At Plug and Play, we connect the largest corporations to the world's best startups through industry-focused programs in Silicon Valley and around the world. We’re in a unique position to see what early-stage disruptors are focused on, and how established firms are responding through internal innovation and external investments.
And that' why we have created a collection of articles that highlight the emerging trends in travel and opportunities where corporates and startups are collaboratively pushing the envelope to create the next wave of innovation and growth.
Big Corporates Are Great at Failing at Innovation
Travel and hospitality account for 10% of employment worldwide, and it is estimated that the sector contributed $8 TRILLION to the global economy in 2017. Not only that, according to PhocusWright, the travel tech sector has attracted a large amount of venture capital funding, raising over $19B+ since 2008, excluding ride-hailing and bike sharing companies. It is a large, fast-growing industry tied directly to global consumption growth, and with populations increasing and incomes increasing, the demand for travel products and services will only increase.
But there’s a problem. With all the startups hoping to IPO or get acquired, and all the big corporate travel companies looking to snag the hottest new company before it gets big (or becomes a competitor), there’s a surprisingly high failure rate when it comes to corporate innovation. It’s hard for established players to identify which startups will succeed and which will fail, not to mention figuring out how to innovate inside their existing models.
Consider the Marriott TestBed Incubator, which lasted for only one year and then was replaced by The Travel Experience Incubator, costing Marriott a fortune generating little innovation buzz. Or the Disney Accelerator, which partnered with Techstars in its early days, only enrolled 7 companies for its 2018 batch and saw very little press coverage for any of its activities. The need for innovation within big companies is clear, but few corporate travel accelerators have come up with the right formula to drive real innovation.
The travel and hospitality industry as a whole has taken a lot of criticism for its inability to drive innovation from within - Lio Chen, Plug and Play Travel
The startup disruptors need help too. While innovative products and solutions may come naturally to small startups, scaling up in an established market is challenging. More and more startups now seek opportunities to partner with incubators that don’t just help them refine their business plans but actually connect them with corporate customers and partners. “The travel and hospitality industry as a whole has taken a lot of criticism for its inability to drive innovation from within,” said Lio Chen, Managing Director of Plug and Play Travel. “On the other hand, with the exception of a few homeruns, travel startups had not received much attention from VC investors due to lackluster returns.”
Innovation in travel is happening. Don’t be left behind.
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