The whole process of making travel reservations has been digitalized thanks to technological advancements in the tourist sector. Nowadays, more travelers utilize internet services to arrange their vacations since they believe it to be a simple and convenient procedure. The rise of the tourist and hospitality industries has been driven by the internet procedure. As a result, internet travel firms are crucial to the tourist sector.
Impact of Covid-19
The 2020 coronavirus pandemic has had a significant economic impact on nations all over the world. Global activities came to a standstill as a result of the government's tight quarantine procedures and the closure of all unnecessary firms. One of the virus' most profound effects was on the travel and tourist sectors as most nations went into lockdown and faced harsh travel restrictions that made it difficult for people to move about. As a result, several sectors, including aviation, railroads, hotels, and tourism, experienced significant setbacks. The epidemic had a significant impact on the industry for internet travel agencies as well. The top seven publicly traded online travel businesses would lose at least $11.5 billion in income this year as a result of the virus, according a Skift Research piece.
Travelers in the market for online travel agencies like transportation services more.
The transportation service is the most popular service category among travellers. There is a significant demand for transportation services. Some transportation services, including vehicle rentals and bus travel companies, are in high demand since many people use them on a regular basis. In addition, the tempting deals and incentives from the transportation providers entice customers to utilize these online services more frequently. Last but not least, compared to tour/vacation packages or lodging, transportation services have a larger customer base because demand is only created when there is a need.
The market for online travel agencies will see a significant increase in travellers of the Millennial generation and younger age groups.
The number of visitors between the ages of 15 and 25 and 26 and 35 is anticipated to increase dramatically. Young and middle-aged individuals like exploring new locations, learning about new things, and travelling for enjoyment and leisure. In addition, young adults and members of the millennial generation are digitally savvy. They therefore frequently schedule their transportation and travel using internet platforms. Aside from this, members of the aforementioned age range frequently migrate across regions for job and education. The internet travel firms assist clients in making reservations and taking advantage of services at reasonable prices as they look for cost-effective travel and lodging options.
Demand for all forms of payment is generated in the market for online travel agencies by cashback offers, schemes, and ease of payment.
All payment methods will be equally preferred in terms of payment methods. The ease of use and speed of transactions made possible by online payment methods make them a popular choice. Travelers prefer UPI transactions in particular because they can book their services with just one click. In addition, e-wallets like Upi provide prizes and discounts for regular payments or for reaching a specific threshold, whilst credit and debit cards produce points that may be exchanged for cashback or credit toward other services. As a result, all payment methods are in great demand in the market for online travel firms.
The goal of the online travel agency is to sell travel services on digital channels. Online travel firms have grown significantly during the past several years. The tourist business has undergone a transformation thanks to the rise.
Online travel agencies may offer their own direct services through an online platform or act as a middleman between customers and travel and booking firms. The goal of these online travel firms is to provide booking services online, from the moment of service selection through the point of sale. Travelers may use online services to organize their trips, and online portals offer various services, including pricing comparison, cost prediction, lodging information, destination data, transit options, and even tour packages. In the meanwhile, internet travel agencies work to give their clients a simple, quick, and comfortable option to make reservations.
The evolution of online travel companies has gone through several stages in order to improve operational efficiency. Rising income levels among individuals are one of the primary drivers of the expansion of online travel firms. The increase in disposable cash gives passengers the chance to take international trips. The reach of online travel agents is extensive and widespread. To increase and broaden the range of services they provide to avid travellers, online travel firms implement new methods and improve technologies.
In 2020, the global market for online travel agencies had grown at a compound annual growth rate (CAGR) of -3.5% since 2015. Its worth was close to $460.9 billion. The market for online travel agencies grew at a 15.1% CAGR from $453.9 billion in 2020 to $775.1 billion in 2025. The global COVID-19 pandemic, which caused significant travel restrictions in the majority of nations, is mostly to blame for the decline. As a result, numerous sectors, including aviation, railroads, hotels, and tourism, experienced significant setbacks. In 2032, the market for online travel agencies is anticipated to reach $900.15 billion, growing at a CAGR of 15.8% from 2032.
Solo travellers have grown significantly over the past few years, and for very specific reasons. Travelers go on vacation for pleasure, and amusement, and to engage in outdoor pursuits like skiing, hiking, and other winter sports. Social media is also having a big influence and drawing a lot of people to go to different places. Bookings made through online travel agents have increased along with the increase in persons participating in these activities. Online travel firms offer a comprehensive itinerary as part of vacation packages or assist customers in making travel, dining, and lodging reservations over the phone or with other technology.
In some areas, social and political unrest has an impact on the travel and tourism sector. Even if they may get travel services at low costs, customers choose to stay away from these locations that are prone to conflict. The governments of various countries have also issued warnings for tourists to stay away from places where there are diseases or social/political instability. This restricts the availability of internet travel reservations to certain nations, which has an impact on the market's sales.
Major players profiled in the study include Expedia Group, Ebury Partners UK, Fareportal, Hostelworld Limited, Hurb Co S/A, HRS, MakeMyTrip, Oracle Corporation, Priceline, SABS Travel Technologies, Tavisca Solutions, Thomas Cook India, travelomatix.com, Trip.com Group, Tripadvisor, WEX. among others.
- Expedia Group just revealed an Open World Technology platform for 2022. Technology is created for partner organisations. The platform is ideal for the agency looking to launch a new online travel business since it includes a comprehensive ecommerce suit, with several blocks including payments, chatbots, services, and fraud detection.
Online Travel Agencies Market Scope
|Forecast Unit||Value (USD)|
|Revenue forecast in 2028||USD 900.15 billion|
|Growth Rate||CAGR of 15.8 % during 2021-2028|
|Segment Covered||Service Type, Device Platform, Payment Modes, Regions|
|Regions Covered||North America, Europe, Asia Pacific, Middle East and Africa, South America|
|Key Players Profiled||Expedia Group, Ebury Partners UK, Fareportal, Hostelworld Limited, Hurb Co S/A, HRS, MakeMyTrip, Oracle Corporation, Priceline, SABS Travel Technologies, Tavisca Solutions, Thomas Cook India, travelomatix.com, Trip.com Group|
Key Segments in the global Online Travel Market
By Service Type, 2019-2029 (USD Billion)
- Vacation Packages
By Device Platform, 2019-2029 (USD Billion)
By Payment Modes, 2019-2029 (USD Billion)
- Debit / Credit Card
- Others (Vouchers, Discount Codes)
By Region, 2019-2029 (USD Billion)
- U. S
- Rest of Europe
- Rest of Asia Pacific
- Rest of South America
Middle-East and South Africa