Even as the world gets smaller, our desire to travel never ceases. Reflecting this demand, online travel, which comprises online sales of flights and accommodations, accounts for more than 38% of the estimated US$78 billion Southeast Asia’s internet economy last year. Google-Temasek also reported that online travel is projected to grow 15% year-on-year until 2025.
This projection of the online travel industry’s growth momentum is already evident in ShopBack’s online travel bookings data. In fact, the volume of online travel bookings powered by our platform saw an explosive 260% growth in 2018 on the back of more consumers buying online travel products.
We expect the online travel sector to maintain its growth momentum through 2019. In view of this, travel operators should appropriately position themselves to capitalise on this growth. To this end, we analysed last year’s online travel bookings transacted via ShopBack across seven countries in Asia Pacific.
We noted that while 60% of transactions were still made on desktop in 2018, the growth of transactions made on mobile app has far outpaced that of desktop.
In fact, mobile app’s growth rate was at least 1.5 times that of desktop in 2018. This is consistent with the finding we highlighted here, where we saw more online sales conducted on mobile app across most major online categories. Should this trend continue, mobile app is bound to leapfrog desktop in the coming quarters as the leading platform on which online travel sales are transacted.
So the implication is clear: we have to identify the behavioural drivers behind the mobile-led growth in online travel bookings.
To do this, we segmented our online travel customers into three distinct profiles:
Who used mobile app for online travel bookings?
Over 70% of customers who booked and travelled in less than a day (hereafter referred to as “Spontaneous” travellers) completed their online travel bookings on mobile app. These travellers, who made their travel plans at very short notice, typically include those who were on business trips as well as those who needed quick getaways.
Regardless of intent, speed is paramount when marketing to the “Spontaneous” travellers. With this in mind, travel operators could consider:
The desktop-mobile app split was relatively even for customers who booked and travelled within a week (hereafter referred to as “Last-Minute” travellers) and shifted towards desktop for customers who booked and travelled with more than a week in advance (hereafter referred to as “Plan-In-Advance” travellers). With the luxury of time, travellers seemed to prefer purchasing on desktop, presumably for the ease of navigating and comparing across a wider range of accommodation and flight options.
Where did the “Spontaneous” travellers go?
We observed that they tended to do short trips within their country. With the exception of Singapore, 9 in 10 “Spontaneous” travellers typically engaged in domestic travel. Given that the volume of accommodation bookings outweighed flight bookings by seven times, we deduced that this group of travellers were more inclined to book accommodations at the eleventh hour.
Even for Singapore, which is a small island city-state that takes under an hour’s drive to travel from one end to the other, domestic travel in the form of staycation (stay-at-home vacation) is increasingly popular. In 2018, 5 in 10 “Spontaneous” travellers from Singapore booked staycations while the remaining half travelled to Malaysia, which is connected to Singapore via a 1KM strait.
How much did the three traveller profiles
spend on online travel bookings?
We computed the travellers’ average purchase value (average value of each purchase made) based on their travel profiles to understand their purchase behaviours. “Plan-in-Advance” travellers tended to make higher value purchases compared to the other traveller types. With the exception of Indonesia, “Plan-In-Advance” travellers spent at least US$370 more than “Spontaneous ” travellers in all markets. This can be attributed to the fact that 67% of “Plan-In-Advance” travellers travelled overseas and for a longer duration, which tended to be costlier.
We surmised that most of the “Plan-In-Advance” travellers had travelled for leisure and a portion of them were on extended work trips. Since this group of travellers tended to book for recreational purposes, travel operators could consider:
While most “Plan-In-Advance” travellers prefer purchasing on desktop, we recommend engaging them on mobile app with content pieces to facilitate browsing and even purchasing on-the-go. This will help to generate top-of-mind recall across platforms.
A mobile-first future for Asia Pacific consumers’ travel needs
Although online travel bookings are still predominantly transacted on desktops, the continuous shift of consumer preferences indicates that mobile will likely overtake desktop as the eventual platform of choice. This is also seen in other major lifestyle categories in online sales including fashion, marketplaces, and even food delivery, as highlighted here. This shift presents new opportunities for online travel operators since they would be able to better target travellers with exacting needs.
Stay tuned for more updates from ShopBack Insights!
ShopBack is leading the wave of smarter shopping in Asia Pacific with a one-stop lifestyle platform that powers smarter purchase decisions. A premier player with an established presence in Southeast Asia (Singapore, Malaysia, Indonesia, the Philippines, Thailand), Taiwan and Australia*, ShopBack has been working with leading e-commerce merchants since 2014, rewarding consumers with cashback whenever they shop via ShopBack.
Data and Methodology
At the time of publication, ShopBack is helping over 2,000 merchants such as Agoda, Booking.com and Expedia to deliver over three million orders, totalling over US$70M per month, across a multitude of major categories including online travel bookings, online transport and food delivery.
Findings presented in this study were based on ShopBack’s data gathered from over eight million shoppers across seven countries.
*Full 2018 data available for all countries except for Australia which was launched in May 2018.
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