Online travel market projected to reach US$533.8 billion by 2018

July 31, 2012 | Online Travel

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Growing consumer confidence in online transactions, and promise of greater convenience and instant bookings are fuelling demand for Online Travel services. Tremendous growth opportunity is also offered in emerging markets such as Brazil, India, Russia and China.

Internet has revolutionized the way in which consumers plan and book travel. As against depending on bookings made via conventional travel agents, travelers have become more comfortable in carrying out their own research and have become accustomed to making travel arrangements without the assistance of a travel agency. Travel revolution all over the globe centered on two innovations involving the Internet, one the ability to carry out specific searches and the other to purchase low-cost airline tickets online. Online travel industry not only benefited customers, but also businesses such as package tour companies, airline companies and hotels that were looking to increase sales by setting lower prices.

Another key aspect of the travel revolution was the Internet driven growth in competition, which pushed down prices and encouraged online travel bookings. Growth trends in the global travel industry have a significant impact on the dynamics of the online travel industry. As travel spending is determined by personal as well as business spending levels, any fluctuations in the same have a considerable impact on associated businesses, including online travel bookings. The recession that began in 2008 led to the rapid deterioration of business and consumer confidence, the impact of which was clearly evident on the leisure and business travel segments. Online travel business prospects have also been affected by the recent decline in airline capacity, rising airfares, and fluctuating hotel occupancy rates. In particular, developments in the air travel industry, such as air fare increase, bankruptcies of airline players, labor unrest or strikes, rise in fuel prices, and consolidation of carriers, have considerably affected the online travel market. Industry dynamics are also influenced by factors such as political instability, threat of terrorism, adverse weather conditions, and health risks, all of which have the potential to dent demand for travel.

As stated by the new market research report on Online Travel, Asia-Pacific is expected to offer enormous growth prospects in the online travel market primarily due to the relatively low online booking penetration rates. India, China, Hong Kong, Vietnam and Indonesia are expected to drive future growth in the online travel markets, largely due to burgeoning population, increasing purchasing power, growing desire for travel and tourism, and expanding infrastructure in support of Internet access. The United States represents the single largest market for online travel, though the market continues to witness saturating conditions.

Air travel forms the largest service segment in the global online travel market. Online air travel websites provide travelers information about air fares, airline schedules, and online bookings and reservations. Apart from travel websites and online travel agencies, online air travel booking and reservation services are also offered on websites operated by the respective airlines. Hotel reservation websites enable customers to search and book accommodations, through an online booking reservation system, in real time. A major advantage of booking hotel accommodations online is the convenience of booking from any location for any travel destination, at any time.

Online travel industry is characterized by intense competition. The industry not only involves the presence of well established players, but is also witnessing the frequent emergences of conventional as well as online providers of travel services. Some of the emerging participations include online portal and search companies, online travel agencies, private shopping websites, traditional travel agencies, travel suppliers, and online travel agencies. Major players profiled in the report include Ctrip.com International Ltd., Expedia Inc., hotel.de AG, Hotel Reservation Service Ltd., MakeMyTrip.com, Opodo Limited, Orbitz Worldwide, Priceline.com Inc., Rakuten Travel Inc., Travelocity, Travix International BV, TripAdvisor LLC, TUI Travel Plc, Wotif Group, Yatra.com, among others.

The research report titled "Online Travel: A Global Strategic Business Report" announced by Global Industry Analysts, Inc. provides a comprehensive review of trends, issues, strategic industry activities, and profiles of major companies worldwide. The report provides market estimates and projections across geographic markets such as the US, Canada, Japan, Europe (France, Germany, Italy, UK, Spain, and Rest of Europe), Asia Pacific, Middle East, and Latin America. Service segments analyzed include Air Travel, Hotel Accommodation, Packaged Tours, and Others.

Related Link: Global Strategic Business Report