New research shows online travel sales are being driven by growing population, shift towards digital services
The value of the UAE’s online travel sales in 2018 is forecast to reach AED 7.3 billion ($1.98 billion), driven by a growing population, an increasing number of tourists, and UAE residents’ shift towards digital services, according to a new report.
The analysis from the Dubai Chamber of Commerce and Industry - based on recent data from Euromonitor International - found that direct online sales in 2018 are expected to hit AED9 billion ($2.45bn), supported by higher airline sales.
A further AED8.3 billion worth of online sales from intermediary companies were accounted for during the same year.
The report said 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, 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, the report added.
Leisure tourism accounted for 52 percent of the intermediaries’ online travel sales in the UAE, with the value of transactions in this category are expected to reach AED4.3 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).
The remainer (48 percent) of UAE intermediaries’ travel online sales in 2018 fell into the category of business tourism. 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).