Travel Industry and Online Travel Global Overview

October 2015

The travel industry is expected to record healthy growth over the 2014-2019 period, driven by a steady rise in tourist flows, with Asia Pacific countries predicted to generate especially strong performances. The online travel category is currently experiencing rapid change with mobile channel, personalisation and peer-to-peer travel services being the main disruptors. In particular the rise of the mobile channel is changing booking patterns, consumer behaviour and business models in travel.

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Steady growth of tourist flows fuels travel industry sales

Global tourist arrivals are expected to post a 4% CAGR over the 2014-2019 period driven by the Asia Pacific region. Global tourist arrivals are expected to reach 1.4 billion trips in 2019 from 899 million in 2009.

China strengthens its global leadership for outbound tourist spend

The slowdown in the Chinese economy is not expected to hamper the boom of outbound tourism from the country. Intra-regional travel is currently dominant, but long haul international travel is also about to take off in China.

Travel industry to record healthy growth

Sales of travel products are expected to record healthy growth over the 2014-2019 period at a 4% CAGR to reach US$2.7 trillion. Air is the leading category in travel, followed by hotels and other transport.

Rapid change in online travel category

Online travel is currently experiencing rapid change with mobile channel, personalisation and peer-to-peer travel services being the main disruptors. The app environment offers more convenience and less choice than web searches.

Increasing consolidation among online travel agencies

Expedia and The Priceline Group are driving consolidation in the OTA category. Their rise is posing a challenge to other intermediaries and to direct suppliers, especially hotels. TripAdvisor and Google are entering the travel bookings space.

Sharp rise of global mobile travel sales

The mobile channel is growing rapidly in the travel industry. Global mobile travel sales accounted for US$96 billion in 2014 and are expected to reach US$260 billion in 2019, that is 25% of total online travel bookings.

Mobile channel changing consumer behaviour and business models in travel

Today’s always-connected travellers seek information and assistance during their trips. This results in a shift of focus for travel companies from the time of the booking to the travel experience, in order to become mobile travel assistants.

Introduction

Scope
Key findings

Tourism outlook 2015

Asia Pacific world-leading region for GDP
Global GDP to record stronger performance from 2016
Asian economies drivers of growth

Tourism outlook 2014

Global international arrivals hit record levels
Western Europe leads global arrivals
France top global destination
China largest market for outbound tourist expenditure
Focus on China: Emerging middle class
Focus on China: Travel mainly focused on Asian destinations
Focus on China: Art, shopping and gambling main draws for tourists

Travel industry performance

Travel, a leading global industry
Global travel sales record healthy growth
Airlines lead travel sales
Asia Pacific region leading travel market
Hotel sales register positive performance
Strong growth for airlines in 2014

The evolution of Online travel

Online channel: Establishing a multi-channel model in travel
Online channel: Empowering consumers in travel
Key online travel trends today
Travel products: Mobile by nature
Travel companies as big data companies?
The rise of peer-to-peer travel services
Towards a closed app environment?

The OTA challenge

Online travel agencies: Increasing consolidation
OTA business model’s main strengths
OTAs: Largest spenders on online advertising
Hotels-OTAs relationship: Benefits and drawbacks
Risk of commoditisation for hotels
Competition moves to the hotel room
Focus on consumers and technology
Next travel booking giants?

The rise of mobile travel

Global mobile travel sales record sharp rise
Growing share of mobile within global online travel sales
OTAs to remain leaders in mobile travel sales over 2014-2019
Western Europe leader in mobile travel sales over 2014-2019
Mobile channel changing consumer travel behaviour
Travel business models in the mobile era
Travel companies to become mobile travel assistants
Rise of in-destination tourist services
Wearable technologies offering extra convenience and timing
Towards an increasingly personalised mobile travel experience

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