Travel industry venture capital and private equity funding slowed sharply in the third quarter of 2026, marking the second consecutive quarter of declines. According to Skift’s Capital Allocation Tracker, the sector logged 57 funding rounds in Q3, a significant drop from the 75 rounds recorded in the second quarter and the 110 rounds seen in the first quarter.
AI Startup Rounds Cut in Half
The pullback was particularly steep for companies focused on artificial intelligence. Skift tracked only 12 funding rounds for AI-native travel companies in the third quarter, down from 25 in the second quarter. This shift reduced the share of AI-native firms in total funding rounds to 21%, down from 33% in Q2.
Seth Borko, Skift’s head of research, noted that uncertainty surrounding AI disruption is causing financial investors to pause on businesses that are not AI-native. The same concerns appear to be driving established players toward mergers and acquisitions rather than new investments.
Publicly traded travel companies, many of which have seen share prices pressured by fears of AI disruption, have returned $22.1 billion in capital to shareholders during this period.
Acquisitions Replace New Funding
While new funding dried up, incumbent travel companies moved aggressively to acquire AI capabilities. Notable deals included Expedia’s purchase of AI travel planner Layla, Navan’s acquisition of BoomPop, Engine’s purchase of Options Travel, and WeTravel’s acquisition of Tourwriter.
Total tracked investment reached $1.38 billion for the quarter. However, this figure was heavily skewed by a single $1 billion commitment to Adani Airports for modernization and capacity expansion. Excluding that large deal, funding fell 25% from Q2 and 72% from Q1.
The data suggests a clear shift in how capital is flowing through the travel sector. Investors are waiting to see how AI disruption plays out before committing to new ventures, while established companies use their cash reserves to buy innovation rather than build it from scratch.
Source: Skift
