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Battle For Online Business

Internet distribution is hotting up with direct channels, OTAs and Google stepping up its travel profile – but travellers look set to reap the benefits.

Domnic Ellis

Global online travel bookings topped $638 billion last year, driven primarily by rising mobile penetration and functionality, growth in ‘affordable travel’ and ongoing expansion of developing markets. The bar chart looks as sharp as a plane at take-off , with the online travel market recording a CAGR of 10.9 per cent and likely to top $831 billion by 2021, according to Phocuswright data.

What isn’t changing as much are the pie charts, with APAC, US and Western Europe accounting for the largest slices now – and likely to in three years. For all its geographic size and busy skies, you’re reminded LATAM and Middle East remain small sectors globally. The data was shared at the recent WiT Dubai conference, returning to the city after a four-year hiatus.

While the breadth of the global segments is apparent – split between airlines, hotels, private accommodation, activities, rail and ‘other’ – it’s telling that the Middle East is skewed towards airlines (66 per cent), LCCs (6 per cent), lodging (26 per cent) and car (2 per cent). Sectors such as rail and activities aren’t even on the starting blocks in the region yet, illustrating the opportunities.

Despite these drawbacks, the Middle East remains in the box seat when it comes to tech and leading OTAs are reaping the bene ts of its young digital-savvy populations.

For Wego, which chalked up 60 per cent global revenue growth last year, MENA now accounts for more than half its business – it now has 1,000 travel partners – while Cleartrip has broadened its reach after buying Saudi-based Flyin. The GCC online travel market is expected to reach US$15 billion by 2023, according to MENA Research Partners.

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May - June 2019