Online Revenue in Travel & Tourism Will Grow Substantially by 2027

The Travel & Tourism industry was severely affected by the pandemic with collapsing revenues globally. Statista Consumer insights explores revenue growth through online channels while also delving into the performance of individual segments within the Travel & Tourism industry.

The end of Covid-19 restrictions came as a blessing for many industries. Now that the fears connected with the pandemic are also disappearing more and more from people’s minds, the world is slowly returning to normal. But one trend which became especially manifest during lockdowns persists: The ever-increasing importance of online channels. This is especially good news for the Travel & Tourism sector.

Tourism Sector Returns to Normal After Pandemic Slowdown

The tourism sector was possibly the hardest hit industry in pandemic times, with revenues in 2020 collapsing to less than half of the 2019 levels, according to Statista Mobility Market Insights. Pandemic recovery was also slower in the Travel & Tourism market than in other sectors – revenues remained below pre-pandemic levels for three successive years.

2023 is the first year which suggests that the tourism industry is back to normal, with revenues finally climbing above 2019 levels to a total of US$855 billion globally, according to Statista Mobility Market Insights forecasts, and further growth is projected for the upcoming years.

But the pandemic has had a lasting impact on the way consumers book their travels. As in other industries, the already existing trend towards digitization and online bookings was fueled:

More Than 2/3rd of Total Revenues in Travels & Tourism Generated Online by 2023

The online revenue share in the total global Travel & Tourism market climbed 6 percentage points above pandemic figures, from 63% in 2019 to 69% in 2023, according to Statista Mobility Market Insights. In other words, more than two thirds of all revenues in the market will be generated through online channels in 2023. And there is no end in sight to the growth of the online sector. By 2027, offline revenues will only account for one fourth of all revenues in the global Travel & Tourism market. This is a strong sign for travel providers to invest further in the online business if they do not want to lose track.

Hotel and Vacation Rental Bookings Generate the Highest Online Revenue

When taking a closer look at the market, however, it becomes clear that the dominance of online channels is not equally strong in all market segments. While some are already highly online-driven, others still have a long way to go:

An analysis of the different market segments shows that it is hotel and vacation rental bookings which are mainly driving online sales in the global Travel & Tourism market. The two segments generate 76% and 71% of their 2023 revenues online, respectively, and are therefore above the average online share in the total market. Package holidays, such as all-inclusive offers, also have a strong online segment, with two thirds of revenues generated online in 2023.

Cruises and Camping Still Mostly Booked Offline in 2023

The two segments which are quite far below the market average in terms of online shares are camping and cruises. Just above half of revenues in the camping segment will be generated online by 2023. Cruises really stand out, with an online revenue share as low as 23%. A possible explanation is that the latter two segments, camping and especially cruises, are classic holiday concepts whose clientele are to a great extent older generations, which are considered to be less digitally savvy.

The digital revolution in the camping and cruises segments might thus still be ahead, but not out of sight as digital natives become older. Investments in the expansion of online channels might thus also pay off in the cruises and camping segments.

Summary

The Travel & Tourism industry suffered tremendously during the pandemic. However, the industry has made a remarkable recovery and has recorded rising revenue levels above the 2019 levels to a total of US$855 billion globally in 2023. The online share of revenue grew from 63% in 2019 to 69% in 2023, throughout the pandemic. The role of offline revenue is declining and by 2027, it is estimated that offline revenues will account for merely one fourth of the total revenue in the global Travel & Tourism market. Hotel and vacation rental booking is ranked as the highest revenue generating sector while camping and cruises are among the lowest in terms of online revenue generation.

Key Takeaways

1. The Travel & Tourism Industry has achieved pre-Covid revenue levels.

2. By 2027, offline revenues will only account for one fourth of all revenues in the global Travel & Tourism market.

3. Hotel and vacation rental bookings generate 76% and 71% of their revenues online, making them the largest online sales segment in the global Travel & Tourism market 2023.