Major players in the online travel agent market are Booking.com, Expedia, Inc., Ctrip, TripAdvisor, Trivago, eDreams Odigeo, Despegar, MakeMyTrip, Lastminute, and On the Beach.
The global online travel agent market is expected to decline from USD 744.73 billion in 2019 to USD 595.78 billion in 2020 at a compound annual growth rate (CAGR) of -20%. The decline is mainly due to the COVID-19 outbreak that has led to restrictive containment measures involving social distancing, remote working, restriction on cross-border travel and the closure of industries and other commercial activities. The entire supply chain has been disrupted, impacting the market negatively. The market is then expected to recover and reach USD 820.18 billion in 2023 at CAGR of 11.24%.
The online travel agent market consists of sales of travel services through online channels. Online travel agents or agencies are those individuals or companies that have websites that allow consumers to book various travel related services via the internet. Travel agents are engaged in sales of travel services such as flights, buses, vacation packages, hotels, and rental cars via online networks. North America was the largest region in online travel agent market in 2019. Asia Pacific is expected to be the fastest growing region in the forecast period.
In June 2018, Cleartrip, an online travel company based in India announced the acquisition of the Flyin, an online travel company based in Saudi Arabia for an undisclosed amount. This acquisition is expected to help both the companies to obtain large consumer-based and wider outreach along with expanding the presence across the Middle East and North Africa region. Both companies together are expected to contribute 60% of the market share in the future throughout the Middle East. Flyin.com provides internet-based travel services such as booking information, online ticket booking, hotel facilities, and various payment options.
The online travel agent market covered in this report is segmented by service type into vacation packages; transportation; accommodation and by platform into mobile/tablets based; desktop based.
Rising possibilities of uncertain events such as COVID19 outbreak or natural calamities is projected to limit the growth of the tourism industry and online travel agent. According to the UNWTO estimates, the global international tourist arrivals in 2020 is predicted to fall by 20% to 30% compared to the previous year (2019), which translates into a loss of USD 30-50 billion in travel spending by the international visitors. Thus, the online travel agent market is to record a decline in 2020 owing to the impact of COVID19 across the globe. Moreover, according to Travel Daily Media’s new published in September 2018, the Typhoon Mangkhut jolts Hong Kong and China leaving tourism, aviation, and transportation industry at standstill. Therefore, possibilities of natural events are probably to restraint the growth of the tourism industry including the online travel agent market during the coming years.
Growing initiatives by the government of various countries to promote tourism and built strong tourism infrastructure in order to boost the revenues generated from the tourism industry is a major trend propelling the growth of the online travel agent market during the period. For instance, according to the Press Information Bureau- Ministry of Tourism, Government of India’s report published in July 2019, ministry of tourism is providing financial assistance under National Mission on Pilgrimage Rejuvenation and Spiritual Heritage Augmentation Drive (PRASHAD) and Swadesh Darshan schemes to various state and union territories for the development of tourism-related infrastructure in the country. Therefore, the government initiatives and steps to promote tourism and develop tourism infrastructure are to act as a key trend in the online travel agent market over the period.
The surge smartphone users along with growing internet penetration are anticipated to boost the online tourism industry and the business for travel agents during the period. Increasing penetration of internet and growth in the number of smartphone users is contributing to the consumer shift towards online channels for travel ticket and hotel bookings. According to a special report on Digital 2019 published by We Are Social’s in January 2019, the number of internet users in 2019 augmented to 4.39 billion than in January 2018, recording a growth of 9% or 366 million users across the globe. Furthermore, the number of smartphone users increased by 100 million or 2% to 5.11 billion in 2019 compared to the previous year. Consequently, the rise in the number of smartphone users coupled with increasing internet penetration is forecast to propel the revenues for the online travel agent market during the years to come ahead.
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Ankur Gupta, Head Marketing & Communications