While traditional travel technology was always the domain of computer reservation systems for airlines, the definition has expanded significantly in recent years. Technologies like online booking and global distribution systems (GDSs) for both the airline as well as tourism and hospitality industries will help the global travel technology market reach $12.21 billion by 2019, growing at a CAGR of 7.9%.
Top travel tech companies
Amadeus dominated the global travel technology market in 2014 with a share of 40%. More than 70% of its revenue is generated from GDS while the rest comes from airlines and hospitality IT solutions. It was followed by Sabre, whose strong foothold in North America helped the company maintain a market share of 31% in 2014.TravelPort held 22%, and Navitaire (a subsidiary of Accenture) had 1%.
Lemax, Expert Travel Services, and Web Booking Expert are other prominent vendors that hold a sizable share of the market.
Travel tech worldwide
The US—one of the largest economies in the travel tech market—is actually seeing relatively slow growth in its online travel market. However, the market was valued at more than $160 billion in 2014, and is likely to retain its leadership for the next two to three years, with China expected to outpace the US in online travel sales by the end of 2017.
Europe and the Middle East picking up slack from declining US market
These declining sales in the US have compelled OTAs to seek growth opportunities in other promising marketslike Europe and the Middle East.
With a lower OTA penetration compared to the US and a fragmented hotel market in Eastern Europe, Technavio believes that the online travel market in Europe offers substantial growth opportunities for travel technology companies.
All told, the EMEA market is likely to reach $5.86 billion by 2019, growing at a CAGR of 8.8%.
China and India will be key regions to watch
A huge number of online travel start-ups have spurred growth in the market in the APAC region, which is expected to grow at a CAGR of 11.1% from 2014-2019.
India
India’s travel and tourism industry grew by more than 7% in 2014, compared to the global growth rate of only 2.5% in the same year. Online travel accounted for 70% of India’s $14.3 billion e-commerce market in 2014. Influence of social media on consumers, as well as convenience are two key factors spurring this intense growth in online travel bookings.
China
The Chinese online travel market is likely to outpace the US by the end of 2017. Ctrip, eLong.com, and LY.com are some of the leading OTAs in the market in China that use a wide variety of GDSs for online flight and hotel booking. In May 2014, Ctrip bought 40% of eLong’s share from Expedia. It also forged a partnership to share inventory in certain regions, largely in the packaged tour and air segment. The US-based company Priceline has also invested $250 million in Ctrip through a convertible bond to gain a 15% stake in the company. Priceline was the primary non-Chinese hotel partner for Ctrip in 2014.
