Global Travel Services Industry Analysis
The global travel and tourism sector continues to witness strong growth in both international and domestic segments, reports Global Industry Analysts. The business travel sector topped recovery expectations following the 2009 recession. However, growth is being slowed by political and economic tumult in Africa, the EU and the Middle East, reports Euromonitor International. Growth in other regions, such as Latin America and Asia Pacific, should help to offset the latter. The industry has also witnessed expansion through re-investment of revenue in new services.
Global demand for travel insurance declined due to the economic recession and falling levels of disposable income, reports IBIS World. Market growth rebounded in 2010 partly due to consumer awareness as to the risk of flight delays and cancellations, which saw more travelers opt for insurance to recover losses incurred. Over the next five-year period, the global travel insurance sector is forecast to continue recording strong growth and should see leading companies venture into niche markets such as those represented by business travelers and students.
A key market of part of the travel services market is the car rental industry.
Regional Market Share
Europe’s online travel market witnessed a 20% increase in online bookings between 2010 and 2010, according to research from yStats. The UK is forecast to retain the largest market share in 2013, with Germany and France in second and third place, respectively. Expedia recorded the strongest number of single visitors in the EU in 2011, with Priceline recording the second-highest number in the same year. Over 50% of UK travelers bypass travel agents in favor of booking online firsthand. Similarly, over 50% of internet users availed of online travel and accommodation services in 2011. Italy’s online travel market represented almost 50% of bookings.
China has the biggest internet user base worldwide, with more than 450 million users, or equivalent to almost a quarter of the world’s internet users. NetScribes reports the Chinese online travel sector saw more than 35% yearly growth up to 2012. Market growth is driven by rising internet usage and an expanding base of mobile internet subscribers, recording 45% yearly growth. Online travel booking will continue to be driven by an expanding middle class, rising levels of income and a base of credit card holders that has been recording close to 25% yearly growth. A growing tourism industry, evolving consumer lifestyles and a loosening of visa-related constraints on Chinese travelers will continue to boost the travel services market. Outbound travel witnessed yearly growth of almost 17% up to 2012. Factors that may slow growth include a lack of automation and increasingly stiff competition among market leaders. Legislation concerning foreign-invested travel agency also continues to prove an obstacle for foreign outfits. Legislation concerning foreign-invested travel agencies has limited the entry of foreign travel outfits into China’s domestic online travel sector. The country’s online travel industry is expected to see leading players focus on expanding existing ranges of service and avail of online communities to promote business.
