Competitor Strategies in Travel

July 2021

No major player in the travel industry has escaped the impact of the travel restrictions resultant from the on-going global pandemic. However the impact has varied; players exposed to business and luxury travel have been impacted the most, whilst players with a higher exposure to domestic travel have been less affected. Meanwhile, the presence of global travel brands is increasingly being split with those reliant on China, such as Ctrip and the rest of the world, like Expedia.

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Key findings

Global pandemic disrupts travel, but impact varies

No major player in the travel industry could escape the impact of the travel restrictions resulting from the global pandemic of 2020 and 2021. However, the impact has varied across the global travel industry with airlines impacted the most due to international travel restrictions and lodging the least, cushioned by increased domestic travel.

Chinese players follow their own dynamic

China is increasingly developing its own dynamic in global travel, for example C-trip is the global leader in OTAs, but its sales are sourced almost entirely from the Chinese market.

Due to China’s relatively more rapid recovery from the pandemic, players with higher exposure to the Chinese market are forecast to be among the best performers

US and European players’ exposure to emerging markets remains low

Global players based in the US and Europe are largely reliant on sales from mature markets, this is particularly the case in airlines and intermediaries, however lodging players have relatively higher exposure to emerging markets, with for example Accor having a 40% share of emerging market sales. Again China stands out, with its players mainly exposed to emerging markets.

Lodging has the lowest share of leading global players

Lodging is the most fragmented travel category, where in most regions 20% or less of sales are through the 10 leading global players. The US market is a notable exception where almost 60% of sales are through the leading players. Meanwhile, airlines and intermediaries are far less fragmented, with most sales through the leading global players.

Leading players focus on key brands

Lodging players have the lowest reliance on a their leading brands relative to airlines and intermediaries, which tend to rely mainly on a brand such as American Airlines or Booking.com. Global lodging players such as Marriott and Accor are increasingly developing hotel brands targeting distinct lifestyle segments, a trend not seem in other travel industry categories.

Introduction

Scope
Key findings

A Closer Look at: Airlines

Airlines: Impacted the most by the global pandemic
US-based carriers continue to lead global airlines
Regions with many countries have a more fragmented airlines scene
Chinese airlines’ dynamism derived from emerging market exposure
Survival of the fittest as leading airlines increase their market share
Global airlines groups reliant on limited portfolio of key brands
China-based airlines to rise on the back of COVID-19 recovery

A Closer Look at: Lodging

Lodging faced unparalleled impact of COVID-19
Airbnb showed the strongest growth as pandemic impacted hotels
Lodging a fragmented market - except in North America
Leading global chains remain focused on developed markets
Mergers and acquisitions key to market share growth
Leading global hotel players diversifying their brand portfolios
Wyndham to move up global rankings most in otherwise stable picture
Mid-market hotels most resilient in the face of the COVID-19 pandemic
Hotel groups with balanced portfolios best placed for recovery
Rumours persist of a merger between Accor and IHG
Dynamic short-term rentals well placed during and post pandemic
Airbnb tops off 2020 with a major IPO

A Closer Look at: Intermediaries

Pandemic decimates travel with a perfect storm for intermediaries
China-based intermediaries resilient in the face of the COVID-19 pandemic
Intermediaries presence split by China versus rest of the world
Leading global players account for around 50% of sales in most regions
M&A drives growth for Booking Holdings and Expedia
Most global leaders focus on one key brand in intermediaries
Business travel focused players impacted short term by global pandemic
Booking and Expedia go head-to-head worldwide, except in China
Booking Holdings shores up its balance sheet and restructures
Expedia’s woes compounded after unsuccessful integration

Conclusion

Outlook
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