Is There A Ceiling On Digital and Mobile Travel Bookings?

Digital and Mobile Travel Bookings

Since the early 2000s, the travel industry has been overwhelmed by the rise of online and mobile booking. Up to now there was suggestions that traditional travel agents could be pushed completely out of the market by OTAs (Online Travel Agencies), but there was hope that their personal approach would be sought out by customers who wanted a human touch to their booking process – for comfort, advice, or simply peace of mind. However, the rise of OTAs that pride themselves on the human element of their digital business (such as Expedia) have made huge inroads into these markets whilst digital and mobile sales have been consistently growing their market share. So is this a trend we expect to see continue? Or will the digital travel industry hit a sales ceiling?

According to a brand new report by the researchers at eMarketer, mobile travel bookings could soon become the predominant method of booking travel in the US. The latest forecast suggested that digital sales are expected to reach $189.6 billion in 2017, with 40% of those sales coming via mobile – up 4% from 2016. Chris Bendtsen, eMarketer forecasting analyst, commented that

Last-minute travel deals are helping to drive mobile sales, as consumers opt to book right away via their smartphones… Consumers are booking more travel on mobile due to larger smartphone screens, easier mobile payment methods, and overall habits shifting to mobile. Also, airlines, hotels, and online travel agencies have made both apps and mobile websites easier to use.”

Mobile Travel Bookings

By 2021, they have projected computer and mobile bookings to take an equal share of digital travel bookings, so it seems there is no end in sight to the growth of mobile. On top of that the giants of the OTA world are expected to continue to grow their share of the global travel market. Argus analyst John Staszak has predicted that Expedia’s global market share for travel bookings could rise from 6% in 2016 to 9% by 2020.

Matt Keezer, CEO of VC firm Momentum Ventures, has been pushing to establish companies who can successfully integrate digital bookings with a more human and personal feel. Having already invested in JustFly and Flighthub they have recently acquired Seahub, a digital cruise booking service. The CEO, Samuel Poirier, believes that online booking can be made easy and personal whilst maintaining a technological edge,

Lots of products that are much more complicated than cruises have fully transitioned to being booked online, and I don’t think the nature of the product itself is a roadblock. One of my favourite examples is Luxury Retreats. People will pay 10-20,000$ to rent these villas, and these properties are extremely different one from another.

Our team has studied that transition for several other products and verticals, and I think we’re starting to understand how this transition could happen for this sector as well. I don’t claim we have all the answers right away, but our current roadmap looks very promising.”

By 2019, digital travel sales are expected to pass $200 billion, so there is room for growth yet in the industry. Those who come out on top will successfully merge technological innovation with a more personalized service.

(Sponsored series by Momentum Ventures)

By Josh Hamilton

Juan Pablo Perez Etchegoyen

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