Experts turned the spotlight on the Middle East’s travel investment ecosystem at the entrepreneurship summit of Arabian Travel Market (ATM) 2024, in Dubai, and said that despite growth in industry funding, travel startups need greater support.

Panellists participating in the ‘Nurturing Travel and Tourism Entrepreneurship to Drive Economic Growth’ summit noted, while levels of investment have increased significantly in the wake of the global Covid-19 pandemic, funding for regional travel entrepreneurs is growing from a relatively low base.

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.

Panellists at the 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.

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 conclude on May 9 following four days of impactful industry discussions and networking opportunities across the MICE, leisure, luxury and corporate travel sectors. – TradeArabia News Service