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Online Agencies In Global Battle For Market ShareJune 2, 2011 By: George Dooley
In the global online travel market, online travel agencies definitely play second fiddle to supplier websites, says PhoCusWright research. Yet growth-seeking OTAs need not despair: as individual online travel markets mature, so does the online travel share booked via intermediaries, according to PhoCusWright's Global Online Travel Overview Second Edition.
Bookings via online travel agencies comprise just 37 percent of global online travel sales, versus 63 percent for suppliers, PhoCusWright says. The channel mix is not expected to change through 2010, although supplier websites, which represented two thirds of the global market in 2008, lost share during the global recession.
Online travel agency share is highest in the two largest online travel regions – the U.S. (41 percent) and Europe (37 percent). In contrast, younger, emerging travel markets tend to be more supplier-centric, with supplier-direct air bookings often dominating the online channel. OTAs represent less than 30 percent of online sales in the Asia Pacific and Latin American regions, PhoCusWright reports.
"Online travel agencies tend to benefit from high fragmentation and strong competition among travel suppliers," says Lorraine Sileo, vice president, research. "India is a great example. With a high number of brands competing in the domestic and international markets, New Delhi's MakeMyTrip had one of the most successful IPOs of 2010."
“Online travel agencies are growing rapidly in the Asia Pacific and Latin American regions, while growth in the U.S. and Europe has leveled off. Once online travel markets mature, there is little change in the percentage of bookings generated from the supplier-direct channel versus OTAs.”
PhoCusWright's Global Online Travel Overview Second Edition compares online travel bookings in four regions: Europe, the U.S., Asia Pacific and Latin America. The report features market sizing and growth forecasts through 2012 for the total travel market and the online leisure/unmanaged business category.
Despite cultural and technological challenges, more and more consumers prefer to book online and seek the opportunity to do so, PhoCusWright says.