Travel ecommerce (online travel, digital travel – the terms often vary) has been on a roll for quite a while now. The …
Travel ecommerce (online travel, digital travel – the terms often vary) has been on a roll for quite a while now.
It was of course much earlier, but let’s just use 1996 as the year where the category really started finding its feet.
And, let’s face it, for nearly two decades it’s been an amazing ride. But perhaps now it’s time to start using the S Word: Saturation.
Growth in digital travel will top out in many markets over the next four years. With air travel – and indeed the whole sector – operating in a consistent 3-5% growth model, anything less than 5% represents a reasonably steady state,
eMarketer’s recent publication of two sets of datapoints illustrates the point.
The first shows the total growth of ecommerce (defined as unmanaged business travel and leisure):
Using this data, only five of the top 20 markets will experience growth rates of over 6%, and all of the markets will have declining growth rates.
Indeed, two of the largest markets – Germany and Japan – will have growth rates below 2%.
This should be a wake up call all those who are bullish on the long term growth of the sector. We must therefore accept that the glory days are coming to an end.
Perhaps, even, time to change from a growth strategy to a share shift one. This change will gave far reaching implications across the entire marketplace.
However, there is another interesting observation that can be drawn from the eMarketer data.
Travel is perhaps not so special any more, compared to other ecommerce categories. Air travel, for example, may lose its cachet of being the most important – or special – element in the ecommerce food chain, and perhaps eventually take a smaller percentage of the total market.
Whilst travel will still remain a significant portion of overall ecommerce, erhaps in the 25-30% range, so many other sectors will start to command a larger chunk of the consumer eommerce spend that the market will potentially start to see a flow of cross-technologies.
This lesson has to be learned now, not least in areas of financial fulfillment, mobile, personalization and purchase process .
So perhaps now is the time to start rethinking how travel will be powered in three to five years time. Given the long gestation time for travel technology and its respective adoption, this means if you are not already aware then you are perhaps probably a bit too late already.
Some argue that those whose iron grip on travel technology have inhibited innovation will eventually be swept away. The future of the sector is both exciting and terrifying, and we who live here have to accept this new reality.
In travel technology the assumption has been that change is constant. True, except this time the change is not just intra-sector but inter-sector as well.
NB: Travel icons image via Shutterstock.