The Asia Pacific (APAC) travel market is in the midst of a huge and rapid shift from offline to online and mobile channels. Although online travel penetration is increasing at a slower pace than in prior years, a new PhoCusWright study shows that APAC’s online bookings are skyrocketing – increasing at twice the rate of the overall market.
One quarter of the total APAC travel market was booked online in 2013, up from one fifth in 2012, according to PhoCusWright’s Asia Pacific Online Travel Overview Seventh Edition.
This growth rate is expected to continue through 2016, when nearly one third of APAC travel will be booked online. Suppliers and online intermediaries across the region are driving this adoption as they tap pent-up demand in the underpenetrated, emerging online travel markets of China, India, Indonesia, South Korea and Taiwan.
Additionally, online travel agencies (OTAs) are incenting travelers to book online with discounts and promotional offers. Mobile bookings are growing even faster, and travel suppliers are adapting their distribution strategies to compete for smartphone bookings.
“Mobile is a quickly emerging key channel in the region,” says PhoCusWright research analyst, Maggie Rauch. “Aggregate APAC mobile travel gross bookings doubled from US$3.2 billion in 2012 to $6.4 billion in 2013. And there are plentiful opportunities ahead – 30% of the region’s population is expected to have a smartphone by 2016, a sharp increase from 19% in 2013.”
Most of APAC’s travel markets grew in local currency terms, but weakened exchange rates had a dampening effect across the region. APAC total travel gross bookings shrunk 1% from $325.9 billion in 2012 to $322.6 billion in 2013, slipping one spot behind Europe’s travel market.
However, assuming stable foreign exchange conditions, the region is expected to bypass Europe in 2014 to reclaim its title as the world’s largest regional travel market.
Note: More findings from the report will be shared at the WIT Conference, Oct 28-29, in Singapore held at the Marina Bay Sands, pictured above.
