Online Travel Market

Higher mobilization rate amongst people to drive market growth

The growing consumer awareness in developing countries is expected to fuel growth in the online travel market. Growth is steady in countries with an existing consumer database; however, more growth is expected in regions with many untapped consumers. With the market penetration of IT and the internet, market revenue is expected to reach new heights. Another factor is the increase in the number of international students who opt to study in international colleges to gain more exposure. For instance, more than 1.1 million students from India were studying in 85 other nations as of January 2021.

According to official statistics from the Higher Education Statistics Agency, the United Kingdom was home to over 605,130 students from backgrounds outside the country. In 2021, it was estimated that more than 30% of international students were of Chinese descent.

Increased disposable incomes across various demographics contribute significantly to the expansion of the Global Online Travel Market Industry. As individuals and families experience improved financial conditions, they are more inclined to spend on travel-related services. This trend is particularly evident in emerging economies, where a growing middle class seeks leisure and adventure travel opportunities. The market's growth trajectory suggests that by 2035, it could reach 1099.7 USD Billion, indicating a robust demand for online travel services as consumers prioritize travel experiences.

The Global Online Travel Market Industry experiences substantial growth driven by rapid technological advancements. Innovations such as artificial intelligence, machine learning, and mobile applications enhance user experiences and streamline booking processes. For instance, AI-powered chatbots provide 24/7 customer support, improving service efficiency. The integration of augmented reality in travel planning allows potential travelers to visualize destinations before booking. As a result, the market is projected to reach 658.4 USD Billion in 2024, reflecting the increasing reliance on technology in travel planning and booking.

The Global Online Travel Market Industry is witnessing a pronounced shift towards online booking platforms, driven by consumer preferences for convenience and accessibility. Online travel agencies and direct booking websites offer competitive pricing and user-friendly interfaces, making it easier for travelers to compare options and make informed decisions. This trend is further supported by the proliferation of smartphones and internet access, allowing consumers to book travel services anytime and anywhere. As this shift continues, the market is expected to grow at a CAGR of 4.77% from 2025 to 2035, underscoring the importance of digital platforms in the travel sector.

Growing awareness of environmental issues influences consumer behavior in the Global Online Travel Market Industry, leading to an increased focus on sustainable travel options. Travelers are becoming more conscious of their carbon footprints and are actively seeking eco-friendly accommodations and transportation methods. This shift is prompting travel companies to offer sustainable packages and promote responsible tourism practices. As sustainability becomes a priority for consumers, the market is likely to adapt, potentially driving growth as companies align their offerings with these values, thus enhancing their appeal to environmentally conscious travelers.

The expansion of global connectivity and infrastructure development plays a crucial role in shaping the Global Online Travel Market Industry. Improved transportation networks, such as new airports and high-speed rail systems, facilitate easier access to various destinations, encouraging travel. Additionally, the rise of low-cost airlines has made international travel more affordable, further stimulating demand. As infrastructure continues to develop, it is anticipated that the market will experience sustained growth, with projections indicating a potential market size of 1099.7 USD Billion by 2035, reflecting the increasing accessibility of global travel.

By Region, the study provides market insights into North America, Europe, Asia-Pacific, and the Rest of the World. The Asia Pacific online travel market is expected to grow at a significant CAGR during the study period, accounting for USD 451.93 billion in 2021. Increased spending power and higher living standards are major factors attracting people to the travel & tourism sector, fueling regional online travel market growth.

Furthermore, regional economic growth, the convenience of travel restrictions, growing competition, and aggressive promotion techniques used by the sector's involved players have significantly encouraged and accelerated the group travel business, which is expected to accelerate the online travel industry growth over the assessment period.

Moreover, the major countries studied in the market report include the United States, Germany, Canada, France, the United Kingdom, Italy, Spain, India, Australia, Japan, South Korea, China, and Brazil.

Figure 3: ONLINE TRAVEL MARKET SHARE BY REGION 2021 (%)

Source: Secondary Research, Primary Research, Market Research Future Database, and Analyst Review

The European online travel market is the second largest in the world due to increasing income levels across the region, an enhanced business environment in European nations, and government initiatives to encourage tourism and travel activities. Besides, there is a high demand for travel tourism because Europeans enjoy exploring new areas. Moreover, this region's growing number of independent/solo travelers and the expanding number of online travel agencies are expected to fuel growth during the forecast timeline.

Further, the Italy online travel market held the largest market share, and the German online travel market was the fastest-growing market in the European region.

The North American Online Travel Market is anticipated to expand at the fastest CAGR from 2022 to 2030, with the United States leading the regional market share. The dominance of this region can be attributed to its strict licensing laws, higher travel and tourism expenditures, extensive use of digital media, and higher consumer spending power. The increase is expected to be fueled by an increasing number of international students who prefer to continue their education in the United States. Canada is becoming a popular destination for international settlers looking to relocate to another country.

The Canadian government has made significant investments to encourage more migrants to settle there, which serves as a revenue-generating factor for expanding the regional market.

The major players in the online travel market have implemented various developmental strategies to grow their market share, boost profitability, and maintain market dominance. Online travel industry players are releasing new and improved mobile applications that entice young travelers with amazing travel deals and hassle-free booking. Most young travelers also prefer booking their travel online via a mobile device due to its usability, comfort, and accessibility. Market players are increasingly providing travelers with a wide selection of hotels at affordable prices. Customers compare accommodation options across various websites to find the best deal.

Key industry players rely on strategies like introducing new services and company expansion to grow their market shares and stay in the spotlight in the online travel booking sector. Furthermore, leading online travel booking companies focuses on aggressive promotional activities such as advertising online & television (TV), billboards & sponsorships, social media, and other promotional strategies.

Thomas Cook Group PLC (UK) is an online travel agency that provides package holidays, hotel-only stays, city breaks, and other services to destinations worldwide. In October 2020, Thomas Cook and Accor, a leader in augmented hospitality, entered into a partnership. The companies would launch Holiday Safe together as part of this collaboration. The launch would focus on reassuring customers with comprehensive health and safety protocols incorporated through Thomas Cook India, SOTC's Assured Safe Travel Program, Apollo Clinics, and Accor's Cleanliness and Prevention ALLSAFE label established with and vetted by Bureau Veritas.

Also, Expedia Group Inc (US) operates as an online travel agency. It offers a wide range of services, such as reserving hotel rooms, airline seats, rental cars, and other destination services via its travel partners. These services are provided under several brands, such as Expedia.com, Vrbo, Hotels.com, Hotwire, Orbitz, CheapTickets, ebookers, CarRentals.com, Travelocity, Expedia Partner Solutions, and Wotif Group. Expedia Group provides customer service through call centers, private label companies, alternative distribution channels, and mobile bookings. The company also operates in the advertising and media industries and the travel management sector.

Expedia and Qtech Software announced a partnership in April 2022 to provide high-quality hospitality and technology content to business travelers.