Digitization of the travel market

In recent times, it has become more and more common for consumers to book trips themselves, particularly via OTA’s. These online companies offer the comfort of booking from home and often entice consumers with package deals and price saving options. As a result, many travelers have turned away from traditional brick-and-mortar travel agencies in favor of online alternatives to book their travel. The global travel agency market size (brick-and-mortar and online) reached 315 billion U.S. dollars in 2020. Some of the leading travel companies in the online travel market are Booking Holdings and the Expedia Group. When looking at a ranking of the biggest online travel agencies (OTA's) by revenue worldwide, these two companies came in respective first and second place with revenues of 15.07 billion and 12.07 billion U.S. dollars in 2019. Another online travel company that has grown exponentially over the past years is Airbnb. The company provides a vacation rental online marketplace that primarily offers homestays. In 2019, the company value of Airbnb reached 35 billion U.S. dollars.

Impact of the coronavirus pandemic on the online travel market

One factor that is predicted to effect the online travel market in the future is the coronavirus (COVID-19) pandemic. As countries implemented travel restrictions to reduce the spread of the disease, national and international tourism came to a drastic halt. It was estimated that the global revenue of the travel and tourism industry would drop by 17 percent in 2020. Meanwhile, companies in the online travel industry also felt the negative effects of the Pandemic. In 2020, global Airbnb bookings declined as did the number of active Airbnb properties in selected countries. Additionally, short-term rental bookings on Expedia, Booking, and Airbnb also declined over the previous year.

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