Australian travellers are expected to take fewer high value international trips, slowing industry growth, according to a new IbisWorld research.

“The industry has received substantial attention from the increasing number of Australians travelling domestically and abroad, aided by the strong dollar over much of the past five years and greater airline capacity through the Qantas and Virgin rivalry,” Ryan Lin, IbisWorld industry analyst says.

Although the Australian economy was affected by the financial crisis during 2007-08 and 2008-09, Australians did not alter much in the way of their planned travels.

IbisWorld expects that there was a jump in the uptake of online travel search over these years. As a result of this, the industry has grown phenomenally over the past five years, with revenue increasing at an annualised 16.6 per cent to reach $412.6 million in 2013-14.

Revenue is forecast to grow by 14.4 per cent in 2013-14, slightly lower than over the previous five years as the Australian dollar falls in strength. Australians are expected to substitute cheaper domestic travel for the now more expensive international travel.

The industry’s robust growth is expected to continue over the next five years.

According to Lin, “the lower Australian dollar is expected to restrict the growth of high-value international travel, resulting in slower growth rates for the industry.”

Industry revenue is still expected to grow at double digit rates. This significant growth is expected to be driven by the increasing sophistication of mobile technology and high levels of internet usage, with a larger proportion of consumers choosing travel booking websites than ever before. This is likely to result in higher competition for the industry as profit margins begin to fall and industry operators seek out niche markets.

The online travel bookings industry has a moderate level of market share concentration. Apart from the two major players, Wotif.com Holdings and Webjet, enterprises are quite small and are not expected to hold more than five per cent of industry revenue individually.

Concentration has grown slightly over the past five years, however, it is expected to fall marginally over the next five as enterprise growth exceeds industry revenue growth.