Travel Tech’s New Frontier

Germany has Europe’s largest and most competitive travel sector with a high outbound share. Travel technology start-ups are setting up camp around the country, while Berlin boasts its first travel tech unicorn.

March 2020

Germany ranked third in the 2019 World Economic Forum’s Travel & Tourism (T&T) Competitiveness Index, which measures factors and policies that enable the sustainable development
of the sector in each country. Underscoring the findings were Germany’s large domestic T&T market, strong overall enabling environment, infrastructure and natural and ­cultural resources. The country’s robust economy
has created a major domestic market that in turn has resulted in the largest T&T GDP in Europe.

With a booking volume of EUR 58.8 billion in 2017, Germany is the largest source market for travel in Europe, says Dirk Rogl, deputy director of the German government’s Tourism Expertise Center. “It’s not only Germany’s size and central location within Europe that argue for investment: Our sales and booking technologies are unique in the world,” Rogl adds.

Germany plays a significant role in the European tourism market with a high outgoing share – Germans like to travel abroad. Nonetheless, the German online travel market is below the European average, partly due to the traditional strength of tour operators and traditional offline travel agencies in the country, according to travel research company Phocuswright. There are, however, numerous opportunities for growth.

A colorful facade in Cape Town, South Africa, a popular destination for Germans who love to travel abroad. Travel tech is more than just bookings. It’s about personalization, online marketing and increasingly new forms of dialogue such as chat and voice control. © alexeys

An emerging new market

At 42 percent, the share of online travel in Germany in 2017 was still below the European average, but roughly in line with the booming Indian and Chinese markets, Rogl notes. “It is foreseeable that the share of online bookings will continue to increase. In addition, travel agencies and call centers use modern booking systems and by no means book offline in the classic sense.” As Markus Feigelbinder, cofounder and COO of Munich travel tech firm Fineway, put it to news portal Munich Startup: “In five years, we will have reached the point where the instant trip planning we offer will be the norm and a completely new market will have emerged.”

Travel tech is not just about bookings, Rogl stresses. “It’s much more about personalization, online marketing and, increasingly, about new forms of dialogue such as chat and voice control,” he says. “Such technologies are already in use in Germany and in high demand.”

The Indian entrepreneur Naren Shaam Markets Germany 2/17, page 8 is helping meet that demand. He founded Berlin-based GoEuro in 2013 to help tackle the problem of Europe’s fragmented transport infrastructure. The online platform allows users to find the fastest and cheapest travel options by train, bus and plane to thousands of cities, towns and villages across Europe. In 2019, the company changed its name to Omio to reflect its global ambitions.

The Munich travel technology company Fineway offers instant trip planning. After answering 10 questions, you receive your individual, directly bookable travel offer. © Fineway

Omio’s journey to success

“The transport system across the continent is impressive in many ways, but with thousands of ticket prices and options, and multiple providers and languages, it can be incredibly difficult to plan travel and book tickets,” says Shaam. “To develop a solution, I knew I would have to be based in Europe. Berlin, with its burgeoning tech scene, was the right place. It’s great for attracting talent, is a more affordable city than some other European tech hubs and is also well placed from a travel perspective.”

Omio has become one of Europe’s largest travel booking platforms. What’s more, it’s a tech unicorn. Available in 21 languages, it has more than 27 million monthly users and an extensive inventory of mobile ticketing.

Travel tech is attracting major funding from international investors, Shaam notes. “Our investment comes from the U.S. and Asia as well as Europe, reflecting the interest and recognition German travel tech is getting outside of the continent.” Last year, the company raised EUR 136 million in one of Germany’s largest-ever investment rounds, doubling its total capital raised. Swedish investment firm Kinnevik AB and Singapore-based Temasek led the round, with participation from China’s Hillhouse Capital.

Facts & Figures

299bn

Estimated value of the European travel market by 2020 as online bookings continue to grow

Sources: Phocuswright study “Tourism in Germany 2030”; Federal Statistical Office