Will the Online Travel Industry Recover From the Impact Of COVID-19 Pandemic?
The COVID-19 pandemic had a negative impact on the online travel industry with a decline from $744.7 billion in 2019 to $595.8 billion in 2020
Technology has made our life easier and more comfortable, and it has revolutionized the travel industry. Nowadays, travellers like to plan and book their trips online via a mobile app or website without human interaction.
It is known that travellers are keen to use social media platforms, mobile application and websites to explore their destinations and technology is an important factor in every sector.
It is estimated the online travel industry reached nearly $755 billion in 2019 at a compounded annual growth rate (CAGR) of 7.9 per cent since 2015. Overall, the online travel booking accounted for 63 per cent of the approximately $1.2 trillion the travel industry generates every year. Around 82 per cent of travellers book online using a website or mobile app, and an appropriate 0.27 per cent of the world’s online spending comes from the travel industry.
The COVID-19 pandemic had a negative impact on the online travel industry with a decline from $744.7 billion in 2019 to $595.8 billion in 2020, or 20 per cent. Due to the pandemic, most countries imposed social distancing in place with severe travel restrictions. This was a main reason that all industries—airlines, railways, hospitality and tourism—lost business. However, the market is expected to grow and reach $902.2 billion in 2023 if the pandemic can be controlled and economy recovers.
The online travel industry can recover from the COVID-19 pandemic but it requires owners and entrepreneurs having good strategy, clear segmentation and technological advances, good products which entrepreneurs will offer to travellers. Entrepreneurs also need to provide unique products and assess these carefully.
The travel industry has a lot of comments and feedback from black and Asian American travellers who have experienced racism during their stay abroad. Now with additional concerns of COVID-19, travellers are more concerned than ever about travelling due to feeling like there is a lack of priority care regarding minority healthcare, especially when traveling.
The latest report conducted by both the big consultancy firm McKinsey & Company and Skift Research, highlighted that the travel industry had faced unprecedented turbulence and suggested ways to respond to the pandemic. The report stated “We see signs of latent demand for travel. Customers are interested in and willing to travel again when they are allowed to do so, even before a vaccine is available at scale”.
The report also suggested that rather than outlearning and outcompeting one another at a benefit to no one, the travel industry needs to identify opportunities for complementary, collaborative ecosystem plays that help get the industry back on track. Instead of doing the minimum and seeing what happens, travel has the choice to declare what must be done systemically versus independently. Getting past the fact that working together is better, travel protocols including rapid testing, safety standards, and health passports need an industry champion to lead the way and for others…True, there are complexities in teaming up—legacy systems, fragmented ownership structure in hospitality, to name two. But now is the time to think in new ways to establish bigger, bolder relationships.
That is very useful advice from the big consultancy firm McKinsey & Company for the travel online industry entrepreneurs during the unprecedented turbulent time caused the Covid 19 pandemic. Given very recent significant developments this is an interesting business to watch and invest in for the years to come.