The significant reduction in travel bookings caused by COVID-19 led to Flight Centre closing 58 New Zealand stores in 2020. While online travel intermediaries are not immune to the downturn in business caused by COVID-19-related travel restrictions, online is set to benefit from reduced competition owing to store closures, as the dynamics of the industry continue to shift towards online and away from the traditional travel agent model.
Business rather than leisure travel increasingly underpinned the business model for travel agent chains over the review period, and it remains to be seen if businesses will reduce their travel expenditure over the forecast period in favour of digital meetings following on from the new norms imposed on them by COVD-19-related shutdowns. Additionally, business travel may increasingly be characterised by the use of online platforms over the forecast period, with companies looking for lower costs rather than the higher level of personal service that traditional travel agencies provide.
While COVID-19 has severely restricted travel capabilities in 2020, the forecast period is still expected to see metasearch engines grow in popularity. While traditional travel businesses such as hotels and airlines rely on customer loyalty and have significant loyalty programmes, these metasearch engines actively encourage disloyalty.
With internet penetration expected to reach 94% in New Zealand by 2024, the propensity to book travel online is expected to increase over the forecast period, with increasing mobile device usage expected to characterise online travel sales to New Zealand residents. As such, platforms such as Airbnb are expected to be key drivers of growth, while in lodging, larger hotel chains such as AccorHotels Group, InterContinental Hotels Group and Choice Hotels Australasia are all expected to continue to expand their mobile presence through the use of functional apps to make booking, checking in and checking out more streamlined, whilst also offering customers loyalty points.
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