$10 million funding boost for travel start-up
Travel start-up Travello, who create travel experiences for young people, has raised $10 million in funding. The funds, raised from a Series B funding round led by Queensland Investment Corporation (QIC) augmented by extra investment from Paspalis Innovation Investment Fund, will be used to leverage the big increase in demand for travel experiences among Millennials now the world is opening up again after the Covid-19 pandemic.
This sector of the market is the one of the most lucrative for Aussie tourism businesses – although young travellers only accounted for 25 per cent of visitor arrivals in 2019, they contributed 40 per cent of spending by all visitors.
The company, one of the biggest online travel brands in Australia, will hope the money further fuels the rapid growth it has generated through domestic travel since Australia’s state and territory borders re-opened and the growing influx of international travelers to Australia – Travello took bookings from customers from over 60 countries in September.
“The ‘travel experiencers’ vertical is the biggest opportunity in travel and will see significant growth in both the near and long term,” Ryan Hanly, Co-founder and CEO of Travello, said. “The sector is still very young, conservatively 10-15 years behind flights and accommodation in every aspect. It’s a really immature market and that’s what presents such a great opportunity. For context, around 75 per cent of flights and accommodation are booked online, but only 25 per cent of tours and activities. That’s a very exciting growth opportunity.
“One of our biggest competitors is the pamphlet wall in the lobby or a hotel, so Travello’s digital first play uniquely positions us to capture the growth potential this market offers. We are currently growing at 25 per cent monthly and have recorded over 1000 per cent growth in bookings,” Hanly added. “Many youth travel brands, including the iconic STA and Student Flights, did not survive Covid, so the lack of competitors presents a unique opportunity for Travello to capture market share.”
Having acquired Backpacker Deals last year, Hanly said that this new funding will the company to look at similar acquisitions and accelerate their growth and expansion into both new regions and categories, such outbound multi-day tours.
“Pre-Covid only five-to-10 per cent of our sales came from domestic travellers, now we are seven times bigger than what we were pre-Covid, almost entirely from domestic travellers,” Mark Cantoni, Travello’s COO and Co-Founder, said. “So, the fact that we have been able to capture a domestic audience has been fantastic, but we are really excited to get internationals back as they stay longer and spend more, especially on tours and activities.”
The story is originally published on Inside Small Business.