Online Travel Technology and Online Travel Industry Future

Are On-line Travel Portals and Travel Search Engines advanced than ever?

Large or Small, Travel companies are continually looking to use the latest technology to enhance their on-line presence. This is the main reason on-line travel website technology has grown faster than any other on-line related industry. The On-line Travel Hotel Accommodation Booking marketplace is a very competitive area and ultimately the user’s decision to purchase depends on 3 key factors:

  • Website functionality
  • Availability of the chosen travel package, flight or hotel
  • Price (obviously)

Most of the leading online travel agents or online tour operators who are connected with one of the highly recognised flight suppliers, hotels and/or transfer wholesalers via XML. Through these suppliers they can search online users’ needs relate to any destination around the world.

These Online Travel Websites are continuously growing their supplier base by regularly adding boutique, destination specific XML suppliers. This will offer more hotel, Flight and Transfer options to their web users, allowing us to broaden their exposure to new market segments.

Most of the Online travel websites use the latest “filtration technique” across a number of supplier feeds in real-time. Meaning that they can always deliver the latest availability information and most importantly the best available rate to the consumer. Further to above most of the leading travel and leisure websites have;

  • Ability to manage, adapt and dynamically improve the system according to the marketing and usability purposes
  • Flexibility to handle the load according to the business improvement
  • Easy to find and fix bugs and issues
  • System is guaranteed for 95% up time
  • Secure backup and recovery processes
  • Ability to launch new sites for their new markets.

Travel Website and GDS Development Overview.

Leading Travel websites and corresponding Systems are based on an open architecture concept which is an independent platform and multi tier internet technology.

  • Systems are built according to SOA (Service Oriented Architecture)
  • Mostly built on JEE technologies
  • Use of web services for external connectivity and data processing
  • Distributed / multi team development using SVN

Market analysis summary to get an idea about OTA marketplace.

The travel sector is a growing marketplace. With traveller numbers set to double in size over the next 10 years there has been a steady increase in the number of people booking their travel independently i.e. book flights, accommodation etc. separately and not as a package online.

In spite of occasional shocks, international tourist arrivals have shown almost uninterrupted growth from 25 million in 1950, to 277 million in 1980, to 438 million in 1990, to 681 million in 2000, and the current 880 million. By 2020 international arrivals are expected to reach 1.6 billion.

The total capacity in hotels and similar establishments worldwide is estimated at 18.4million rooms. This has been growing at about 3% over the last five years.

  • America 6,500,000 rooms
  • Asia Pacific 4,460,000 rooms
  • Europe 6,550,000 rooms
  • Middle East 355,000 rooms
  • Africa 485,000 rooms

The estimated value of hotels booked through Online Travel Agents (OTA) in 2010 is over $22 bn. as per Online Traffic and Conversion Report Second Edition – February 2011.

Online Travel Agent (OTA) focus will be on driving sales exclusively through the Internet. This is a well established and ever-growing marketplace. Online travel revenues in Asia-Pacific, Europe and the US, 2006-2010 (% of total travel):

  • 2006: 49% (US) / 23% (Europe) / 9% (Asia-Pacific)
  • 2007: 52% (US) / 27% (Europe) / 11% (Asia-Pacific)
  • 2008: 51% (US) / 33% (Europe) / 14% (Asia-Pacific)
  • 2009: 56% (US) / 37% (Europe) / 18% (Asia-Pacific)
  • 2010: 59% (US) / 43% (Europe) / 21% (Asia-Pacific)

Since 2008 the percentage of UK adults booking their overseas holidays online has risen by 15% to over 54% (one-in-two consumers). 45% of the hotel bookings in 2010 was made via the Internet.

Travel trade competitive edge compared to market leaders.

Main competitive edge will be your product pricing. As you have to manage your OH relatively low by automating most of the administration functions using latest technology. Then you will be able to offer Hotels, Flights and Travel packages at a rate that the larger OTA will find difficult to match. Whilst they work on margins of about 25% you will be able to run profitably at 10%. This gives us a significant advantage in the marketplace.