There’s a bright spot in the dismal travel and tourism industry.
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Hostaway, a vacation rental management software startup, announced on Wednesday it raised $175 million in funding. The round was led by PSG Equity.
The company, which is based in Canada and Finland, is made for property managers to manage bookings, guests and vacancies across different platforms like Airbnb, Vrbo and Booking.com. Through the platform, property managers can go through inquiries, manage guest requests and even automate messages to potential customers using ChatGPT.
Hostaway was started in 2015 and has grown to host more than 100,000 short-term rental and vacation properties across 100 countries. The company plans on using the fresh funding to expand into different countries and increase hiring.
“We believe the company has a significant opportunity to lead this industry as it continues to scale its integrated platform, expand globally and help its customers meet the growing demand in the short-term rental market,” said Edward Hughes, Managing Director at PSG, in a statement.
A turbulent time for travel
Hostaway’s raise is pretty promising. As of now, the startup’s $175 million is the second-largest funding round in the industry this year, per Crunchbase data. Besides a $366 million corporate round from an actual airline, ITA Airways, no company has come close to cracking $100 million so far.
That tracks. The travel industry is still reeling from pandemic-era social distancing protocols. While people are eagerly traveling (pretty much everyone I know is in Europe right now), stricter sanitation protocols mean property managers have to spend more time and labor cleaning, and rooms stay vacant longer.
The industry saw a steady increase in startup funding between 2016 and 2019, which dramatically dropped in 2020 once the pandemic hit the United States. After bouncing back in 2021 (like pretty much all industries did), the travel industry garnered only around $5.9 billion globally in 2022.
The travel industry is a tricky one to break into, and many startups have failed despite promising interesting or unique traveling experiences.
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