Online Travel Market Size
The online travel market was worth $600.5 billion in 2023 and is expected to grow at a rate of more than 7% per year from 2024 to 2032. This growth is due to a mix of economic considerations and good market conditions. As economies around the world grow, people have more money to spend on travel and fun activities.
A report from the World Travel and Tourism Council in May 2024 said that global travel spending has gone up by 20%. It is because the economy is becoming better and people are spending more money on travel. Online travel firms also get people interested by offering deals, discounts, and prices that are lower than those of their competitors.
| Report Attribute | Details |
|---|---|
| Base Year | 2023 |
| Online Travel Market Size in 2023 | USD 600.5 Billion |
| Forecast Period | 2024 - 2032 |
| Forecast Period 2024 - 2032 CAGR | 7% |
| 2032 Value Projection | USD 1.1 Trillion |
| Historical Data for | 2021 – 2023 |
| No. of Pages | 240 |
| Tables, Charts & Figures | 360 |
| Segments covered | Services, Mode of Booking, Platform, Traveler, Application |
| Growth Drivers |
|
| Pitfalls & Challenges |
|
Partnerships and acquisitions can help businesses reach new groups of customers or areas of the country. Working with well-known travel brands or loyalty programs can improve your business's reputation and bring in clients who trust the brand you work with. Strategic initiatives also assist businesses grow their market share and technology skills. Booking Holdings bought the travel search engine KAYAK in April 2024 to improve its technology and reach more customers. By buying this company, Booking Holdings may use its knowledge to make its metasearch better, giving users additional travel options and a better search experience.
The online travel market works in several places, each with its own rules about data privacy, consumer rights, and taxes. It can be expensive and hard for companies who do business worldwide to adapt to changing rules. For example, when the economy is bad, people may not be able to afford to travel, which can hurt online bookings and the general growth of the market. Also, political instability and wars can mess up trip plans and make people less sure about their purchases.
Online Travel Market Trends
More and more, governments throughout the world are seeing the social and economic benefits of a strong internet travel business. This has led to a lot of new policies and programs that are meant to help online travel providers expand. To persuade people to travel within their own country, governments are giving them tax benefits, travel vouchers, or loans with no interest. This encourages people to travel within their own country, which increases bookings for domestic tourism through internet platforms.
Governments are making it easier for people from other countries to get visas by making the application process electronic and shortening the time it takes to process them. This makes it easier to get in and make faster booking selections, thanks to online travel platforms. The Indian government said in January 2024 that the e-visa process would be easier for 50 more nations. This led to a 25% increase in online travel bookings.
There is an interesting fight going on in the travel sector between traditional travel companies and online travel providers. OTMs have been the most popular way to book travel in the past few years, but people are starting to act differently, which could mean a return to the modern travel agency model. Modern travel agencies plan trips that are personalized to each person's needs and wants. They use the knowledge of people to give advice, make suggestions, and handle complicated travel plans. People who travel now want plans and experiences that are unique to them.
In February 2024, TripAdvisor added further personalization capabilities, such as AI-powered suggestions for hotels, restaurants, and things to do based on what users like and have done in the past. This helps them communicate better and make their services more efficient.
Online Travel Market Analysis
Based on platform, the market is divided into mobile-based and web-based. The mobile-based accounted for a market share of over 55% in 2023. Mobile-based offerings have become essential for travel companies to capture and engage users effectively, as the proliferation of smartphones has led to increased adoption of mobile travel apps. Consumers increasingly prefer booking and managing their travel through mobile apps due to their convenience and functionality.
Governments are investing in digital infrastructure to support mobile connectivity, which is crucial for the effectiveness of mobile travel apps. Policies are also being developed to ensure secure and seamless mobile transactions for travel services. In February 2024, the Indian government promoted digital payments through mobile apps. It encourages travel companies to adopt mobile payment solutions to facilitate easier transactions for both domestic and international travelers.
Mobile travel bookings have been rising, with users favoring apps for real-time updates, easy access, and personalized experiences. Users expect personalized experiences and tailored recommendations from their mobile travel apps. The ability to access and manage travel information on-the-go is a significant driver of mobile app usage in the travel sector. In April 2024, Hopper updated its app to include personalized travel alerts, which notify users of price drops and deals based on their search history and preferences. It led to a 35% increase in app downloads.
