SINGAPORE – The online travel booking market in Asia Pacific is expected to hit a value of US$51.6 billion this year and will grow by 30 to 40 per cent a year going forward.
This is according to industry sources, like PhoCusWright and Expedia, that look at the online travel market in Australia, China, Japan, India, Indonesia, Malaysia, New Zealand, Singapore and Thailand.
Market players said this is in contrast to the more mature US market which is growing at five per cent a year.
More companies are also expanding their businesses here to tap that growth potential.
Singapore meanwhile, is expected to grow around 20 per cent to reach a value of US$1.5 billion in the online travel market this year.
One of the leading online travel booking companies, Expedia, will be launching country-specific websites in what it sees as growth markets.
Singapore, Malaysia, Thailand, Korea and Indonesia are all in the list.
The Nasdaq-listed company said that its shift in focus is due to the low number of online travel bookings in this region.
Daniel Lynn, Vice President and Managing Director of Expedia Asia Pacific, said: “We’re also seeing that Asian consumers are increasingly looking to buy travel online. If you look at the overall percentage of travel that is bought online, in US its 40 per cent, in Europe it can be 30 per cent, in Asia Pacific…even in the most mature markets like Singapore – its still in the 20, 25 per cent range and in other markets its down in the single digit still. So there’s a huge amount of growth to happen.”
Overall, sites like Expedia expects between 10 to 20 per cent of their booking revenues to come from Asia Pacific over the next two years, up from five per cent now. Expedia currently takes in US$24.3 billion in annual gross bookings.
Other players like Chan Brothers said bookings via its online flight and hotel portals have been encouraging with an average growth of 50 per cent on-month. While at the same time, the number of visitors to their site have doubled since its revamp in the second half of last year.
Furthermore, experts said as broadband and credit card penetration increases in Asia, consumers will be more willing to spend online.
And complementing that is the recent phenomenon of group buying sites like Groupon and Deal.com.sg.
These sites allow consumers to buy deals at a huge discount, and sometimes it include airfares and hotel stays.
“We see those business models as not necessary be directly competitive with online travel, what they tend to do is they tend to introduce to a set of customers one hotel on one destination on one particular day. And that’s great to get people excited about travel, but it doesn’t meet the need of a place where you can go for all your travel needs on a regular basis,” said Mr Lynn.
Corporate travel is another area that is driving growth as well, experts said.
This is because more executives are seen to be making their own bookings online for their corporate travel arrangements.
Sim Beng Khoon, Asia Pacific Regional Director of the Association of Croporate Travel Executives, said: “This is the right time for online travel sites to consider expanding in Asia, for all the right reasons, first I think it’s driven by corporate clients themselves.
“Almost all the travel management companies have online booking solutions for their corporate clients and corporate clients are looking at this mainly to drive cost savings, to drive compliance to their travel policy and to enhance the effectiveness and efficiency of their travel programmes.”
And this will be led by Asia’s giants, India and China, which experts said will see growth of 35 per cent in business travel volume this year.