E-travel market to reach $15bn by 2023
Currently, the online travel sector only accounts for 5 per cent of the total GCC travel market compared to the global average of 12 per cent.
Times News Service
MUSCAT: The online travel market in the Gulf Cooperation Council (GCC) countries is expected to reach US$15 billion by 2023, according to Mena Research Partners, a leading research company in the Middle East. The growth marks an increase of 140 per cent from its current levels.
Annually, the GCC e-travel market is projected to grow by 20 per cent during the period 2019-23. The online travel market growth rate is well above the conventional travel market which is progressing at 4 per cent per year.
Compared to global figures, the online travel market in the region remains untapped. Presently, the online travel sector only accounts for 5 per cent of the total GCC travel market compared to the global average of 12 per cent. Potentially, this could mean a boom in the etravel industry which may log in 2.5 times growth.
Anthony Hobeika, Chief Executive Officer at Mena Research Partners (MRP), says: “Demographic changes and changes in consumer preferences are largely shaping the upsurge of the e-travel market. The growth in the e-travel sector is expected to come from the larger number of young and tech savvy travellers who embrace the digital ecosystem to plan and book their journeys.”
“These travellers have high expectations, demand personalised offers and do extensive online research before purchasing. MRP’s estimate shows millennials at 20 million, accounting for a massive 40 per cent of the GCC population, which further indicates a growth in expected demand by this segment,” he added.
The advanced digital infrastructure in the region is another driver for growth and a key catalyst as the region embarks on long-term advancement from its current low e-travel activity base. The Internet connectivity rates in the GCC have crossed 90% in countries like UAE and Bahrain, while rapidly expanding in other demographic heavyweights like Saudi Arabia.
Along with high connectivity, smartphone penetration in the GCC stands at more than 75 per cent, a number which is among the highest in the world.
Smartphones are the most popular devices for researching travel offers and online information, and the mobile travel market is expected to further expand the digital travel space in the GCC.
As a result of the digital infrastructure, the travel industry is undergoing massive changes, and the consumer appetite has changed from offline to online booking. The online travel industry and evolving new technology enable consumers to complete all the tasks related to their trip using just a single platform — from checking price and availability to booking the flight ticket and making the reservation for the hotel, car rental, and even holiday experiences.
Such meta-search engines save both time and money for consumers and provide them with the best deal through an aggregation of data. The trend towards personalisation is repeated on these metasearch engines through content, reviews and service offerings, providing convenience while addressing consumer demand.
The online travel market is expected to become a key component of the overall tourism ecosystem in the GCC due to the shift in the digital landscape. Travel brands are seizing new digital opportunities to engage with their consumers and the rapidly growing young segment of the GCC population.
Moreover, governments in the GCC are promoting tourism in the region and have identified tourism as a fundamental part of their long-term visions for economic growth. The emphasis on tourism and diversification away from hydrocarbons will also drive the e-travel market size, both from leisure to business travel as well as foreign and domestic travel.
The region is expected to increasingly monetise its tourism potential as part of the diversification of the economies.
Dubai’s ambition to attract 20 million visitors by 2020 is firmly on track while Abu Dhabi has launched new cultural and leisure attractions to draw visitors to the capital.
In 2018, Saudi Arabia announced it would issue tourist visas for the first time. This initiative is a direct consequence of Saudi Vision 2030 which has identified tourism as one of the most promising aspects of the country’s diversification efforts — in addition to religious travel.