Global Online Travel Market Overview, 2023-28

Global Online Travel Market Overview, 2023-28

Online travel refers to the process of planning, booking, and managing travel arrangements using online platforms and websites. It includes a range of travel-related activities, such as looking for travel-related information, comparing costs, and booking travel-related services online, including hotels, rental cars, flights, and other lodgings. The way people organize and reserve their travel has been transformed. It gives travelers easy access to a variety of travel options, enabling them to look up and contrast various airlines, lodging options, and other service providers. These platforms make it simpler for users to identify the greatest bargains and make informed selections by providing intuitive user interfaces, sophisticated search filters, and real-time availability. E-commerce travel websites and review websites make up the bulk of the online travel sector. E-commerce travel sites have some experience in the sale of travel-related goods, such as flights, conveniences, and rental cars. These can be purchased directly from a travel agency's website or through an online travel agency. Travelers can publish reviews of accommodations, restaurants, and other interactions with locals on websites like TripAdvisor in the interim. These businesses usually make money by running advertisements on their websites. The three main elements that are anticipated to drive the growth of the online travel market are an increase in mobile usage, an increase in internet penetration, and cutting-edge mobile apps. Further factors supporting market expansion are anticipated to be the rise in disposable income in emerging nations and the simplicity of online comparison shopping for a range of travel options. Online bookings for hotel reservations and travel tickets are becoming more and more popular as a result of the web's growing accessibility and an increase in the number of cell phone users.

According to the research report, “Global Online Travel Systems Market Overview, 2023-28” published by Bonafide Research, the market is anticipated to cross USD 990 Billion by 2028, increasing from USD 567.71 Billion in 2022. The market is expected to grow with 10.06% CAGR by 2023-28. The demand for dependable transportation, individualized service, exclusivity, and pleasant and professional interactions with personnel is on the rise, which is causing the market to expand. Online travel firms all over the world provide the essential services, increasing market expansion. Additionally, it is anticipated that the youth's growing propensity for group travel will hasten industrial development. Additionally, millennial and working professionals choose internet travel booking services over offline ones. Customers' rising need for unique and original travel experiences is anticipated to fuel market expansion throughout the forecast period. Additionally, the market is anticipated to be driven by expanding digital technologies, changing consumer spending patterns, and rising urbanization. Travel technology makes it possible for customers to obtain travel-related services in a way that is both more convenient and cost-effective than traditional offline services, which is predicted to boost industry growth over the course of the projection period. Additionally, travel companies are introducing speedy, user-friendly websites that are optimized for smartphones. Peer reviews, clear price comparisons, and 360-degree video tours are all features that these firms offer to help tourists plan and book their vacations online. During the projection period, growth is anticipated to pick up.

Based on the regions, the South America and the Middle East & Africa are anticipated to exhibit strong growth over the future owing to government initiatives to promote tourism across the regions. The South American countries offer tourists with natural attractions such as deserts, jungles, and mountains along with different activities in national parks, thereby attracting wildlife enthusiasts, adventure seekers, and hikers. Furthermore, the countries in this region also offer various culinary experiences from street food to fine dining restaurants. Although, the region has lot to offer to the travel and tourism industry, lack of technological infrastructure pose a challenge to market growth. Enhancement in technological capabilities such as data centers and telecommunication networks help travel vendors in expanding online travel booking network across the region, in turn contributing to market growth. On the other hand, the Middle East has been experiencing a solid growth with the resumption of tourism activities post pandemic. The frequency of online booking has paced up with the emerging trend of escapism travel, which allows people to work from anywhere they want. The last-minute travel bookings are expected to gain momentum with an increased desire to travel among the domestic travelers. Additionally, with the increasing demand of luxury hotels, total number of 32,621 hotel rooms were under construction in Saudi Arabia in 2022, which bodes well for market growth. This coupled with the robust technological and tourism infrastructure in the region is expected to fuel the market growth.

