Travel entrepreneur and startup funding is growing in the Middle East but more investment is needed, say industry experts at ATM 2024
The Voice of Chandigarh News:
Experts shone a spotlight on the Middle East’s travel investment ecosystem at Arabian Travel Market (ATM) 2024, which concludes today, Thursday 9 May at Dubai World Trade Centre (DWTC) until Thursday 9 May. Panellists speaking during the exhibition’s entrepreneurship summit said levels of industry funding are growing in the region but that more needs to be done to support travel startups.
The Middle East’s contribution to global travel revenues currently stands at approximately 5%, which is comparable to the proportion of international startup funding it is attracting, according to data from McKinsey & Company. While levels of investment have increased significantly in the wake of the global Covid-19 pandemic, speakers noted that funding for regional travel entrepreneurs is growing from a relatively low base.
Panellists participating in the Nurturing Travel and Tourism Entrepreneurship to Drive Economic Growth summit included Margaux Constantin, Partner at McKinsey & Company; Danny Cohanpour, CEO of Trove Tourism Development Advisors; Charaf El Mansouri, Co-Founder and CEO of Dharma; Mona Faraj, Co-Founder and CEO of ExploreTECH; and Amna Al Redha, Manager of AviationXLab, which is part of the Emirates Group Future Technology and Innovations team.
Danielle Curtis, Exhibition Director ME, Arabian Travel Market, said: “It is encouraging to hear that travel investment is increasing in the Middle East, but it’s clear that more can be done to nurture entrepreneurs and startups operating in the region. While panellists acknowledged that there are various challenges facing those looking for funding, there is also significant potential for growth in this space and plenty of room for disruption.”
Summit speakers noted that various hurdles must be overcome by travel and startup entrepreneurs seeking investment, such as perceived levels of risk and long wait times on returns. Nevertheless, panellists argued that companies with genuine value propositions are well-placed to identify and attract the right backers.
Participants also highlighted the growing importance of technologies such as artificial intelligence (AI), Web3 and cryptocurrency in securing financial backing. Although these elements represent secondary focuses for the majority of travel entrepreneurs, panel members emphasised the importance of incorporating the latest innovations in business strategies when pitching to investors.
Commenting on the need for a shift in mindset from funders, McKinsey’s Margaux Constantin said: “If I look at our clients who are interested in investing in travel and tourism in the Middle East, 90% come with the same three parameters for investment, which are asset-light, EBITDA-positive and minimum-ticket-size [companies]. The reality is that this intersection is incredibly thin, so investors are going after the same very small pool of companies. We need a change in expectations and interests from investors to fuel entrepreneurship in [the region’s travel] sector.”
The largest edition of ATM to date will close today following four days of impactful industry discussions and unrivalled networking opportunities across the MICE, leisure, luxury and corporate travel sectors. Today’s sessions will focus on the next generation of travel and tourism talent with the Educating Young Entrepreneurs: Building a Career in Travel session and the Network with Future Leaders event.
