The online travel market in the Gulf Cooperation Council (GCC) countries is expected to reach USD 15 billion by 2023, according to MENA Research Partners (MRP), a leading research company in the Middle East. The growth marks an increase of 140 percent from its current levels.
Annually, the GCC e-travel market is projected to grow by 20 percent during the period 2019-23. The online travel market growth rate is well above the conventional travel market which is progressing at 4 percent per year.
Compared to global figures, the online travel market in the region remains untapped. Presently, the online travel sector only accounts for 5 percent of the total GCC travel market compared to the global average of 12 percent. Potentially, this could mean a boom in the e-travel industry which may log in 2.5 times growth.
“Demographic changes and changes in consumer preferences are largely shaping the upsurge of the e-travel market. The growth in the e-travel sector is expected to come from the larger number of young and tech savvy travellers who embrace the digital ecosystem to plan and book their journeys,” said Anthony Hobeika, Chief Executive Officer at MRP.
The digital infrastructure in the region is another driver for growth and a key catalyst as the region embarks on long-term advancement from its current low e-travel activity base.
“These travellers have high expectations, demand personalized offers and do extensive online research before purchasing. MRP’s estimate shows millennials at 20 million, accounting for a massive 40 percent of the GCC population, which further indicates a growth in expected demand by this segment,” Mr Hobeika added.
Along with high connectivity, smartphone penetration in the GCC stands at more than 75 percent, a number which is among the highest in the world. Smartphones are the most popular devices for researching travel offers and online information, and the mobile travel market is expected to further expand the digital travel space in the GCC.
As a result of the digital infrastructure, the travel industry is undergoing massive changes, and the consumer appetite has changed from offline to online booking. The online travel industry and evolving new technology enable consumers to complete all the tasks related to their trip using just a single platform. The trend towards personalization is repeated on these meta-search engines through content, reviews and service offerings, providing convenience while addressing consumer demand.
The online travel market is expected to become a key component of the overall tourism ecosystem in the GCC due to the shift in the digital landscape. Travel brands are seizing new digital opportunities to engage with their consumers and the rapidly growing young segment of the GCC population.
Moreover, governments in the GCC are promoting tourism in the region and have identified tourism as a fundamental part of their long-term visions for economic growth. The emphasis on tourism and diversification away from hydrocarbons will also drive the e-travel market size, both from leisure to business travel as well as foreign and domestic travel.