Market Overview
Amidst the terror of COVID-19 and subsequent plunge in online travel stocks, Tracxn-a AI enabled business analytics software platform identifies the potential driver of travel start-ups. Lyric, a platform that focuses on booking of serviced apartments, its value is observed to surge and is pinned as the most promising platform that can bolster the online travel market.
Vacation rentals and hostel bookings are lucrative segments of the online travel market. While flight and train reservations drop and their rate of cancellation rises, the online travel market is expected to undergo a temporary slowdown. Pandemics are uncertainties and the travel sector is at stake whose improvement in stock figure can only be reflected with cure for the pandemic.
Market Research Future (MRFR), in its latest “Online Travel Market” report, discusses the future of online travel market. As per MRFR, the online travel global market value is estimated at USD 1,134.55 Bn against 13.16% CAGR by 2027.
The days of long lines and “closed” awfulness are bygones. In the early 20th century, the wave of online travel has bought sheer satisfaction to people. The innate inclination of people towards convince was tapped and the online travel solutions experienced high demand. In the coming years, online travel services will have no alternatives but only witness upgradations.
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Covid-19 Impact
The global financial crisis and the lack of consumer spending post the COVID-19 outbreak has created a significant threat for the travel intermediaries. The negative impact on airline and lodging bookings has compelled the travel companies to stop their operations completely and also lay off employees in the past month. As stated by the CEO of Booking Holdings, online travel has suffered two recessions in the past, but the market growth has been hit the hardest due to this outbreak. As analyzed, some of the largest public online travel agencies are likely to lose more than USD 12 billion in revenue due to the 2020 Coronavirus outbreak, and the amount can even reach up to USD 20 billion in case the number of cases goes up in coming months. The pandemic has severely affected the North American and European countries. These countries are witnessing a decline in business. At the same time, Chinese online travel agencies (OTAs), although at a sub-optimal level, are slowly resuming operations.
The largest business firms are suffering massive losses, while small businesses are doing marginally better and are slowly recovering. The rapid spread of the Coronavirus across Europe, Asia, and North America and the uncertainty of travel trends have led to the Expedia Group, Inc. having to withdraw its full-year EBITDA 2020. With no visibility of better conditions ahead, the company has suspended reshare purchases to ensure complete and additional flexibility for the future.
As per MRFR analysis, the impact of COVID-19 on the online travel industry is quite high and is likely to remain the same during the coming months. Even after the situation reverts to normal, the industry will continue to follow the norms of social-distancing. The industry cannot expect the same quantum of airline and lodging bookings as before. It is expected that the prices will increase considering how important it is for the customers to travel. This will, in turn, result in increased cash flow in the market, thereby creating opportunities for the OTAs across the globe.
The growing awareness about benefits of online travel have laid the ground work for the emergence of online travel start-ups. Cost-cutting in marketing is one such advantage. Online travel websites eliminate the need for the tradition marketing techniques by the distribution of leaflets and pamphlets. Hence, the economic method of publicizing travel packages have and will gain considerable traction for online travel in future.
The high penetration of digitalization is likely to shore up the online travel market growth. Previously, people were concerned about the high expense of online reservations due to costly data packages. Lately, the evolution of the telecom sector has contribute significantly to the expansion of the online travel market. Plunge in data price and the availability of robust internet suppliers can thrust the online travel global market.
The establishment of reliable payment gateway system has also promoted the growth of online travel market. The online travel markerters deployed trusted payment gateways, which developed customer transparency. The retention of brand loyalty and expansion in customer base are other drivers of the online travel market.
The aesthetic appeal of a website can persuade people over the conventional techniques. The constant flash of recent searched travel packages on search engine and e-commerce website often result in the psychological manipulation and direct traffic to online travel marketer’s page. In addition, the fluctuations in price and discounts on travel package can be monitored effectively by customer, online. This is also likely to prompt the expansion of the online travel market.
The invasion of COVID-19 has hampered the expansion of the travel industry. However, with the availability of better digital solutions, technologies disrupting the telecom market, rise in smartphone ownerships, and the introduction of robust wireless connectivity solutions can improve the impetus of the worldwide market of online travel.
As per the regional study of MRFR, the online travel market in North America can value at USD 192.46 Bn against 11.8% CAGR by 2027. Europe online travel market estimate at USD 178.72 Bn at 12.0%. CAGR in the forecast period. Asia Pacific online travel market to rise at 15.9% CAGR by 2027. The above mentioned factors are identified as potential drivers for the global market. As the effect of the pandemic subsides, the online travel market will gain momentum.
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