The value of the UAE’s online travel sales in 2018 is forecast to reach AED17.3 billion (US$1.98 billion), driven by a growing population, an increasing number of tourists, and UAE residents’ shift towards digital services, a new analysis from the Dubai Chamber of Commerce and Industry has revealed.
The analysis, based on recent data from Euromonitor International, found that direct online sales in 2018 are expected to hit AED9 billion ($2.5 billion), supported by higher airline sales. Meanwhile, AED8.3 billion ($2.3 billion) worth of online sales from intermediary companies were accounted for during the same year.
Online travel sales through intermediary companies recorded a compound annual growth rate, CAGR, of 26.1 percent between 2013 and 2018, compared to 12.5 percent CAGR for direct travel online sales over the same period.
The analysis predicted faster growth for intermediate travel bookings companies over the next five years, as UAE travellers will increasingly turn to online platforms to research, book travel and accommodation, and take advantage of special deals.
In 2018, online mobile travel sales in the UAE are forecast to reach a record AED2.9 billion ($790 million), marking a 25 percent growth rate compared to the previous year. Over the 2013-2018 period, a 34.3 percent CAGR was seen for UAE mobile travel sales and this market is expected to continue its growth at a CAGR of around 16.4 percent over the next five years, thanks to the availability of high-quality mobile apps, many of which target the Arabic-speaking population.
Leisure tourism accounted for 52percent of the intermediaries’ online travel sales in the UAE, with the value of transactions in this category are expected to reach AED4.3 billion ($1.17 billion) by the end of 2018. Air travel dominated sales in this category, claiming 54.7 percent of total sales transactions, followed by lodging (22 percent), holiday packages (19.5 percent) and other travel online services (3.8 percent).
On the other hand, 48 percent of UAE intermediaries’ travel online sales in 2018 fell into the category of business tourism, accounting for an estimated value of AED3.9 billion ($1 billion). Air travel made up 55.3 percent of business travel online sales, followed by lodging (44.2 percent), car rental (0.4 percent) and others (0.1 percent).
Online travel agencies (OTAs) have emerged as online alternatives to the traditional channels through which hotels and airline companies offer their products to customers. International OTAs, such as Booking.com and Expedia, account for the largest share of the UAE’s online travel market, thanks to their strong links to leading hoteliers and airline companies, strong digital marketing, a wide variety of booking options and easy-to-use websites.