Imagine landing a jet on Hamilton Island in Queensland, Australia and then going for a swim with tropical fish in the Great Barrier Reef or imagine taking in the serene enthralling view from the top of Mt. Everest. Or Imagine (let’s make it still wilder!) taking in the panoramic views of the Martian surface and walking on its dusty red surface. All this while sitting in the comforts of your home! Well, it’s slowly becoming a reality through Virtual Tourism- the use of Virtual Reality which is disrupting the Travel and Tourism space.

I have always been fascinated by the wide-ranging and impressive applications of AI/AR/VR and the fourth wave of industrial revolution heralded by the emerging tech we are currently in. In fact, I resonate with Mark Cuban when he says that the first trillionaire could well be an AI entrepreneur or that robots are coming for the job faster than you think.

But before we dive in further, let’s differentiate between AR and VR the two often used and most confused terms. According to LiveScience, AR is the result of using technology to superimpose information- sounds, images, and text- on the world we see (think Pokemon Go). On the other hand, VR is the use of computer technology to create a simulated environment. While the current environment biases the scales towards AR with its varied application in military, medical, navigation, gaming, etc. I feel that the true long-term potential possessed by VR will be higher and more compelling simply because of the possibility to transport the person to another dimension while being situated anywhere (Ready Player One style!). Recently Marc Andreessen (co-founder of Andreessen Horowitz) also mentioned in the a16z podcast that he feels VR will be 1,000 times bigger than AR.

Tourism is one of the biggest industries in the world. Blend it with VR and you have an attractive market creating a breeding ground full of tantalizing opportunities for VC’s and other early-stage investors in the near future. In fact, in a recent study, it was found that 80% of people who experienced virtual reality to explore a destination felt “transported to another world”. According to Shaun Collins, CEO of CCS Insight, “VR is going to change the way both many of the things we do today and some new and important areas are transformed like tourism”.

Use of VR in tourism and travel industry is in fact rapidly evolving as more and more players get to know about its potential and the possibility to deploy it as a marketing tool or help consumers choose on their next vacation place. According to a recent survey, multiple startups and executives in the travel industry are bullish on the use of digital tech (AI, chatbots, AR/VR, the blockchain, etc.) to disrupt this field. In the travel and hospitality space VR is being intelligently used to provide a visceral feeling to the guests before booking the accommodation. An example is a tie-up between Thomas Cook and Samsung Gear VR which allows clients to view their locations worldwide. Another is Thomas Cook’s ‘Try Before you Fly’ campaign which helped created a 190% uplift in bookings as it allowed customers to fly in a helicopter over the Manhattan skyline, go scuba diving in the Red Sea, and visit the Egyptian pyramids from one of their stores. Dubai the leader in marketing itself for tourism has also created fascinating virtual tours and uses it to entice prospective tourists (not that they need any convincing though!). Burj Khalifa and HTC have partnered to create Mission 828. It’s a VR experience where you can jump from the top of the world’s tallest tower (going one up on Tom Cruise!). Australia is also not far behind. Their official Youtube channel provides enthralling aquatic and coastal 360 experiences of the country’s top destinations and attractions (snorkel at Great Barrier Reef, swim with dolphins at Glenelg, surf on the Gold Coast in Queensland and much more!)

So let’s move to my favorite section on the most promising travel startups emerging and VC trends being observed in this space. Internet-era travel companies are attracting VC interest and funding when we observe the stats. In 2017 travel tech attracted $5.3bn of VC capital across 350 deals. This was put in sectors which include travel and tourism apps, marketplace for ‘experiences’, travel & hospitality tech platforms, and short-term rental startups. Projections estimate the online travel market to grow to $820bn (whoa!) by 2020 and VC’s want to make sure that they don’t miss the superstars among the newer ones. Some of the most active travel tech VC’s included US-based 500 Startups (16 deals), Germany-based Founders Capital (11 deals), Spain-based Caixa Capital (7 deals). If we look at the VR space, Goldman Sachs predicts the VR market to be worth $80bn by 2025 (even pushing up to $180bn in a bullish scenario). In 2017 funding in AR/VR market reached a peak as $2bn was invested which set a new record globally. There appears to have been a ‘moratorium’ though in 2018 as VC’s paused to evaluate the market and get a realistic sense of the market opportunities against the consistently ‘lackluster’ consumer demand.

