New studies suggest the business of online travel bookings will grow enormously over the next decade.
Amid a boom in mass tourism, the global online booking industry could see a 12.6% compound annual growth rate during this time, according to the market research firm IMARC Group. Their study estimates a market size of $512.5 billion last year and an eye-watering $1,267.1 billion by 2032.
An even higher forecast from Custom Market Insights (CMI) predicts a market worth $1,589.1 billion by the same year and with the same growth rate.
According to the IMARC study, accommodation bookings is the largest factor in this boom, and growing Internet presence around the world is the primary driver of the market. But there’s bad news for aggregator booking sites like Expedia (and retailers alike): direct supplier bookings for flights and hotels dominates.
Both studies show that smartphones – and the rise of ‘mobile first’ travel platforms -- are growing the market. As well, CMI notes that flexible booking options are a “crucial” driver of growth. The use of Artificial Intelligence and Virtual Reality devices such as chatbots and virtual tours are helping to boost online booking popularity.
In a story on Open Jaw, Phocuswright also highlights the growing dominance of online travel, projected to expand at almost 10% between 2023 and 2026. Like the other two reports, Phocuswrite attributes the digital shift to evolving consumer behavior, improved digital infrastructure, and technological advancements. The report predicts that by 2026, online bookings are expected to account for 65% of all travel bookings globally, up from 61% in 2023.
North American travellers and those aged 32 to 43 lead the online booking market, according to IMARC Group, whose study was reported in today’s Globe and Mail. North American tastes are trending toward experiential and adventure travel such as outdoor trips, notes CMI, with a growing interest in eco-friendly accommodations. Subscriptions and loyalty programs are also on the rise, according to the report.
While all three studies show a boom in online delivery, none discusses the overall growth in the travel industry over the next decades. Will OTAs continue to grab market share from their brick-and-mortar cousins? This important factor is not addressed.
And it’s not all rosy for online travel platforms: Price wars will continue to haunt the industry, according to the CMI report. And cybersecurity is a serious threat, now and in the future. Concerns around hacking, theft of customer information, and disruptions in service pose a significant threat to the reputation of online bookers and their ability to function, the report suggests.
