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APAC Set to Become the World's Largest Digital Travel Sales Market

Strong growth in the region is largely thanks to China

July 13, 2016

Digital travel sales in Asia-Pacific will surpass those in North America next year, making it the largest regional market in the world.

Digital Travel Sales in Asia-Pacific and North America, 2015-2020 (billions)

According to eMarketer’s worldwide digital travel sales forecast, sales in APAC will grow by more than 21% next year, reaching $215.92 billion, compared with North America’s $200.43 billion.

This strong growth is thanks to heavy activity within China, where digital travel sales this year are expected to grow by 36.0% to reach $95.29 billion. As has happened with the retail ecommerce market in China, high levels of mobile adoption, combined with a growing middle class that likes to take trips, have led to a booming digital travel market.

Currently, the US, with projected sales of $180.59 this year, has the largest digital travel market in the world. While the US market is currently more than double the size of China’s, it is not expected to keep this lead for much longer; by 2020 digital travel sales in China will reach $198.48 billion, less than $15 billion behind the US.

Digital Travel Sales Share in China* and the US**, 2015-2020 (% of worldwide digital travel sales)

Chris Bendtsen, eMarketer forecasting analyst, attributes the strong growth in China to multiple factors. &ldqou;Travel demand in China is showing no signs of slowing down,” he said. “Consumers in China are now able to take advantage of the rising disposable incomes and simplified visa policies that have been progressing over the past few years. And it’s the digital companies that are benefitting. Digital and mobile sales growth in China are some of the highest in the world, and online travel agencies such as Ctrip, Qunar, Tuniu and Alitrip are all fueling that growth. In addition, mobile adoption in the country is driving revenue for the online travel agencies, and causing airlines and hotels to further invest in their own mobile apps.”

Elsewhere in the region, India and Indonesia stand out for having high digital travel sales growth. In India, both retail ecommerce and digital travel sales are growing at high rates as booking activities continue to shift online. Bendtsen commented, “Travel companies are increasing their digital (especially mobile) investments in India as the mobile internet user base continues to grow. A few recent examples include Ctrip buying stake in Indian online travel agency MakeMyTrip, Airbnb receiving funding to expand in India.”

In Indonesia, internet and mobile user growth combined with increased disposable income are driving digital travel sales. The offline sector is still very prevalent for booking travel, suggesting there is tremendous room for growth influenced by the mobile youth and thriving online travel agencies.


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