Offering a global view of the industry across four chosen countries – China, India, United States and the UK 2. PESTEL analysis – a summary is included in this executive summary, with the full analysis as an appendix at the back. 3. Porter’s 5 Forces analysis The online travel industry in the UK has been established for some years now and is reaching maturity. As it reaches maturity, the rapid growth it saw leading up to this point will cease to continue. This will increase competition and make it increasingly difficult to operate an agency.
This economic climate will cause further difficulties for online travel agents as consumers look to find value for their money, and spend time seeking the lowest price. In saying that there are enormous opportunities on the technological front with m-commerce beginning to come to fruition. In addition, the industry is beginning to see the benefits of marketing through social media and this should play an important role in the future viability of an online travel agent. Global View The online travel market in Asia is expected to be the most import driver that will affect the overall travel market in Asia in 2012.
Estimated to grow 35. 2% annually in 2012, the online travel market of China, and its growth over the last few years shows that the online service of booking travel is increasing past conventional means of booking travel. The growth of this industry can be explained by a multitude of reasons, such as the increase of internet usage in China and the world as a whole, the rise of the middle class in developing countries, the rise of credit card holders, and the change/reduction of visa restriction to Chinese travellers by foreign countries, has led to a boom in this industry.
Industry Analysis Report on E-Commerce
Just about everyone in America has at least heard the term E-commerce. However, many people are not familiar with the history of it or the many forms in which it occurs. E-Commerce is defined as the exchange of goods and services over the Internet. According to the 2000 Government Census 1 out of 5 people have purchased something online. However, the U.S. Department of commerce says that only 1% ...
In India in 2011, online travel sales increased in real terms by 21%. This exceeded the overall travel industry’s increase of 19% (Euromonitor, 2012).
Growth was believed to be have been hampered by unreliable payments online. Despite this, India has seen an increase both of traditional travel agencies offering online services and from online travel agencies. Internet users in India by 2013 are forecast to double to 216 million from 2007 levels (Euromonitor, 2009), and in turn this is expected to eat into the share of the traditional bricks and mortar travel agencies (Euromonitor, 2012).
The trend for online travel retail sales in the UK is upward, but at a slowing rate. In 2010, 35% of total travel retail sales were online, accounting for a total market of ? 9. 2 billion. Year on year, this result is the second lowest ever growth for online travel sales, indicating that the market is reaching maturity. Further growth is still expected as the younger generation, who are more akin to book travel online, make up a greater percentage of holiday makers (Euromonitor, 2011).
Despite the fact that internet sales are expected to increase both in market share and overall sales, it is expected to reach a ceiling in the next few years. Of the online travel retailers in the UK, Expedia leads the pack. Expedia is also the worldwide leader in online travel agencies, and the leader in the US market, the largest online travel retail market in the world. Global online sales totalled US$207 billion in 2011, an increase of 7% from 2010. North America made up over 50% of the market, with nearly $119 billion in sales.
The Essay on Huella Online Travel 2
The purpose of this document is to support and outline the creation of a statistically significant study of the Hong Kong market for Huella Online Travel. With Hong Kong’s online travel market expecting an “annual growth of 97. 9% during 2006-2010”, it is imperative for Huella Online Travel to discover what is impeding them from obtaining a greater market share in Hong Kong. After reading the ...
From this perspective, the largest North American companies, Expedia and Priceline, with their experience and established roots, are the best positioned to capitalise on the global market overall. On the back of higher internet penetration and more reliable transaction methods, the emerging markets are expected to show solid growth for the foreseeable future. Leading the way are China, India and Russia, with Latin America and the rest of Asia set to balloon alongside the increased internet usage. PESTEL Analysis
Herein contains a summary of the notable factors as described in the full analysis in the appendix. Political & Legal •Air Passenger Duty – this has significant opposition to it from industry groups and consumers alike. The cost it adds to flights is substantial. •Government campaign – this campaign aims to maintain tourism levels before and after the Olympics. This will be critical to the success of the tourism industry in general given the trend for a severe downturn in tourism post Olympics in previous host cities Economic •Consumer confidence – the UK is an economy in recession.
This lowers the confidence of buyers and they react by reducing their discretionary spending. Holidays are purely discretionary and expenditure in the related industries suffer as a result •Industry growth – despite the state of the economy, the Department for Culture, Media and Sport are predicting tourism to be a growth area in the UK. Social/Cultural •Olympics – the Olympic Games are normally a money spinner for the host nation, and London 2012 is expected to follow this trend. This will provide a short term boost for the online travel industry.
Fears of a desertion of the UK because of perceived higher prices and overcrowding however are prevalent. This is one factor that could work in any direction for the industry •Income inequality – the London Riots of 2011 are partly blamed on income inequality and the growing sentiment of disenfranchisation from those in the lower socioeconomic category. If such riots become regular, tourism will suffer as travellers avoid the violence Technological •M-commerce –goods and services purchased on a mobile device is expected to skyrocket in the foreseeable future.
The online travel agency industry should ride the back of the wave and see an increase in revenue as the convenience factor of booking holidays online becomes even greater •Social media – social media outlets allow mass and viral marketing. Utilising this market for advertising and promotion will be key to the survival of individual online travel agencies Environmental •Emissions targets – bold emission reductions have been promised by the UK government and delivering this promises is sure to come at a cost to the tourism industry, and thus the online travel industry Porters Five Forces Bargaining Power of Suppliers: Medium/High
The Essay on SRi Lanka Travel & Tourism
With over 1,600 km of coastline, Sri Lanka is well known for its tropical beach resorts and related sports such as water sports, deep-sea fishing, underwater photography, scuba diving at shipwrecks and coral reefs, and whale watching. Other major tourist attractions include ancient heritage sites and forest resorts in Wild Life Sanctuaries. There has been a significant improvement in Sri Lanka’s ...
The suppliers in the online travel agent industry are the hotels, airlines, car rental companies, cruise line companies and so on. The major issue that online travel agencies have with suppliers is the ease in which suppliers are able to sell directly to customers. For instance in the UK hotels industry, a greater proportion of people book directly with the hotel (16%) than booking via an online travel agent (11%) (Euromonitor International, 2009).
This forces online travel agencies to seek alternative revenue streams, especially in times of economic frailty where consumers are seeking the lowest possible price.
Bargaining Power of Customers: High The primary customers in the online travel agency industry are the mum and dads of the world, as well as other adults. In the UK, these people are highly educated, and tend to have a high disposable income. The industry itself is highly competitive, with many different options for customers to choose from. Being online, the buyer is able to compare many companies’ offerings quickly and conveniently. Throw in to the mix the meta search engines and you have an extremely competitive industry.