However, a few potential concerns include unanticipated climate change and environmental harm. Expanding online marketplaces and reliable providers of vacation packages, lodging, and other services around the world are creating new opportunities for the sector, which is anticipated to see growth accelerate during the projection period. The expansion of the internet travel industry revenue is primarily being driven by changes in consumer behavior, social media, greater disposable income, increased government activities to promote tourism, and a growing preference for adventurous travel. The growth of vacation packages services in the online travel market has been influenced by several factors, including consumer preferences, technological advancements, and shifts in travel behavior. Vacation packages offer travelers a bundled experience that includes multiple components of their trip, such as flights, accommodations, transportation, activities, and sometimes even meals. Vacation packages provide travelers with a one-stop solution for their travel needs. Instead of booking each element separately, travelers can book a comprehensive package that includes everything they need. This convenience appeals to individuals who value time-saving and hassle-free planning. One of the key attractions of vacation packages is the potential for cost savings. Bundling services often results in discounts and lower overall prices compared to booking components individually. Travelers see value in securing flights, accommodations, and activities at a reduced cost. Also, online platforms have enabled last-minute travelers to find and book vacation packages quickly.

Based on type, the global online travel industry is segmented into Package travel and Direct travel. The direct travel agencies enable customers to engage while researching, booking, or planning their travels. The online direct travel agency can be on a mobile app or website via which the booking can be made instantly with the online travel agency. However, direct booking allows travelers to have a direct relationship with the travel supplier, whether it's an airline, hotel, or car rental company. This direct interaction gives travelers more control and the ability to personalize their travel experience, including selecting specific preferences, customizing packages, and accessing loyalty programs or exclusive offers. Moreover, the surging adoption of direct booking as it provides better pricing and deals compared to third-party OTAs is propelling the segment growth. Additionally, the rising use of direct booking as it allows better communication and customer service as travelers can directly contact the travel supplier for any queries, changes, or requests, eliminating the need to navigate through third-party customer service channels, thereby contributing to the segment growth. Furthermore, the rise of online platforms and technology that makes it easier and more convenient for travelers to directly book with travel suppliers is another major growth-inducing factor.

Based on device outlook, the online travel booking market is segmented into desktop and mobile. Mobile device is expected to dominate the online travel booking market during forecast period. Mobile is expected to grow with high CAGR as it has taken over much of the internet; it is still not widely used as an online booking tool. Apps are often smoother and simpler to browse than mobile-friendly websites, and they provide consumers with a lightning-fast experience and drive the online travel booking market. Comparing pricing, many people find it difficult to make a booking using a mobile device. It's simple to move between different websites and settings on the desktop, but much more difficult on mobile. Creating an app is an interesting alternative to a mobile-friendly website. While just 27% of users preferred apps, those who did value the unique capabilities they offer to entice customers to the online booking market via mobile. Mobile reservations increased for digital travel providers that offered applications. Based on the age group, 32-43 Years (Generation X) straddles the line between the pre-digital era and the digital age. Gen X travelers are comfortable using online platforms for research and planning, but they may also consult traditional sources like travel agencies or recommendations from friends and family. Many in this age group are raising families, which influences their travel choices. They might opt for family-friendly accommodations and activities and prioritize convenience and comfort. Gen X travelers have diverse interests, ranging from adventure and cultural experiences to relaxation and luxury. They may value loyalty programs and established hotel chains. Millennial are the tech-savvy generation grown up with the internet and smartphones. They are highly active in the online travel industry, using a variety of platforms to plan and book their trips. Millennial heavily rely on online platforms, mobile apps, and social media for travel inspiration, research, and booking.

Market Dynamics
• Shift in Travel trends: The market for online travel agents is predicted to be significantly impacted by the quick movement in travel habits toward business leisure (bleisure) and food tourism. Bleisure travel is a hybrid form of travel that combines both business and leisure trips. After finishing their official duties on business travels to different nations, people like to travel and sample the local cuisine. The Global Business Travel Association estimates that one third of business travelers include a leisure activity on at least one of their journeys each year. Another significant trend that is anticipated to fuel the market for online travel agencies is food tourism. The focus of food tourism is on real gastronomic encounters. There has been increasing shift towards experiencing local delicacies of specific countries in unique food and beverages activities while travelling in the last two years.

