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As many private equity and other investors will tell you, massive opportunities remain in the travel industry over the long term. The travel market will undeniably look very different in 2025 than it does today. But if you believe's projections, boom times are ahead for many companies.

Covid-19 be damned. Group, which filed for an initial public offering and a secondary stock market listing in Hong Kong, detailed in several charts what it views as “a massive travel market opportunity” globally through 2025.

For anyone thinking that the novel coronavirus is a harbinger of a hopelessly decimated global travel industry over the long term, these projections provide a counter narrative.

Sure, the message is geared toward enticing investors to buy shares, and the global numbers come through the prism of a travel company in China, where coronavirus has been handled to a a large extent, but the charts in Group’s financial filing Tuesday in connection with the proposed Hong Kong listing are illuminating. The company’s primary listing would remain in New York on Nasdaq.

Massive Travel Market Opportunity 2017-2025

While the pre-Covid global travel market’s compound annual growth rate reaching 4.6 percent from 2017 to 2019, cites an Analysys research report it commissioned projecting that annual growth spurt to reach 10.6 percent during the 2021-2025 period. The report leans on data from the World Tourism Cities Federation and the World Tourism Organization.

From where it sits in Shanghai, noted that China has become the biggest global travel market.

“According to the Analysys Report, China has become the largest travel market globally in terms of the total number of domestic and inbound trips, which was 6.2 billion in 2019 and is expected to reach 7.5 billion in 2025, despite a drop in 2020 due to the COVID-19 pandemic,” stated. “During 2019, the market size of domestic and inbound travel in China was RMB6.6 trillion (US$1.0 trillion), accounting for 18% of the global travel market. ”

V-Shaped Recovery in China

Although several travel markets, such as Europe, have seen wave after wave of Covid outbreaks, hampering a recovery, China had a V-shaped rebound.

“China’s travel market has formed a V-shaped recovery, with 1.1 billion domestic and inbound trips in the third quarter of 2020, representing a 45% increase from the number of such trips in the second quarter of 2020, according to the Analysys Report,” the financial filing said. “The market is also expected to quickly rebound in 2021, reaching a total of 6.2 billion domestic and inbound trips, and to resume growth going forward.”

Dining, Shopping and Travel Advertising Are Growth Areas

The Chinese domestic travel market is forecast to see robust growth in various product types over the next four years, with transportation (a 3.4 percent compound annual growth rate in 2025, for example) and “other,” (3.2 percent), which is mostly dining and shopping, leading the way.

Source: Analysys Report

One area to look out for is advertising opportunities, an area that Group is heavily investing in.

The research report forecast that the travel advertising market in China will jump 47 percent to $21.5 billion by 2025.

“From the first quarter of 2020 to the fourth quarter of 2020, the quarterly average of daily visitors from our content channels, measured by numbers of mobile devices after removing duplicates, increased by over 80%, and the quarterly average of daily time spent on information feeds per visitor increased by over 100%,” Group stated. “As of December 31, 2020, we have introduced over 60,000 products through our live streaming platform and we achieved over RMB5 billion GMV in 2020. For the year ended December 31, 2020, over 40% of the users who transacted on our live streaming channels had made at least two purchases.”

Room to Grow’s strategy is to focus on growing its market share in China, and increasingly to service Chinese traveling or living abroad, particularly in Southeast Asia. As such, the company reported that it was the market share leader in China with a 13.7 percent share of gross bookings as of 2019. It’s closest rival had only a 3.8 percent share.

Globally, Group was the leader in gross bookings, which measures the total amount of travel sales, but not the amount revenue pouring into a company.

In 2020, the latest statistics available, Group was the gross bookings leader among online travel agencies at $61 billion, but its revenue $2.8 billion lagged that of both Booking Holdings ($6.8 billion) and Expedia Group ($5.2 billion).

Still, the chart above,, which covers pre-Covid 2019 numbers, shows that Group has plenty of room to grow — as does the $7.1 trillion global travel market by 2025.

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Tags: advertising, china, dining, research, shopping, transportation,, group

Photo credit: Group still sees huge opportunities in China, which has experience a V-shaped recovery. shankar s. / Skift

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