A group of startups is setting its sights on the travel activities industry, which is the fastest growing segment in the tourism market.
The startups are targeting millennials around the world, offering services such as amusement park tickets, cooking classes, walking tours and more, focusing mainly on the growing Asian travel market. In fact, travel industry research company Phocuswright has predicted that turnover in the tours and activities market would reach $120 billion this year, with more than a third spent with Asian suppliers.
“Asian inter-regional demand itself is as sizeable as the U.S. or Europe, then you add on the growth,” said Eric Gnock Fah, co-founder of Klook, according to The Financial Times. “In five years’ time I think Asia as a whole will be bigger than the U.S. and Europe. That’s why I think investors in general are optimistic about this sector.”
Founded in 2014, Klook received a $225 million cash investment from SoftBank earlier this month, bringing its total raise to $520 million and its valuation to over $1 billion. The company currently offers more than 100,000 activities in over 270 cities.
“Tour and attraction companies are going to become a travel essential,” said Neel Laungani, head of telecoms, media and technology coverage in Asia Pacific for Deutsche Bank. “These young companies have become full-service platforms, from recommending the best attractions in a city to processing the booking and generating an electronic ticket instantly. They have figured out that if you can engage on a much more regular basis with customers it increases the engagement and ultimately allows these companies to cater to and transact more frequently with that customer.”
In addition to Klook, Berlin-based GetYourGuide has raised $170 million from investors including Battery Ventures and private equity group KKR, with a goal of expanding in the U.S.
“GetYourGuide was the first digital company to start bringing a fragmented, decentralized, analogue global market online,” noted Chief Executive Johannes Reck.