Twenty years ago if you wanted to go on a Lads Holiday to Magaluf you had to round up all of your mates and head down to the travel agents. From the other side of the desk, the travel agent would tailor your trip from beginning to end and then charge you an eye-watering amount for the privilege.
Or conversely, if you and the girls were looking for a weekend getaway you might be able to get a cheap deal through Teletext.
Today’s holidaymakers have to go to no such trouble with weekend breaks, fortnight trips and even months upon months of travelling are all easily booked through our phones.
The internet and smartphones have had a huge impact on this transformation, but it is online travel marketplaces like AirBnB, BorrowaBoat and SkyScanner that have made travelling about cheaper and more accessible than ever before.
In this article we take a look at the impact that these marketplaces have had on the travel industry and attempt to predict whether their phenomenal growth will continue in the years ahead…
Online Marketplaces: What are they?
Technology has innovated many online travel marketplaces to our advantage.
Online travel marketplaces are platforms in which buyers (holidaymakers) are connected to sellers (hotels, holiday property owners etc). When you log on to AirBnB for example, you can enter the dates you want to travel and the location and be greeted with hundreds of holiday homes, hotels and BnB’s available in that area.
Likewise, when you log on to rent a boat from BorrowaBoat, you will be greeted with results ranging from super yachts that cost thousands of dollars a day to hire, to smaller, more affordable vessels.
The marketplace will connect you with huge companies seasoned in boat hire as well as private, approved individuals offering to rent out their boats and/or services as a captain.
(What makes AirBnB so Successful? Watch this to find out.)
Why do they work?
The idea sounds relatively simple, so why does it work so well? Well traditionally, if you wanted to stay in a hotel you were more often than not forced to book through a travel agent who had a limited selection of hotels on offer.
As a result of this limited selection, the hotels and agent could fix their prices at a rate that maximised profit both for the hoteliers and the agents. Online marketplaces have no limit to the number of sellers that they can have on their platforms.
AirBnB for example has 5.6 million active listings worldwide in over 100,000 cities and BorrowaBoat has over 45,000 boats available for hire in 65 countries.
Those numbers are staggering when you compare them to traditional travel agents who may have had a dozen hotels on offer in a given country.
The sheer number of listings available on these sites leads to naturally lower prices as the sellers are forced to price their accommodation/boats at competitive prices to attract renters.
It’s not just price points that make these online marketplaces so successful though, there is also an element of ease, accessibility and comfort.
Whilst a hotel room with all white furnishings and a balcony view is nice, it’s no match for a beach side house with a fully functioning kitchen, lounge and private pool. Which, if you use AirBnB, you can almost certainly find for a similar price to a hotel.
Similarly, boat hire through BorrowaBoat is as simple as taking a few clicks and entering your card details online. There’s no hassle, no middle man to contact, no awkward conversations over email in pigeon English. It’s just simple and straightforward, and that sells in 2022.
Modern consumers crave instant gratification and we are living in a world of ‘want now’ where we are all used to having the latest movies at the tip of our fingers, our favourite games on demand and next day delivery guaranteed on our latest purchases.
Online travel marketplaces fulfil that desire for instant gratification which is part of the reason they are so successful.
(BorrowaBoat offers the instant gratification that modern consumers crave.)
Can online Travel Marketplaces Continue to Grow?
Two things need to happen for online travel marketplaces to either stagnate or go backwards and they are:
- The arrival of a new and improved alternative
- Customers to get bored with them
Neither of those things look like happening any time soon. In fact the success of online travel marketplaces has led to a whole host of copycat sites popping up, which has reduced the chances of a viable alternative emerging.
What about customers getting bored with their favourite online travel marketplaces? Well that doesn’t look like happening anytime soon either. In 2021 AirBnB generated $5.9 billion in revenue, a 73% year-on-year increase and saw a 55% increase in bookings.
After launching in 2017, BorrowaBoat has also experienced huge growth figures, although nowhere near the billions posted by AirBnb. Recent annual growth figures showed a 300% growth in revenue for the boat charter company.
In addition to that, the global yacht charter market is projected to reach $25 billion by 2027 and with BorrowaBoat busy acquiring most of its competitors, the future looks bright for the British based company.
Online travel marketplaces are the present and immediate future of the travel industry, there’s no escaping that. If their success tells us anything though, it is that markets are always adapting and improving.
At some point in the future, something bigger and better will come along to take their place, but until then, BorrowaBoat will continue to grow their market share.