4 Ways Technology is Changing Southeast Asia’s Travel Industry

Online travel is spearheading Southeast Asia’s growth

With some of the world’s most popular tourist destinations, tourism and travel are essential parts of Southeast Asia’s economy. Here’s how technology is changing Southeast Asia’s online travel industry and all the trends you need to know.

1. Online travel is the largest player in Southeast Asia’s internet economy

Southeast Asia's many tourist destinations are pushing it to become an active travel market.
Southeast Asia’s many tourist destinations are pushing it to become an active travel market. Image Source: Ninara on Wikimedia Commons.

Online travel is the largest and most established segment of Southeast Asia’s internet economy, according to research by Google-Temasek. Since 2015, online travel has held the most significant share of the market compared to ride-hailing, online media, and e-commerce.

In 2018, online travel in Southeast Asia had a gross merchandise value (GMV) of about US$30 billion, based on bookings. That’s 41 percent of Southeast Asia’s internet economy market.

Google-Temasek projects e-commerce to become the most significant contributor to Southeast Asia’s internet economy — however, online travel is still on track to grow substantially. The online travel market is expected to grow 15 percent year-on-year, reaching a GMV of US$78 billion by 2025.

2. More travelers are looking for services online

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Platforms like Traveloka are changing the way travelers book and select services. Image Source: DailySocial.

Travel bookings are increasingly being made online compared to offline. In 2018, about 41 percent of all travel bookings in Southeast Asia was done online, compared to 34 percent in 2015.

Data from Google-Temasek suggests that travelers are starting to favor online channels operated by online travel aggregators (OTAs), airlines, and hotel chains. About 57 percent of bookings will be made online by 2025, surpassing traditional travel agents, call centers, and in-person bookings at hotels.

Online travel aggregators (OTAs) like Agoda, Booking.com, Expedia, and Traveloka offer a convenient way for users to book services, compare prices, and check availability. Also, Southeast Asia boasts over 350 million internet users across Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. As such, OTAs are becoming a more accessible and appealing option for Southeast Asians.

3. Online flight, hotel, and vacation bookings are growing

Disruptive platforms like Airbnb are becoming increasingly influential players in the travel industry.
Disruptive platforms like Airbnb are becoming increasingly influential players in the travel industry. Image Source: Taiwan News.

The Google-Temasek study classifies the online travel sector into three categories, which are:

  • Online flights,
  • Online hotels and
  • Online vacation rentals.

Online flight booking is the largest segment in this field, being worth US$18 billion in gross merchandise value in 2018. Most airlines already offer online bookings through their websites, apps, or OTAs, so this segment is more mature in comparison with online hotels and vacation rentals. Still, the GMV of online flight bookings is projected to grow to US$40 billion by 2025.

Likewise, research suggests that the GMV for online hotel bookings will grow from US$10 billion in 2018 to US$36 billion in 2025. There’s still room to grow in the budget hotel category, but OTAs focused on budget lodgings like OYO and RedDoorz are quickly bringing these smaller businesses online.

The last and most dynamic segment is online vacation rentals for private homes and rooms like Airbnb. This sector still faces challenges — such as uncertain regulations and consumer trust — but it promises to become an exciting new opportunity. Online vacation rentals have the potential to grow to almost US$2 billion by 2025.

4. Indonesia leads the way in online travel

Soekarno-Hatta International Airport in Jakarta, the busiest airport in Southeast Asia.
Soekarno-Hatta International Airport in Jakarta, the busiest airport in Southeast Asia. Image Source: Gunawan Kartapranata on Wikimedia Commons.

In terms of valuation, Indonesia is the largest online travel market in Southeast Asia, with a GMV of US$8.6 billion in 2018. The country has a very active industry of both foreign and domestic tourism, especially in Bali and Jakarta.

Indonesia also has the fastest-growing market in the region, aided by the rise of companies like Traveloka — one of its four unicorn startups. Other emerging companies, such as Pegipegi and Tiket.com, are also helping cement tourism as a mainstay industry in Indonesia.

However, other countries in Southeast Asia are also quickly growing both as tourist sources and destinations. Thailand — the second-largest market in Southeast Asia —  had a GMV of US$6.1 billion in 2018. Singapore — with US$5.5 billion in GMV in 2018 — is the third-largest market.


Which businesses would benefit?

Online travel is a competitive market in Southeast Asia, but there’s still a lot of potential for businesses to grow. As the economy develops, Southeast Asians will get more buying power as well as increased access and preference for online platforms.

Entrepreneurs can also tap into the indirect results of this growth — the rise of tourist traffic in Southeast Asia. More tourists means more customers, which can be significant opportunities, even for businesses outside the sector.


Greenhouse offers an online platform for you to book business incorporation services and connect with market entry consultants in your target markets.

We’ll connect you with experienced consultants on the ground who can help answer your questions about doing business in Indonesia.

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