BOTH travel and online markets are dynamic growth areas and Euromonitor International is anticipating that travel internet retailing is set to go far with online transactions playing a much larger role across almost all key Asia- Pacific tourism markets in the short-, mid- and long-term.
However, internet usage rate from country to country varies significantly, representing a negligible share of tourism in some markets, but rising rapidly in other markets to take a larger than 30 percent share of total travel retail value sales, according to Euromonitor International.
The number of Internet users will exceed one billion in 2006, with almost 20 percent year-on-year growth from 2001 to 2006.
Euromonitor International is a provider of international market intelligence on industries, countries and consumers.
The online travel market exceeded US$100 billion in 2006, with over 250 percent growth between 2001 and 2006. Global online shopping expenditure was US$223 billion in 2006 with 38 percent from travel and tourism, said Parita Chitakasem, account manager, travel and tourism, Euromonitor International.
There are many reasons for this, one being that there is 24-hour access and with less overhead costs, there is competitive pricing for consumers.
Said Chitakasem, who was at the Travel Distribution Summit Asia 2007 held recently in Singapore, “The USA is the pioneer of internet sales with leading online travel retail markets driven by international presence of Travelocity, Expedia and ebookers. South Korea has also caught up with using the Internet for research and holiday planning.”
The USA raked up US$56 billion in online retail travel sales, with 20.6 percent rise from 2005. UK comes in at second place with US$13.9 billion and 31.5 percent rise from the previous year.
Said Chitakasem, “In other markets, package tours dominate Japanese travel retail, whereas in Taiwan sales of flight tickets dominate. In Thailand online travel retail sales is driven by the expats.” Factors that affect retail online sales are government support, which plays a crucial role in country’s internet development; the growth of the urban population to drive internet usage; credit card penetration as credit cards account for over 90 percent of payment method for online business and education; and strong links with education levels and internet usage.
There emergence of the “silver surfers”, the aging population with higher disposable income, is likewise a factor. In Denmark, 27 percent of over 70 year olds now have internet in their home.
In UK, baby boomers have contributed to growth. This trend also extends towards the young with 15 to 20 year olds as the heaviest users by 2010. By 2010, bookings online will spiral upwards prompted by 14.3 million departures, 205 million internet users, 46 million cards in circulation, the urbanites making up 30 percent of the population and 271 percent growth in online travel retail. Thus also by 2010 online retail sales will hit US$209 billion and double-digit growth to be sustained throughout the next four years. In Asia-Pacific, about 89 percent of growth in online retail sales to hit US$24 billion by 2010, while the global internet travel retailing will reach US$209 billion representing 30 percent of the total global travel retail market.
“The global internet` retail market will grow by 22 percent year-on-year between 2006 and 2010,” Chitakasem said.
