Hotel Engine, a Denver-based travel startup, has recently raised $140 million in capital, making it one of the year’s largest rounds for a travel company. The company, which is valued at $2.1 billion, provides a platform for travel managers to book business trips, focusing primarily on hotel bookings. However, the company is now expanding its services to include flights and car rentals, which will result in a name change to Engine to reflect this broader focus. Hotel Engine also offers tech tools for hotel bookings management, marketing, dynamic pricing, and more.
While Hotel Engine is mainly focused on small- and mid-sized companies in the U.S., it faces significant competition from other players in the industry. Companies like Navan and TravelPerk, which have raised large sums of capital and continue to grow, are among its competitors. Additionally, there has been notable M&A activity within the industry, such as Amex GBT’s acquisition of CWT for $570 million. Despite the competition, Hotel Engine remains optimistic about its position in the market and believes there is still room for growth, especially in the small- and medium-sized company sector.
The Global Business Travel Association projects that travel spending will exceed pre-pandemic levels and reach $2 trillion by 2028. Hotel Engine has experienced significant revenue growth of 70% compared to last year and anticipates triple-digit growth next year. The company is on track to sell about 10 million room nights this year, with about 5% of its business coming from international markets. In 2025, the company plans to intensify its efforts abroad and hire between 300-500 additional employees in the next year to support its growth.
Despite having raised significant capital, Hotel Engine boasts being cash flow positive and profitable. A majority of the recent funding round was raised as a secondary offering, allowing early investors and employees to cash out some of their shares. This financial stability is a positive sign for the company as it indicates that it does not rely on external capital to sustain its operations. The latest round of funding was led by a growth equity fund under private equity firm Permira.
Looking ahead, Hotel Engine plans to introduce more products to its platform, including flights and car rentals, to offer customers a one-stop-shop for all their travel needs. The company also plans to integrate more AI technologies into its platform to enhance the user experience. While Hotel Engine has been solely focused on organic growth thus far, it is considering the possibility of acquisitions in the future given the evolving dynamics of the market. The company believes that there is a high probability of pursuing M&A deals in the coming year, as it continues to expand and innovate in the travel industry.
