Travel eService Industry in the US, would you like to join?
The travel services sector is made up of a complex web of relationships between a variety of suppliers, tourism products, destination marketing organizations, tour operators, and travel agents, among many others. Today, I would like to talk about Travel e-Services industry in the big market — the US. We’ll take a look at the market definition and the potential to join.
1. Market Definition: What is e-Travel?
The e-Travel market is defined by the sale of online services and digital goods via the internet. The definition includes online travel bookings (package holidays, hotels and vacation rentals) and mobility tickets for services such as flights, long-distance bus tickets, train travel, car rentals and ride-sharing services. The ticket reservation or purchase can be completed on a desktop PC or via mobile devices (Smartphones or Tablets).
The definition of eServices does not include media content acquired online or the online sale of physical goods. Furthermore, no B2B segments are included, neither are revenues from online gambling, software downloads, and services, or commission fees of price/product comparison sites. (by Statista.com)
So now, what are the functions and features required for the website, application and/or software solution being developed?
in-scope:
According to the report by Statista.com, e-Travel in-scope are:
- Online travel bookings, including hotels, vacation rentals and package holiday
- Flights, long-distance travel or cross-regional travel by train or bus tickets that are booked online
- Car rental hires that are made via the Internet
- Travel deals booked via online travel agencies (e.g. Expedia) or directly from a tour operator (e.g. TUI, Thomas Cook)
- Ride-sharing services like Uber, Lyft or BlaBlaCar
out-scope:
- Price comparison and recommendation websites without a check-out process
- Offline and telephone bookings/reservations
- Non-commercial air traffic
- Tickets for public transport, within the city, or other local travel
2. Market Segments
The e-Travel market segments contain 2 main markets:
First: Online Travel Booking:
The “Online Travel Booking” segment contains package holidays, hotel stays and private vacation rentals that are booked via the Internet. Users represent the people who placed the bookings, independent of the number of travelers. Well-known providers of package holidays are online travel agencies such as Expedia and Opodo and tour operators such as TUI and Thomas Cook. Specialized providers of hotels and private accommodation booked online are, for example, Hotels.com, Booking.com, and Airbnb. The sub-segments: Package holiday, Hotels, Vacation Rentals.
Second: Mobility Services:
The “Mobility Services” segment includes flights, ride-sharing services, long-distance bus travel and train tickets that are booked online as well as car rental hires that are made via the Internet. These services are booked directly via the website of the service provider or via online travel agencies. Users represent the people who have booked tickets, independent of the number of travelers listed on each booking. The sub-segments: Flights, Car Rentals, Train & Buses, Ride-Sharing
3. What Are Numbers Tell You?
Revenue
According to the report by Statista, let check some number. Firstly I would like to show you the number of revenue eTravel industry. In 2018, revenue in the eTravel market amounts to US$228,831m. Mobility services are the largest segment with a market volume of US$138,126.6m in 2017 and US$148,764m in 2018 (double Online travel booking).
About Mobility services, the revenue come from Flights Booking services:
The average revenue per user (ARPU) in the Online Travel Booking segment is lower than Mobility services.
Global Comparison Revenue
Compare with global, the most revenue is generated in the United States, about US$228,831m in 2018. And after is China with market amounts to US$137,383m.
4. Who Will Pay for eTravel Services?
Millennials as the youngest generation with disposable income, they have secured their status as leaders in travel and tourism. Follow the report by Vicki Gelfel- Research Advisor (AARP.org), Millennials anticipate taking significantly more trips in 2017 than GenXers or Baby Boomers and are more likely to travel abroad than are GenXers. Domestic travel motivations also differ somewhat by age, Millennials and GenXers are more open to Weekend Getaways than are Boomers. But they more likely to set a budget for their trips and are more likely to have been impacted by the cost of rising airfares.
Overall view, the travel by generation:
4.1. Planning Resource
Trip Advisor is a consistent top resource for reviews and booking. Millennials (48%) also favor Yelp for reviews more than GenXers (26%) and Boomers (25%). Boomers (37%) will utilize specific airline sites for booking more often than Millennials (22%) or GenXers (25%).
While Facebook is definitely the social media leader, 43% of Millennials and 22% of GenXers also turn to Instagram for trip planning/inspiration, more than Boomers at only 4%.
Although almost half of the Boomers (49%) report no challenges while trying to plan an upcoming trip, for those who do, budgeting tops the list. With budgeting being a bigger issue for Millennials (27%) and GenXers (21%) compared to Boomers (15%)
4.2. Impact of Social Media
Millennials and GenXers, across the board, are significantly more influenced by and provide feedback through social media compared to Boomers. Millennials will tap into social media to find out what’s going on more so than any other outlet and at a much higher rate than Boomers.
5. Conclusion
eTravel market is the big part of the travel industry. With the growth of market revenue and travel demand increased, the US is the big market for travel services. I hope my article can help you have an overall view of this industry. Send me a click “like” for giving a motivation that I can share more articles.
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References:
AARP.org, Survey & Report by Vicki Gelfel — Research Advisor and Patty David — Sr Research Advisor
