The value of UAE online travel sales in 2018 is expected to have reached Dh17.3 billion ($4.71 billion), driven by a growing population, an increasing number of tourists, and UAE residents’ shift towards digital services, according to new analysis from Dubai Chamber of Commerce and Industry.

Growth trends

The analysis, based on recent data from Euromonitor International, noted that direct online sales in 2018 is expected to have hit Dh9 billion ($2.5 billion), supported by higher airline sales. Meanwhile, Dh8.3 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 per cent between 2013 and 2018, compared to 12.5 per cent CAGR for direct travel online sales over the same period.

Digital shift

The analysis predicted faster growth for intermediate travel bookings companies over the next five years, as UAE travellers 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 is ecpected to have reached a record Dh2.9 billion ($790 million), marking a 25 per cent growth rate compared to the previous year. Over the 2013-2018 period, a 34.3 per cent 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 per cent 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 per cent of the intermediaries’ online travel sales in the UAE, with the value of transactions in this category expected to have reached Dh4.3 billion ($1.17 billion) by the end of 2018. Air travel dominated sales in this category, claiming 54.7 per cent of total sales transactions, followed by lodging (22 per cent), holiday packages (19.5 per cent) and other travel online services (3.8 per cent).

On the other hand, 48 per cent of UAE intermediaries’ travel online sales in 2018 fell into the category of business tourism, accounting for an estimated value of Dh3.9 billion ($1 billion). Air travel made up 55.3 per cent of business travel online sales, followed by lodging (44.2 per cent), car rental (0.4 per cent) and others (0.1 per cent).

Market opportunities

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, wide variety of booking options and easy-to-use websites. – TradeArabia News Service