BNPL, smart hospitality, virtual tours propel accommodation tech boom in SEA

A new report from Velocity Ventures, the Innovation & Deal Flow Report 1Q2025 [Accommodation], highlights a dynamic global landscape in accommodation technology.

While the report by Velocity Ventures, which identifies itself as a leading travel and hospitality tech investor in Southeast Asia, offers a broad overview, a closer examination reveals key areas of innovation and investment that are particularly relevant to the region.

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Key innovation areas gaining traction in Southeast Asia

• Buy Now Pay Later (BNPL): The report identifies BNPL as having top 3 highest CAGR globally at 48.4 per cent. Furthermore, it shows a top 3 increase in CAGR of +27.1 per cent for BNPL. The accommodation industry is gaining traction, offering extremely lucrative opportunities in the BNPL field as accommodators increasingly leverage credit services for their stays. This trend is highly pertinent to Southeast Asia, where digital payment solutions and consumer credit are rapidly expanding.
• Smart hospitality: Smart hospitality has a 26.1 per cent CAGR globally and a top 3 increase in CAGR of +4.2 per cent. Smart room features such as AI room assistants are getting increasingly popular among consumers. This indicates a growing demand for technology-enhanced guest experiences in Southeast Asian hotels and accommodations.
• Virtual hotel tours: Virtual hotel tours are also gaining momentum, with an increasing number of travellers seeking 360-degree images and detailed video walkthroughs to verify amenities and room quality. This trend caters to the digitally savvy travellers in Southeast Asia, who rely heavily on online research before making booking decisions.
• Modernising legacy systems: The hospitality industry is looking to revise outdated legacy systems and pivot toward competitive technological solutions with updated stacks that utilise cutting-edge features such as AI predictive analytics. This is a crucial area for Southeast Asian hotels, many of which are in the process of digital transformation to enhance efficiency and guest satisfaction.

Velocity Ventures’s pipeline and potential Southeast Asian implications

While the report primarily focuses on global trends and provides snapshots of recent VC activity worldwide, Velocity Ventures’s own proprietary deal pipeline offers potential insights into the types of startups it is actively considering, which could hint at future trends in Southeast Asia.

Although not explicitly Southeast Asian, Projects A12 and A13 address critical pain points in the travel industry that are also relevant to the region.

Project A12 is a dynamic holiday packaging platform offering white-labelled turnkey services for airlines. It aims to disrupt the traditional online travel agency (OTA) model by offering an AI-driven, zero-commission model with real-time bargaining. The report highlights the untapped opportunity of high OTA commissions (15-25 per cent) that inflate hotel prices. Such a platform could empower Southeast Asian airlines and hotels to gain more direct control over pricing and customer relationships.

Project A13 is an all-in-one platform enabling hotels to sell experiences, gift vouchers, and monetary gift cards through proprietary technology tailored specifically for luxury hotel chains. It taps into the growing demand for premium experiences. As Southeast Asia’s tourism sector recovers and evolves, luxury hotels in the region could benefit from such platforms to diversify their revenue streams beyond room bookings.

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The Velocity Ventures report paints a picture of a globally dynamic accommodation tech sector with significant innovation in BNPL, smart hospitality, and virtual experiences.

Furthermore, the strategic focus of Velocity Ventures’s pipeline projects on commission-free booking models and enhanced revenue generation for hotels addresses key challenges and opportunities also present in the Southeast Asian market. As the region’s travel industry continues its recovery and embraces digitalisation, these global trends and investment patterns suggest a promising future for accommodation technology startups in Southeast Asia.

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