So first in a nutshell – funding is following search, growing on mobile and data/analytics and flattening on social. (See below two charts in PhoCusWright’s study on start-ups – covering 528 companies from 2005-2012)

Priceline’s acquisition of Kayak and Expedia buying a majority stake in European search site Trivago  has made search sexy again with many believing the search story has yet to be played out fully. The two major OTAs’ acquisition of search models place them at the higher end of the purchase funnel and gives them an alternative to spending on Google search.

TripAdvisor’s “morphing” into a search model “right before our very eyes” was also noted by panellists, pointing out the new search functions on the travel review site, which reached 100 million reviews last week.

Said Douglas Quinby, senior director research, PhoCusWright, “There’s a lot of entrepreneurial interest in social neyworking but investors are not necessarily buying it. Data/analytics – funding is off the charts, there are a lot of dollars chasing a small number of companies in that area.”

During the panel, Sven Achter, advisor for Holtzbrinck Ventures, said social planning sites, from a psychological point of view, “are very nice to play with but they are not synchronized with the process of booking hotels. They generate a lot of interest and fun – but they are hard to monetise.

“Naïve verticalisation of concepts usually fail.”

Phil Donaty, product director, development tools, Travelport, noted this was a shame because usually these sites had beautiful interfaces.

So what are some of the problems yet to be solved in travel and with start-ups in general?

Achter said, “The problem with start-ups is they are too far away from the customer and where purchasing decisions are made. They need clear customer value and a clear monetization strategy is needed – for example, subscriptions instead of treating customer as the first time, each and every time.”

Donaty said the two big problems were around data fragmentation and content. “We still assume it’s easy for travellers to find what they want, which is not the case. Even in the hotel space, it is estimated there are 500,000 million hotels, and only 12% represented by chains – so it’s not easy for travellers to access this content.”

The key is to come up with tailored recommendations. “No company has been able to look at my interest in travel and to build loyalty with me – not just in transactions but personalized recommendations.”

For Valyn Perini, CEO of OpenTravel, which organised Travel Traction, the problem resides not in technology, but in knowledge. “We need better informed principals in start-ups who understand the complexities, commercially and technically.

“The most common mistake is the thinking that data is freely and cheaply available – you can’t use the Travelport API like you can the Flickr API.

“The lack of basic knowledge is what is hampering start-ups.”

For Roman Rochel, CMO of 9flats, the problem to solve is to take out friction from the travel experience.

“The missing link is right before the travel and during the travel and taking that data and giving it to the traveler at that location – it’s not been aggregated and presented in a meaningful way.”

Achter said while funding was hard to raise in Europe now, Asia was growing in numbers of VCs and funds available. “The US though is still centre of the world and there’s a shift in attention towards B2B models. Social’s coming to an end with Facebook, everyone wants to know what’s next.”