Considerations When Investing At The Intersection Of Travel And Tech
By Dana Dunne, CEO of eDreams ODIGEO.
As we navigate 2025, the investment landscape is evolving amidst shifting global dynamics. In this context of continuous change, investors often prioritize sectors that combine future potential with a history of adaptability and sustained growth.
The travel sector is one industry that fits this profile, as it possesses a multi-decade track record of successfully navigating global uncertainty. Alongside the resilience demonstrated by travel, technology, particularly AI, remains an undeniable force reshaping the industry. This intersection—established sector strength meeting accelerating technological innovation—may present what some investors see as compelling opportunities ahead for the rest of the year.
In my decade-long tenure as CEO of an online travel company, we have shifted the company from a transactional model to a technology-led, subscription business with a focus on using AI. And as a publicly traded company, we work with our global investors daily. This experience has shown me why investors are often drawn to the travel sector—and what they need to keep in mind to approach investments in this industry wisely.
The Endurance And Appeal Of The Travel Sector
The investment case for the travel sector is built upon its resilience. Since 1980, the expansion of global air passenger levels has outpaced global GDP growth, according to World Bank Group data. This outperformance held firm through successive global disruptions. Major recessions, geopolitical conflicts, sharp shocks such as 9/11 and energy crises have all failed to derail the sector’s long-term growth trend. Aside from the pandemic anomaly, the World Bank data also showed that only three exceptions to annual passenger growth occurred post-1980. One of these brief downturns occurred amidst the Gulf War and spiking oil prices in the early 1990s, though the dip was shallow, registering below a 1% decline from 1992 to 1993. This performance through decades of varied global conditions demonstrates the sector’s adaptability.
This strength is not coincidental; it is rooted in the uniqueness of travel from a consumer point of view. Travel possesses the ability to forge some of our most powerful and lasting memories. Experiences such as the exhilaration of standing on a mountain peak, the sensory delight of walking along a sandy beach or the intellectual stimulation of immersing oneself in diverse cultural and historical city centers can offer profound personal value. These core experiential elements of travel cannot be substituted by digital alternatives or other consumer goods.
This inherent value explains the willingness many consumers have demonstrated in the past to prioritize travel expenditures over other discretionary spending categories.
The Expansion Of Online Travel
Following its rebound post-pandemic, the travel market continues on this expansionary trajectory. Projections from Phocuswright Research said global travel bookings could reach $1.72 trillion in 2025, highlighting significant ongoing growth potential.
This growth is increasingly digital. The online travel sector is expanding, with Phocuswright’s estimates also suggesting “nearly 65% of global travel gross bookings will be made online” by next year, potentially reaching $1.2 trillion by 2026. From my observations, factors driving this include deeper penetration of smart devices, digitalization and improvements in high-speed internet access.
The travel sector also has good industry dynamics, and I’ve seen ample microtrends buoying the market, such as personalization or experiential travel (e.g., travel for concerts and sporting events).
In my view, companies that can balance innovation with authenticity, deliver value, adapt to the financial realities while exceeding expectations and create experiences that resonate with digital natives will thrive in 2025.
The Role Of AI—And Why Investors Should Exercise Caution
Navigating an environment of global economic adjustments requires investors to look for enduring strengths and proven adaptability. The historical trajectory of travel, combined with technology like AI, can offer a foundation for long-term value creation. However, realizing this potential requires looking deeper than the sector average.
I believe the companies with an advantage in this landscape are those that possess truly differentiated value propositions and are deeply rooted in technology. Investing at the intersection of tech and travel is more nuanced. It requires investors to identify whether innovators using AI have strategies that position them to navigate the present, actively shape the future of travel and deliver sustainable value through market cycles.
While the promise of AI in travel tech might be appealing, investors face the risk of being swayed by the term when it’s merely a buzzword, rather than a genuine driver of value. I’ve seen some companies claim AI leadership while relying on generic solutions that offer no distinct advantage over competitors or truly propel the business forward.
For discerning investors, it’s crucial to look beyond these claims. When exploring potential investments, consider whether AI is being used as an engine for profitability and sustainable customer relationships. The true leaders are those who successfully use technology to acquire and retain valuable, long-term customers; generate consistent revenue streams; and demonstrate that their technology directly contributes to the bottom line and reinforces their competitive advantage.
Additional Considerations For Investing Wisely
Furthermore, resilience in the face of market fluctuations is paramount. Investors should consider whether the company has a loyal customer base, as well as whether it spans various geographies and demographics. This can help mitigate risks associated with regional economic shifts or changes in specific traveler segments.
Beyond diversification, look for indicators of operational robustness and adaptability—the capacity to navigate evolving consumer demands, regulatory landscapes or unforeseen global events.
My time in the travel space has shown me that companies combining cutting-edge technological capabilities with fundamentally sound and resilient business models are the ones built to thrive across the entire market cycle.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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