Middle East’s online travel market value is projected to advance from US$18billion to US$35 billion in the next three years, according to findings from Amadeus’ soon-to-be-published report – Middle East Online Travel Review.
The report additionally indicates that growing smart-phone penetration and connectivity among the youth coupled with a thriving airline industry in the region is anticipated to shape the multi-segmented online travel industry. Furthermore, over a period of five years, UAE’s online gross bookings have increased approximately three-folds on the back of a burgeoning affluent middle-class possessing an inclination to travel nearly four times in a year.
Amadeus, a leading technology provider for the global travel industry, released the findings at a press conference as part of its participation at the four-day Arabian Travel Market that opened on 4 May at the Dubai International Exhibition and Convention Centre.
Addressing the media, Antoine Medawar, Vice President, MENA, Amadeus, said: “Participating in Arabian Travel Market’s technology theme this year, we are pleased to share the findings on the future of Middle East’s travel industry. It is encouraging to see such positive forecasts for our region. We can all feel optimistic signs of growth in the online travel sector across most countries in the region, which is certain to have a halo effect on the overall GDP.”
In partnership with PhoCusWright, the Amadeus-commissioned report forecasts a 42 per cent online travel penetration in the UAE market over the next three years, outpacing the entire Gulf region’s 36 per cent growth outlook during the same period. Breaking down, gross bookings across UAE from direct supplier websites are expected to account for 51 per cent of all online revenue, mobile for 17 per cent and OTAs for 32 per cent.
“The online travel agency sector is witnessing significant consolidation with competition between intermediaries and direct suppliers heating up, and traditional tour operators increasingly embracing the online channel. These consumer trends have a deep impact on the competitive environment, giving rise to the increasing importance of technology players and metasearch engines,” added Medawar.
Amadeus has used its technological expertise to design merchandising solutions that adapts to dynamic requirements, enabling agencies to anticipate travelers’ needs while greatly reducing their overheads and running costs.
During the press conference at Arabian Travel Market, Amadeus also revealed key insights on how the channel shift would impact airlines, hotels, tourism boards and technology companies. Uncovering distribution trends over the next three years, the report highlighted that traditional airlines are likely to acquire 59 per cent of online revenue via their own websites- an advance from 23 per cent to 33 per cent in the next three years. However, low cast carriers are expected to soar 80 per cent from 70 percent, by 2018. Meanwhile, hotels will gain only 21 per cent of their online revenue. Subsequently, hotels will generate 75 per cent of online revenues via OTAs.
Medawar said: “It is imperative that the travel industry gets ready for this phenomenon, and much of what Amadeus has on display at the Arabian Travel Market this year reflects our commitment to addressing these future trends. Our support for the online travel sector through the development of trust, convenience, relationship, marketing and payments building platforms are geared towards enabling our customers to engage with the next generation traveller.”
The report further provides micro-analysis for hotels looking at brand affiliation. It offers strategies to benchmark and formulate correct positioning of brands and products to achieve the largest share of eyeballs, capitalise on cost-effective expansion and maximise online volume growth.
To be officially released in October 2015, the Amadeus/ PhoCusWright report will reveal drivers that usher in a radical change in the travel landscape of the GCC region.
