The online travel sector in Southeast Asia is experiencing a robust recovery and growth momentum, driven by a global appetite for travel and, notably, a sharp increase in accommodation pricing across key markets.
The e-Conomy SEA 2025 report, prepared by Google, Temasek, and Bain & Company, highlights that the online travel sector is projected to achieve a Gross Merchandise Value (GMV) of US$33 billion across the ASEAN-10 markets in 2025. This represents a steady double-digit growth trajectory.
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Accommodation sector sees rate boost
A key contributor to the sector’s overall value growth is the accommodation market, which is enjoying strong growth underpinned by surging hotel room rates. Hoteliers, particularly in high-demand tourist destinations such as Singapore and Malaysia, have successfully raised average room rates by over 20 per cent.
This strategic increase has translated directly into healthier profit margins for hoteliers and significantly boosted the overall value of the accommodation sector within the online travel market.
Sector performance and growth metrics
Overall, the online travel sector’s GMV for the SEA-6 countries is projected at US$33 billion in 2025, reflecting 14 per cent year-on-year (YoY) growth compared to 2024.
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The revenue generated by online travel is keeping pace with this GMV growth, signalling effective monetisation. Revenue for the SEA-6 region is forecast to reach US$4 billion in 2025. The expansion of coverage to the full ASEAN-10 markets slightly increases the estimated GMV to US$33 billion for 2025, demonstrating stable growth across the entire Southeast Asian region.
Digital channels and monetisation models
In the online travel space, revenue is generated through two primary models: direct sales and third-party platforms. Airlines and hotels derive revenue directly through their own brand.com channels.
Conversely, online travel agencies (OTAs) function as intermediary platforms, earning revenue as a portion of the price of the sold goods or services.
This sector is crucial to maintaining the momentum of the broader digital economy. While the report notes that air passenger volume is projected to grow by 10 per cent from 2024 to 2025, the exceptional margin growth experienced in the accommodation segment (due to rate increases) provides a distinct and immediate financial tailwind for the sector, making online travel a bright spot for profitability and growth in 2025.
Strategic regional cooperation
The growth forecast remains cautiously optimistic. However, the sector’s long-term health will depend on how the region manages macroeconomic uncertainty and leverages catalysts like greater cooperation among SEA nations.
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The continued ease of travel and interoperability across borders will be essential for sustaining this recovery trajectory, particularly as the region navigates potential global headwinds.
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