by Jim Pratt
Emerging markets around the world continue to present growth opportunities for players in the travel industry. Technology is the key driver, as the availability and adoption of mobile and online tools are making it easier for both domestic and international consumers to participate in the marketplace. What’s more, travel suppliers have access to data that’s helping them understand regional consumers and offer them the types of services and value they’re looking for.
All in all, emerging markets are living up to their description: as their economies develop, they’re emerging as significant focus areas for industry suppliers. Here are some high level insights, courtesy of Phocuswright’s Global Online Travel Overview Fourth Edition, that demonstrate the burgeoning consumer power in emerging markets:
- The global travel market is expected to grow about 5% through 2017
- From 2014 to 2017, developed online markets will grow 15% and emerging online markets will grow 61%
- Europe leads all regions in online travel penetration and APAC leads in emerging markets
Let’s take a look at the 3 emerging markets represented in SKIFT’s 5 Key Travel Markets to Watch for Online Booking Growth, which is based largely on data from Euromonitor International and their proprietary Digital Consumer Index:
Across all of travel, 54% of all online travel sales in 2015 were executed via a mobile phone or tablet. For the first time in 2015 Chinese consumers made more digital purchases through a mobile phone than a personal computer. Mobile-first travel bookings look set to keep growing.
Data from iResearch shows that in Q2 2016, China’s online travel gross merchandise volume (GMV) was 143.01 billion Yuan, up 8.9% from the previous quarter and soaring 31.3% from a year earlier. Here’s the breakdown of services purchased online in Q2 2016:
- Airfare: 57.2%
- Hotel reservations: 20.2%
- Online vacations: 17.4%
- Other (e.g. car rental) 5.2%
The most digitally connected population today is also preparing to welcome the world in 2018 to the Winter Olympics, putting them in an excellent position to grow through travel. The country’s tech-savvy culture is practically unparalleled, with 99% of the population using broadband connections. The potential impact on travel-related purchasing activity is significant. South Korea’s highly developed telecom environment is helping online travel agencies and suppliers make the most of today’s digital travel trends. Learn more in Forbes’ Meet The World’s Most Connected Population And Future Home For Digital Commerce Growth
United Arab Emirates (UAE)
The travel industry is driving economic growth in the UAE, which is predicted to see growth in digital commerce. The World Economic Forum’s The Travel & Tourism Competitiveness Report 2015 forecasts that the travel sector will generate approximately 1.8% or 5,250 new jobs in the country.
The UAE takes 24th place globally on the World Economic Forum’s Travel and Tourism Competitiveness Index and it is ranked 16th in ICT readiness, which measures “enabling environment” indicators related to infrastructure and capabilities for using online services.
Aside from being the most tourist-friendly nation in the region, the country is geographically positioned as a gateway for Europeans traveling to Africa, the Middle East and Asia. Skift notes that the country’s major airlines—Emirates, Etihad, Flydubai, and Qatar Airways—have recently made investments in their online sales platforms to boost direct online bookings, demonstrating a positive outlook for eCommerce.
For related insights into more countries, check out Around the World in Travel Trends: International Booking Preferences.