In 1996, a headline warned of the seismic change the internet would have on the travel industry: “Airline Reservations Systems Face Internet Threat.” And over the decades, the internet has indeed changed everything for the industry.
Today, Business Wire identifies multiple drivers — including the increased spending power of ecommerce consumers, government initiatives to spread tourism, growing internet and credit card penetration in developing countries, and the emergence of new online segments — powering ecommerce’s dominance in the global travel industry.
GlobalData estimates the global online travel market is expected to grow at a compound annual growth rate (CAGR) of 8% to reach $765.3 billion between 2022 and 2025, with online travel intermediaries continuing to overtake in-store purchases:
According to Business Wire, the global online travel market is tracking to be nearly $1.5 billion by 2027. Meanwhile, Statista estimates in the travel and tourism market, 74% of total revenue will be generated through online sales by 2026.
Industry players should consider whether their ecommerce experience will satisfy worldwide consumers who shifted to shopping online during the pandemic and are now eager to return to globetrotting.
The passenger is in the driver’s seat when it comes to airline ecommerce. As McKinsey points out, “passengers hold significant buying power and are mostly price driven, an added challenge in an age when passengers can easily compare the ticket prices of different carriers online. Despite the best efforts of airlines to differentiate themselves, an airline seat remains relatively commoditized.”
Online travel shoppers bring their attitudes about online shopping generally to the experience, and travel businesses need to be upfront in addressing their security concerns.
ClearSale’s most recent State of Consumer Attitudes on Fraud & CX survey, conducted in March 2021 among adult online shoppers in the United States, United Kingdom, Canada, Australia and Mexico, found that 88% of consumers feel more secure buying from sites that explain how they prevent fraud and protect data privacy.
When fraud does happen, consumers are unlikely to forgive the business: 84% said they won’t visit a site again after experiencing credit card fraud there. However, overly stringent and poorly tuned security that rejects good orders also drives customers away: 40% said they won’t shop again with a business that declines their order, and 34% will complain about the decline on social media.
Business need to set up fraud controls and data security practices that recognize good customers while blocking criminal activity.
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