Online travel market to reach USD 765.3 billion by 2025: GlobalData

Covid-19 accelerated online travel market’s growth
2022-02-24
/
/ New Delhi
Online travel market to reach USD 765.3 billion by 2025: GlobalData

In a recent survey by GlobalData GlobalData, 78 pc of consumers reported to be ‘extremely’, ‘quite’ or ‘slightly’ concerned about visiting shops because of the Covid-19 related risks

With the onset of Covid-19, the travel and tourism industry was hit the hardest. In 2020, it came to a virtual standstill where people fearing for their lives were ceased to travel. Now with the revival of the tourism sector and the ramifications of Covid-19, customers are abstaining from physically going to the site. With this new trend, customers are preferring to satiate their travel queries and needs online.
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No sector in today’s world remains untouched by digitisation. With the onset of Covid-19 people are sceptical of going physically into shops and offices. It is the need of the hour for companies to digitise their strategies and marketing. According to a GlobalData report, one of the leading companies in data analytics and consulting companies, the online travel market is expected to grow by a compound annual growth rate (CAGR) of 8 pc to reach USD 765.3 billion between 2022 and 2025. GlobalData also notes that companies that are refusing to shift to online mode will soon lose their share of the pie to the companies which have already adopted or are adopting e-commerce.

The report, Thematic Research: Online Travel (2022), says that the intermediaries of the travel industry are shifting from a high street presence towards an asset-light, online-only operation to meet changes in consumer demand and to keep the operating costs low. The pandemic also has played a crucial role, with people preferring to carry out the transactions online. This trend was confirmed in a recent survey by GlobalData, in which 78 pc of consumers reported to be ‘extremely’, ‘quite’ or ‘slightly’ concerned about visiting shops because of the Covid-19 related risks.

“Due to the changing needs and demands of the modern traveller, travel intermediation has evolved from traditional high street stores with in-person travel agents to a highly fragmented online marketplace,” says Hanna Free, Travel and Tourism Analyst at GobalData.

Another survey by the company say that 24 pc of consumers used an online travel agent (OTA) the last time they had booked a holiday, with just 7 pc of consumers using an in-store face-to-face travel agent.

GlobalData says online travel market is expected to grow by a CAGR of 8 pc to reach USD 765.3 billion between 2022 and 2025

The pandemic has decimated the tourism industry in 2020 as travel came to a virtual standstill bringing the global online travel market value down 60.1 pc YoY to USD 236.7 billion. The pandemic hit businesses hard, interrupting operations, inducing low consumer demand, and creating additional costs, however, many companies made use of these unique circumstances to accelerate their digital transformation. Leaders implemented customer-oriented technological solutions that tackled the challenges presented by Covid-19, such as reducing physical customer interactions.

“These solutions will better ensure survival in the post-pandemic recovery period. Perhaps the distinguishing feature of leading online travel companies is the integration and use of the latest technologies, to the extent that some travel brands such as Airbnb and Trip.com refer to themselves primarily as technology companies. With this, personalization, big data, travel apps, artificial intelligence, and machine learning play a major role in online travel companies’ strategies, with leading players investing heavily in these areas to meet evolving consumer needs,” says Free.

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