COVID-19 has accelerated the need for companies in the travel and tourism industry to rapidly invest in digital strategies, including the global online travel market, which is expected to grow at a compound annual growth rate (CAGR ) by 8% to reach $765.3 billion between 2022 and 2025, according to GlobalData. The leading data and analytics company notes that due to more and more consumers shifting to e-commerce, if players fail to invest in a robust digital strategy, they will allow their competitors to take a bigger share of the market.
GlobalData’s latest thematic report, ‘Thematic research: Online travel (2022)‘, reveals that intermediaries are increasingly shifting from a high street presence to an asset-only online operation to meet changing consumer demand and keep operating costs low. The pandemic has reinforced the need to reduce physical contact and as a result, consumer behavior has changed, with customers now more likely to transact online. This trend was confirmed in a recent GlobalData* survey, with 78% of consumers saying they were “extremely”, “somewhat” or “slightly” concerned about visiting stores due to the risk of COVID-19.
Hannah Free, travel and tourism analyst at GlobalData, comments: “Due to the changing needs and demands of the modern traveler, travel intermediation has shifted from traditional high street shops with in-person travel agents to a highly fragmented online marketplace.”
According to the latest GlobalData* survey, 24% of consumers used an online travel agency (OTA) the last time they booked a vacation, and only 7% of consumers used an in-person travel agency in-store .
COVID-19 decimated the tourism industry in 2020 as travel all but came to a standstill, causing the value of the global online travel market to fall 60.1% year-on-year to $236.7 billion. dollars. The pandemic has hit businesses hard, halting operations, inducing weak consumer demand and creating additional costs, but many businesses have taken advantage of these unique circumstances to accelerate their digital transformation. Leaders implemented customer-centric technology solutions that addressed challenges presented by COVID-19, such as reducing physical interactions with customers.
Free concludes: “These solutions will better ensure survival in the post-pandemic recovery period. Perhaps the distinguishing characteristic of the leading online travel agencies is the integration and use of the latest technology, as some travel brands such as Airbnb and Trip.com refer to themselves primarily as technology companies. With this, personalization, big data, travel applications, artificial intelligence and machine learning are playing a major role in the strategies of online travel companies, with major players investing heavily in these areas to meet changing needs. consumers.
*GlobalData Q4 2021 Consumer Survey
*Information based on GlobalData report: ‘Thematic research: Online travel (2022)
Online travel, 2022 update – Thematic research: This thematic research report takes an in-depth look at online travel.
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