Despite the fact that this industry is forecast to experience growth on the back of growing travel demand, there are a few emerging trends that threaten this forecast
Los Angeles, California (PRWEB) November 02, 2011
After fighting declines, the Travel Computer Reservations System industry has begun its recovery, with revenue forecast to continue to grow in 2011 and 2012, according to IBISWorld, the nation’s largest publisher of industry research. IBISWorld forecasts revenue will increase to $3.1 billion through 2016. At the same time, however, the industry will also have to content with airlines and other travel operators developing new services and methods to avoid computer reservation systems (CRSs) and encourage consumers to book directly with the travel operator's website.
After a disappointing couple of years in 2008 and 2009, when revenue in the Travel Computer Reservations System industry declined in response to the sudden drop in travel rates and travel demand, the Travel Computer Reservation System industry reestablished its previous upward trajectory, growing in 2010 and thus far in 2011. Despite strong prior growth, IBISWorld estimates revenue will fall over the five years to 2011, largely due to recession-related declines.
A number of factors have influenced the Travel Computer Reservations System industry over the past five years, including the state of the economy, the state of the airline industry and other travel-related trends. With consumer spending plummeting during the recession, consumers were less likely to spend money on nonessential travel, pushing down computer reservation system (CRS) companies' commission rates and fees as consumer scaled back on spending. Industry revenue was also negatively affected by falling domestic travel and international arrivals into the United States. In 2009, inbound trips by non-US residents plummeted, with 5.2% fewer people visiting the United States than in 2008. Domestic travel also declined in the year, falling 5.1% from 2008. With fewer people taking trips, industry revenue dropped in line with booking rates (along with fees and commissions paid to the CRS industry). In 2010, however, inbound travel returned and grew 8.7%; it is forecast to grow 6.2% in 2011. Domestic travel increased 1.9% and 2.4%, respectively. As such, a greater number of consumers and business customers are taking trips and a percentage of that rise will likely flow into CRS companies' coffers.
According to IBISWorld analyst, Nima Samadi, from 2011 to 2016, industry revenue is forecast to increase at an average annualized rate of 4.1% to $3.1 billion. “Despite the fact that this industry is forecast to experience growth on the back of growing travel demand, there are a few emerging trends that threaten this forecast,” says Samadi. Airlines and other travel operators are trying to bypass global distribution systems (GDS), a type of CRS, to sidestep paying their fees and, instead, drive traffic to their own websites. The leverage airlines have has compelled GDS providers to lower their fees in the past and may also force them to in the near future, which could further reduce travel CRS industry revenue and profit margins.
For more information, download the full report from IBISWorld on the Travel Computer Reservations System industry
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