• Convenience and accessibility: The ease of use and accessibility provided by online platforms have changed how consumers organize and reserve their travel. With the help of these platforms, travelers may access a wide range of travel-related information, choices, and services in a one location. Time and effort can be saved by having access to various flights, hotels, and travel agents through an easy-to-use interface. Travelers can make reservations either at home or on the road by comparing pricing, reading reviews, or making reservations. Because internet platforms are accessible around-the-clock, travelers are no longer constrained by the opening hours of conventional travel firms. Because of their accessibility and ease, travelers now have greater influence over their itinerary and are better equipped to make judgments.

Market Restraints

• Geo-Political Tensions: During the projection period, geopolitical tensions are projected to have a detrimental effect on the market for online travel agencies. Sanctions against Russia, economic protectionism, and increased military tensions in the Middle East were all effects of geopolitical unrest. For example, Brexit may result in increased trade restrictions between the UK and other European nations. In order to increase domestic manufacturing, the USA is also enacting a number of trade restrictions, particularly with China. For instance, increasing input costs brought on by steel and aluminum tariffs (in March 2018) in the USA as of mid-2019 resulted in 0.6% fewer jobs, or 75,000 fewer jobs in the manufacturing sector. Job losses brought on by geopolitical tensions will reduce people's disposable incomes and purchasing power, discouraging them from touring and traveling. Future market growth will be hampered by this.

• Competitive Pricing and Deals: Market competition has led to competitive pricing and the availability of alluring offers and discounts. OTAs and booking websites work hard to draw customers by promoting exclusive bargains, package discounts, and last-minute specials. Travelers can find the greatest selections and acquire the most affordable offers by using the ability to compare costs across several sites. Travelers may make informed judgments and take advantage of advantageous pricing options because to pricing transparency, real-time availability information, and price changes. For those looking to save money and get the most for their money, online travel has become a desirable alternative due to the availability of such competitive pricing and packages. Moreover, loyalty programs and reward systems offered by these platforms further incentivize travelers to book through their platforms, enhancing customer loyalty and engagement.

Market Trends

• Increased use of artificial intelligence (AI): AI is used by online travel agencies to improve user experience and operational effectiveness. Chatbots and virtual assistants, who offer individualized advice and help customers with travel reservations, are one way AI is being employed. AI-driven chatbots may deal with a range of customer inquiries, from making travel and lodging arrangements to responding to frequently asked questions. This improves the user experience by giving prompt and correct responses to enquiries, saving time and resources for online trip booking services.

• Demand from Solo Travelers: Due to changing lifestyles, which include more individuals getting married later in life, young people taking gap years to travel alone, high divorce rates in many countries, and the increased acceptance of solo travel, solo travel is becoming more and more common. There are more chances for the travel business as demand from solitary travelers rises. To entice these single travelers, the participants in the travel business are providing a variety of flexible and cashless packages.

Key Players Insights:
Booking Holdings Inc., Airbnb, Inc., Edreams Odigeo, Expedia, Inc., Make My Trip Pvt. Ltd., Thomas Cook Group plc, Hostelworld.com Limited, Alibaba Group Holding Limited, Tripadvisor LLC

Considered in this report:

• Geography: Global
• Historic year: 2017
• Base year: 2022
• Estimated year: 2023
• Forecast year: 2028

Aspects covered in this report:

• Global Online Travel with its value and forecast along with its segments
• Regional and Country-wise Online Travel market analysis
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

Regions covered in the report

• North America
• Europe
• Asia-Pacific
• South America
• Middle-East & Africa

By Service Type:

• Transportation
• Travel Accommodation
• Vacation Packages
• Others (Travel Insurance, Visas and passport services, Currency Exchange Services, Travel spa and wellness services, Travel gear and gadgets, etc.)
By Device:

• Laptop/Desktop Devices
• Mobile Devices

By Mode of Booking:

• Online Travel Agencies (OTAs)
• Direct Travel Suppliers

By Age Group:

• 22-31 Years
• 32-43 Years
• 44-56 Years
• >56 Years

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience:

This report can be useful to industry consultants, manufacturers, suppliers, associations and organizations related to the Online Travel industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.

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