On 9 March, Florence Kaci, European market specialist with travel research industry authority, Phocuswright, presented key findings from recent European traveller research on ITB Berlin’s eTravel Stage. At the conference, it was revealed that the global travel market is now at nearly US$1.3 trillion dollars, up substantially from $1.1 trillion just five years ago. But the story doesn’t end there. Innovation, demographics, and economic promise have caused record online travel gains. In less than 20 years, online travel has grown from nothing to more than $500bn in 2016. More than 40% of all travel is now booked online globally for leisure/unmanaged business travel.
In terms of online penetration, Europe is in the lead with nearly half of all travel booked online, followed by the US. But if you’re looking for growth – the next big wave – look no further than emerging markets, including China, India and Brazil. While developed markets make up three quarters of online travel revenue, they are projected to grow just 3% over the 2014- 2017 period. Emerging markets’ projection – 8%. And online emerging markets are expected to grow nearly four times as fast as developed ones.
What’s driving this growth?
We’ve all heard about millennials playing a key role in everything from the sharing economy, to hotel technology, to redefining loyalty. In three emerging markets, China, Brazil and Russia, millennials make up an inordinate percentage of the traveller population, compared to the US, France or Germany.
And in India, two in three holiday travellers are young adults. For many of these travellers, their first digital interaction with brands is happening via a smartphone – a major contrast with markets like the US and Europe. Developing markets such as China, Brazil and Russia lead in smartphone penetration. Asia, for example, far surpasses the U.S. and Europe in terms of mobile online bookings