Travel agency industry - statistics & facts
The idea of purchasing travel services via an agency has stayed roughly the same since the mid-19th century, when the first dedicated store opened in the UK. That said, the advent of the internet changed this market from its roots, as online travel agencies (OTAs) quickly gained an edge over brick-and-mortar shops. With online sales channels accounting for 70 percent of revenue in the global travel and tourism market in 2023, which OTAs take the room at the top in the highly competitive travel agency landscape? Are brick-and-mortar businesses really a thing of the past?
While Expedia Group ranks just behind Booking Holdings among the biggest online travel agencies worldwide based on revenue, when focusing on the market capitalization this scenario changes. In 2023, it was Airbnb that reported the second-highest market cap of leading online travel companies, ahead of Trip.com Group and Expedia Group. Meanwhile, Airbnb also has one of the lowest marketing to revenue ratios in the OTA market, making it one of the companies less reliant on marketing to generate sales.
Overall, even if the combined market cap of leading travel agencies and tour operators worldwide is a fraction compared to the aggregated figure of OTAs, there is no lack of big companies in the retail market, like TUI AG. In 2023, TUI AG’s global revenue amounted to nearly 21 billion U.S. dollars – just slightly below the figure of Booking Holdings that year and the highest result reported by the company to date.
The biggest players of the OTA market
Owner of popular travel brands like Kayak, Agoda, and Booking.com – the most visited travel website worldwide – Booking Holdings is one of the undisputed leaders of the online travel market. In 2023, global revenue of Booking Holdings peaked at over 21 billion U.S. dollars, surpassing by over eight billion U.S. dollars one of the firm’s biggest competitors: Expedia Group, parent company of Expedia, Vrbo, and Trivago.While Expedia Group ranks just behind Booking Holdings among the biggest online travel agencies worldwide based on revenue, when focusing on the market capitalization this scenario changes. In 2023, it was Airbnb that reported the second-highest market cap of leading online travel companies, ahead of Trip.com Group and Expedia Group. Meanwhile, Airbnb also has one of the lowest marketing to revenue ratios in the OTA market, making it one of the companies less reliant on marketing to generate sales.
The travel agency and tour operator retail market
Despite having lost ground to OTAs, brick-and-mortar shops are still relevant in the market, with consumers often preferring to rely on travel agents when in need of an expert’s opinion. This is particularly relevant for the cruise industry, where bookings could be more complex as they might involve multiple decisions, like choosing among cabin categories and onboard activities. In this respect, data on the sales channels of the global cruise industry show that offline channels generated over three-quarters of that market’s revenue in 2023.Overall, even if the combined market cap of leading travel agencies and tour operators worldwide is a fraction compared to the aggregated figure of OTAs, there is no lack of big companies in the retail market, like TUI AG. In 2023, TUI AG’s global revenue amounted to nearly 21 billion U.S. dollars – just slightly below the figure of Booking Holdings that year and the highest result reported by the company to date.
