SaaS Travel Industry
The online travel industry can trace its roots to American Airlines in the late 1970s. It has grown from the SABRE (Semi-automated Business Research Environment) system, which was developed to automate booking reservations to, to a sprawling industry worth billions of dollars.
Expedia, Yahoo Travel, Booking.com, Justfly, and Priceline, makeup just a few of the companies vying to establish themselves at the top of the digital travel industry.
In 1999, before the internet became truly globalised, the Travel Industry Association of America reported that 15.1 million people in the United States booked their travel arrangements online. Worldwide digital travel sales surpassed $533 billion in 2015, a 13.3% increase from 2014, and that number is set to grow again this year. It may shock you a little to discover that, 17 years later, despite the massive growth of the internet, more than half of all travel bookings are still made offline – either over the phone or through retail travel agents.
However, the online travel industry is set to continue to grow rapidly over the next few years. It has been estimated that by 2020, the highest percentage of total sales made by online payments will be held by the travel industry (see fig. 1). This growth can be attributed to the growth of the travel industry in general, with developing countries like China and India housing an ever expanding middle class, the amount of disposable income that these countries as a whole can spend on travel is set to skyrocket over the next decade.
Of the many travel sites that have benefitted from the meteoric rise of the internet over the last decade, Justfly has been one of the more recent success stories. JustFly is the fastest growing online travel company in the US, whose exponential rise can be attributed, at least in part, to their drive to stay ahead of the curve in providing modern technological benefits with a human touch.
The fact that over half of bookings still occur offline, can give us an insight into the public desire to deal with people rather than booking sites, when it comes to travel arrangements. Sites like Justfly or Expedia, who combined the best of modern technology, along with a human component seem to be enjoying the most success. Although some airlines have attempted to lessen the impact of these middle-men, they are fighting a losing battle. Michelle Evans, the digital consumer manager at Euromonitor, commented recently that online travel agencies are leading the overall growth in online and mobile travel bookings, though there has been some growth in direct bookings for hotels and lodgings.
Co-founder of ComScore, a U.S. Internet analytics company, Gian Fulgoni did suggest that airlines have been doing more to hold onto revenue that hotels, since branded travel sites have more to lose from receiving bookings through OTA’s (Outside Travel Agencies).
In contrast to the earlier statistic, that over half of all bookings are still made offline, a 2015 report by CNBC, suggested that 7 out of 10 people using the internet in the US were visiting travel sites. So, how do we account for this gap in the statistics? People are using the internet to find and compare prices, and many of them will then go to more traditional methods of booking to finalise their arrangements. Why else would sites like Expedia and Justfly place such a high value on the need for a human element to travel booking? Justfly’s entire matra is built on combining a team of travel experts, with their “efficient and technologically bullet-proof platform”.
Add all this to the fact that TripAdvisor garnered substantially more internet traffic (14.5% share of the market) this year, than any other travel site, the stats suggest that we are becoming smarter consumers. We are learning to take all aspects of the travel industry, both digital and human, and combine them to help us to find the best prices for our travels. As Gian Fulgoni put it, “The Internet has put pricing power in the hands of the consumer“.
Sponsored by Justfly
By Josh Hamilton
