UAE online travel sales projected to total nearly $2bn in 2018
The value of UAE online travel sales in 2018 is forecast to reach AED 17.3 billion ($1.98 billion), driven by a growing population, an increasing number of tourists and UAE residents’ shift towards digital services, a new analysis from 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 AED 9 billion ($2.5 billion), supported by higher airline sales. Meanwhile, AED 8.3 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% between 2013 and 2018, compared to 12.5% 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 travelers 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 AED 2.9 billion ($790 million), marking a 25% growth rate compared to the previous year. Over the 2013-2018 period, a 34.3% CAGR was seen for UAE mobile travel sales and it is expected that this market will continue to grow at a CAGR of around 16.4% over the next five years, thanks to the availability of high-quality mobile apps, many of which target the Arabic-speaking population.
Leisure vs. business travel
Leisure tourism accounted for 52% of the intermediaries’ online travel sales in the UAE, with the value of transactions in this category are expected to reach AED 4.3 billion ($1.17 billion) by the end of 2018. Air travel dominated sales in this category, claiming 54.7% of total sales transactions, followed by lodging (22%), holiday packages (19.5%) and other travel online services (3.8%).
On the other hand, 48% of UAE intermediaries’ travel online sales in 2018 fell into the category of business tourism, accounting for an estimated value of AED 3.9 billion ($1 billion). Air travel made up 55.3% of business travel online sales, followed by lodging (44.2%), car rental (0.4%) and others (0.1%).
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.