Some prominent startups in the space include realities.io which has developed a platform to transport people to historic sites and places off-limits to the general public, such as France’s Grotte de la Verpilliere, an archaeological site where humans and Neanderthals lived for 50,000 years. The company based in Berlin, Germany creates interesting (and mesmerizing!) places around the globe in VR explorable in photorealistic quality. Another called Jaunt VR produces 360-degree films, shows, documentaries, tours on their app all in VR. Users get to choose from up to 20 different channels. Pick among the Redwood National Park, San Francisco Giants or uncover the secrets of Machu Picchu. Then there is YouVisit which is an online virtual tourism platform that allows travel companies to create and share 360-degree photos and VR tours with 1,000+ pieces of interactive VR experiences. Ascape is another VR app for travel which sorts out all the content for you. Content is organized by countries (Australia, North Korea), activities (Rio Carnival), spiritual journeys, underwater shoots, guided tours and also from tourism giants such as Thomas Cook, JetBlue, etc.

As the world wakes up to the potential of VR and its varied applications in different industries (retail, travel, media and entertainment, real estate, automotive, etc.) there is a similar trend being witnessed in India. The time when VR was relegated for only a gaming geek is slowly ending with tourism sector particularly experimenting and testing out its fascinating potential.

The market potential is also impressive. In 2017 India generated $210bn in revenue from the tourism sector which accounted for 9.5% of India’s GDP. Combine this with the demographics where increased spend capacity and the push for ‘experience-based’ travel is booming with 24m Indians traveling abroad in 2017 and 165 million traveling to other states in India. There is also a mindset shift with travel moving beyond recreation to becoming a lifestyle choice and even as an aid to introspecting and discovering yourself.

According to a report by GrowthEnabler, the VR industry in India is expected to grow at a CAGR of 75% in the next five years and the past few years have witnessed the emergence of 170 AR/ VR startups (60% of which opened shop in the last 2 years). Funding though has been minuscule. Among the 70 VR startups, only a handful have raised a seed/ angel round. The top 15 AR/ VR startups have raised only $3m in funding till early last year. All this is expected to change pretty fast and pretty soon. Technology biggies are pitching in to create an ecosystem. In Apr 2018 T-Hub and FB India’s Innovation Hub Accelerator Program announced a cohort of nine VR startups with a 3-month program and access to training and research, top mentorship and support at FB’s VR Innovation Lab. The Govt. is also trying out and tinkering in the space. In a joint initiative by the Embassy of India and India Tourism, the India stall in the Holiday Fair at the Netherlands in 2018 (touted to be the biggest tourism event) welcomed visitors by making them experience India’s major tourist attractions (Qutub Minar, Amer Palace, Khajuraho, etc.) in VR.

Startups exclusively dedicated to VR tourism have been limited in India till now. The most promising VR startups in India include Meraki Studio which produces content (360 degree VR films) for experiential marketing for various industries including tourism. Transcend founded in Oct 2015 also focuses on highly immersive VR content and its application in tourism, education, brand story, and documentaries. Next is GazeMatic which hopes to be the ‘Skype for VR’. The company works on a platform that allows both callers in separate locations to virtually go and attend live events together (amazing!). Another one is Loop Reality whose product Perspect AI enables data-driven talent acquisitions and assessment and brings down biased decision-making at workplaces. Then there is Tesseract which put India’s stamp in the VR market by introducing the first ever and the world’s smallest 360 VR Camera. The founder’s dream is to be able to empower everyone with the ability to capture their precious memories in 360 VR and relive them as if they were back in the same moment again (reminds me of resurrection stone from Harry Potter!). Its VR is already a hit in the travel world with clients including MakeMyTrip, Nestaway. Other notable mentions include Grey Kernel, SmartVizx, Trimensions, Wowsome, and Xenium.

Let’s look at a few of the recent deals which have happened in the space. In July 2018 SmartVizX raised $1.5m in a pre-Series A round from IAN and YourNest. It uses immersive technology solutions using VR to influence decision making for real-estate and other industries. In May 2018, Rizort, VR-infused travel advise startup raised $3m in seed round from Blume Ventures and Dream Incubators Japan. The company leverages VR content for Oculus Rift and Oculus Go devices to showcase the destination resorts along with the use of AI to personalize recommendations to a traveler’s interests. In Jan 2018 Scapic raised $500k in seed funding from Axilor and Speciale Invest. It provides a cloud-based platform for users to build AR and VR scenes using a drag and drop interface which the company claims is as easy as putting together a PPT. In Nov 2017, Kalpnik Technologies a VR-driven spiritual startup (super interesting!) raised $500k in a seed round from Venture Catalysts.

P.S. I had to break this into a two-part series as I realized that my fascination for travel infused with VR led me to write a really long piece this time!

Virtual Tourism- Reimagining Tourism through VR and its Implication for VC’s: Part 1 was originally published in AR/VR Journey: Augmented & Virtual Reality Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.