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Gone are the days when travellers risked spending their hard-earned vacations in rundown hotel rooms. That’s because more of them are now using online travel booking services to read reviews of hotels and travel destinations, and hunt for the best deals.
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With 48% of travellers travelling for leisure, travel systems providers have a good opportunity to market and cross-sell their products and services.
Take the recent partnership between Alibaba and Marriott to target the tech-savvy, economically independent Chinese, for example. The two are well-established companies and have created their own brands that will attract customers.
Through the partnership, Marriott can potentially reach 500 million users who use the Alibaba platform each month, while Marriott guests can travel wallet-free. This collaboration is wise as more than 700 million Chinese travellers are expected to travel abroad over the next five years.
Frost & Sullivan’s recent data shows that fluctuating flight timings affect a business traveller’s booking decision by 33%, while price influences them by 27%.
So, if travel system providers focus on small and medium-sized enterprises (SMEs) by offering convenient incentives and deals, the market could grow at a compound annual growth rate of 11.2% to reach $550m by 2020.
Business travellers from SMEs also want to make their trips as personalised as possible, paving the way for industry-disrupting travel apps such as Hopper and Flyr that tout the best flight timings and airfare prices. This is something that larger travel companies haven’t been able to do.
Though not extravagant spenders, Asia’s rising middle class with more income and leisure time is also expected to travel more. This trend is already playing out in the Asia-Pacific cruise market, which was worth $16m in 2014, and is set to grow to $33m by 2020.
Globally, the travel technology market reported close to 300 million bookings through agents. This growing market can be further fueled by tactical partnerships and innovative technology that can meet the needs of a new generation of travellers.