Most of us have sat through hundreds — if not thousands — of startup pitches, attended hackathons, offered mentorships at various conferences. But Travel Tech Israel 2018 was different. While it surely had some of the aforementioned elements, its overall positioning was ultimately about showcasing the best of (and upcoming) Israeli’s travel tech companies, entrepreneurs and above all, the community. Below are some key observations about what makes the Israeli travel tech landscape unique and what it means for the travel, tourism and hospitality industry.
Size Doesn’t Always Matter: We often evaluate the potential of the travel industry either by the number of inbound or outbound visitors, its cumulative revenues, supply pipeline, etc. In that context, the Israeli travel market is ways smaller than most markets. Yet, its ability to serve the global travel industry through technology solutions and services is unparalleled. Almost every company — startup or otherwise — I met has a product, service (or a vision at least) which could be adopted globally.
Focus: In contrast to several digital travel retail companies which are flying on sky-high valuations, most Israeli companies we came across had a B2B focus. Building a consumer-facing company is an uphill task. Branding, marketing, incentivizing (BMI) are getting increasingly complex and expensive. While BMI still plays a part in the B2B universe, it is arguably less intense. Moreover, the B2B positioning also opens up doors to well-established companies, which are challenged with operational or technical bottlenecks, including talent crunch.
What is “Travel tech”?: This one’s courtesy Timothy Hughes, who rightfully questioned the meaning of travel tech? Most of the travel companies’ requirements could be solved by horizontal tech solutions such as online traffic monetization, retention, customer engagement, payments and then some. Still specializing or understanding the travel industry is a must if one is applying horizontal solutions to our industry, or beginning from scratch.
RIP Incubators and Accelerators, Hello “Innovation Labs”: We are possibly at an inflection point of incubators and accelerators. While they no doubt serve a purpose in grooming upcoming ideas and talents, they are no longer unique and commoditized. On the flip side, there are dozens of companies, particularly MNCs, which have launched “innovation labs” in Israel. Companies such as Citibank, IBM, Samsung, El Al Airlines, Booking.com, Alibaba, Carlson Wagonlit, and then some have dedicated R&D centers in Israel to foster innovation. Surely, there’s a fair degree of attention and interest for solutions that could benefit these corporates internally, but they aren’t averse to extend those beyond their organization, and especially to their partner or client networks. This again, is music to B2B startups.
Community: Saving the best for last. Community is at the core of the present and future success of the Israeli travel tech ecosystem. Israel’s size is an undeniably an advantage in bringing the community closer, and I observed limited to no silos. This is the single-most important takeaway of the trip. Almost everybody who has anything to do with travel technology is connected on a single platform: WhatsApp. Imagine hundreds of product managers, developers, coders, entrepreneurs all sharing ideas, making references, gaining feedback, etc. channeling through a single, ubiquitous platform. This not only brings the community closer but makes it easier than ever to ideate, collaborate and execute for the greater goal, i.e., making Israel a top source of travel-industry focused technologies and solutions.
- Lean and agile teams are working on promising ideas with global ambitions
- B2B is the way to go for many Israeli travel startups.
- Horizontal solutions emerging from Israel continue to strike gold in travel. But understanding the nuts and bolts of the travel industry is imperative for product refinement and broader adoption.
- More and more corporations are opening doors for startups through “innovation centers”. These offer access to funds, infrastructure, mentors, and partner networks for trials.
- Community drives industry engagement, collaboration and the competitive spirit.
[Thank you Rom Hendler, Chen Amishay, the Innovel team, startups and everybody we met and interacted with at Travel Tech Israel 2018!]
Post By: Chetan Kapoor
Co-founder, videc.co | Travel industry market analyst