveltech for Scotland, the next stage will examine the industry’s potential impact on the broader Scottish economy.
Dr George Windsor, Head of Insights at Tech Nation, said: “It’s clear that traveltech is a nascent and rapidly growing part of the UK’s tech economy.
“With 50% of traveltech companies at seed stage, we look forward to supporting and charting the growth of these game changing firms over years to come.”