Budget hotels drive Southeast Asia’s online travel growth to $34 Billion

Southeast Asia’s online travel sector grew to $34.4 billion this year, from $29.7 billion in 2018 and $19.4 billion in 2015, according to the latest study of the region’s internet economy released on Thursday by Google, Temasek, and Bain.

The rise of budget hotels, led by brands such as Oyo Rooms and RedDoorz, is a highlight, according to the report. Queries for selected budget hotel brands soared in 2019, up more than nine times compared to 2015, according to Google Trends.

“These companies offer reliable accommodation at a fraction of the price of international hotel brands, aimed at youth and cost-conscious travelers from within and outside of Southeast Asia.

“After becoming popular in India, such services are mushrooming in Southeast Asia, where there are thousands of budget hotels and guesthouses scattered across the region waiting to establish a presence online,” said the annual research, conducted since 2016.

Another highlight is investments made by online travel players in experiences, which is “driven by the insight that for every dollar spent by travelers in flight and accommodation, a varying multiple of that is spent during the trip itself.”

Online travel aggregators such as Indonesia’s Tiket.com and Booking.com have also expanded their reach by building partnerships with ridehailing players including Gojek and Grab.