- Asian tourists fueling growth in market
- Confidence with the industry rises globally
- Virtual reality to change the travel industry
In 2015, the travel and tourism industry was valued at $6.02 trillion, according to a report by MarketLine. Between 2011 and 2015, this represented a compound annual growth rate (CAGR) of 5.5%.
The travel and tourism industry is divided in multiple segments: casinos and gaming, foodservice, hotels and motels, passenger airlines, passenger rail, and travel intermediaries.
Foodservice was the largest segment in 2015 comprising 47.5% the industry. Revenue totaled $2.9 trillion.
Asian tourists, especially those from China and India, have been fueling growth in the industry. These tourists are visiting Western nations in large numbers, increasing revenue in Western markets.
Rising Industry Confidence
Confidence in the travel and tourism industry also is growing. Factors for this growth include affordable prices, rising disposable income, increasing demand for car rentals on a daily basis and high demand of internet and smartphones that increases the convenience of flight and car rental bookings.
GlobalData surveyed travel and tourism industry executives worldwide. Those who do business on a global basis had the highest positive outlook.
Of the respondents, 38% believed economic conditions are very favorable or favorable while 33% believe the economy globally is stable.
Confidence varies by region. In Europe, 29% said conditions will be favorable or very favorable during 2017 while in Asia-Pacific consumer confidence is expected to grow in the next six months.
However, executives believe the price of operating their businesses may increase in the next six months. When asked if the supplier prices of power and energy would increase, 30% said they were expecting a hike of between 2% and 6%.
Virtual Reality Changing Travel Industry
“Our project, in its current iteration, allows the user to ‘road test’ their holiday in a way still images simply cannot,” Carl Morgan, managing director of Tigerbay, told TTG Media. “As the technology advances however, we can see such videos becoming integrated into the booking process, enabling consumers to select room-types, add-ons and other ancillaries from within the video experience.”
Tigerbay showcased a virtual ski trip at Travel Technology Europe in February. In the future, the company hopes to produce virtual resort experiences as part of the booking process.
Cost is the only barrier, although Morgan believes virtual reality has reached the tipping point and prices will drop.
Hotel chain Marriott has incorporated VR in its rooms since 2015. Patrons can use VRoom Service to view travel destinations around the global.
Global Travel Technologies Market
- Travel technologies are IT solutions primarily implemented in the travel industry and include data-management solutions, digital-marketing solutions, e-commerce software solutions, mobile solutions, platform solutions and travel network management solution GDS.
- IT solutions are used by airline companies and hotels as well as online travel agents to manage end-to-end travel solutions.
- Between 2017 and 2021, the market is forecasted to grow at a CAGR of 8.3%.
- Key vendors include Amadeus, Sabre and Travelport.