Based on traveler, the online travel market is categorized into leisure traveler and business traveler. The leisure traveler is expected to hold over USD 700 billion by 2032. Rising disposable incomes, especially in emerging markets, are contributing to a higher demand for leisure travel. Leisure travelers are increasingly looking for authentic, off-the-beaten-path experiences, including local culture and hidden gems. There is also a growing interest in sustainable travel options, eco-friendly accommodations, cultural immersion, adventure tourism, and eco-tourism.
Leisure travelers are increasingly seeking unique, personalized travel experiences over traditional vacation packages. In April 2024, Airbnb expanded its "Experiences" section to include more niche and adventure activities, such as local cooking classes, wildlife safaris, and cultural tours. It led to a 40% increase in bookings for such experiences.
North America online travel market accounted for 35% of the revenue share in 2023. North America, particularly the U.S. and Canada, has a high level of internet and smartphone penetration, which drives the adoption of online travel services. Travelers in North America prefer personalized travel experiences, relying heavily on digital platforms for customized itineraries and recommendations.
The region shows a strong rebound in travel demand, driven by both domestic and international travel. In March 2024, The U.S. Department of Commerce launched a new campaign to boost international tourism, partnering with online travel agencies to offer promotional deals and discounts. It resulted in a 25% increase in travel bookings to the U.S.
The Europe online travel market is characterized by diverse travel preferences, ranging from cultural tourism to beach vacations, leading to a robust demand for varied travel options. There is a growing emphasis on sustainable travel and eco-friendly tourism options in Europe as well. In March 2024, The European Commission launched the Digital Travel Initiative to support digital transformation in the travel sector. It focuses on enhancing online travel platforms and mobile app capabilities across EU member states.
APAC countries, including China, India, Japan, South Korea, Indonesia, and Australia, are experiencing rapid growth in online travel bookings due to increasing internet penetration, a burgeoning middle class, and a rising interest in international travel. The region is highly diverse, with varying levels of digital adoption and travel preferences across different countries. In March 2024, the Chinese government unveiled a Smart Tourism Development Plan aimed at integrating advanced technologies into the tourism sector, including AI, Big Data, and Internet of Things (IoT). It aimed to enhance the online travel booking experience and provide personalized travel services.
Online Travel Market Share
Booking Holdings and Expedia Group dominate the market with around 5% market share. Booking Holdings primarily focuses on the Online Agency Model (OTA), acting as an intermediary between travelers and travel suppliers. It earns revenue through commissions on bookings made through its platforms including Booking.com, Priceline, Kayak, Agoda, etc. Additionally, the company leverages a metasearch engine model for additional revenue streams.
Expedia Group utilizes a combined OTA and metasearch model. However, it might have a slightly higher focus on the metasearch model compared to Booking Holdings. The company’s brand portfolio includes Expedia.com, Vrbo, Hotels.com, Travelocity, and Orbitz. It leverages industry-leading technology, including AI predictions and virtual conversations.
Online Travel Market Companies
Major players operating in the online travel industry are
- American Express Travel
- Booking Holdings
- CheapOair
- EaseMyTrip
- eTraveli Group
- Expedia Group
- Kiwi.com
- Orbitz
- Sabre Corporation
- Trip.com Group
- Webjet Limited
Online Travel Industry News
- In May 2024, The Singapore Tourism Board launched a digital marketing campaign promoting online travel platforms and digital travel services to attract tourists from neighboring countries. The campaign has led to a 20% increase in tourist arrivals and boosted bookings on local travel websites.
- In May 2024, The U.S. Department of Commerce launched grants to support travel tech innovations, focusing on enhancing mobile travel solutions and integrating AI for better user experiences. This initiative aims to boost the competitiveness of travel tech firms based in the U.S. in the lobal market.
The online travel market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) from 2021 to 2032, for the following segments
Market, By Services
- Transportation
- Airline
- Car rental
- Rail
- Cruise
- Bus
- Accommodation
- Tour packages
Market, By Mode of Booking
- Online travel agencies
- Direct travel suppliers
Market, By Platform
- Mobile-based
- Web-based
Market, By Traveler
- Leisure
- Business
Market, By Application
- International booking
- Domestic booking
The above information is provided for the following regions and countries
- North America
- U.S.
- Canada
- Europe
- UK
- Germany
- France
- Italy
- Spain
- Russia
- Rest of Europe
- Asia Pacific
- China
- India
- Japan
- South Korea
- ANZ
- Southeast Asia
- Rest of Asia Pacific
- Latin America
- Brazil
- Mexico
- Argentina
- Rest of Latin America
- MEA
- UAE
- South Africa
- Saudi Arabia
- Rest of MEA
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