Webjet (ASX:WJL) faces tougher competition as its larger rivals have an advantage in the business-to-business segment, as scale is expected to be key for growth, according to a Friday Jefferies note.

Jefferies believes that the leisure travel sector has fully recovered from the impact of COVID-19, and the sector's travel transaction value is expected to grow at a mid-single-digit rate for the next few years.

The investment firm noted that Webjet's rival Expedia reported increased margin in the business-to-business sector, despite a lower take rate helped by its larger scale and artificial intelligence.

Jefferies kept a hold rating on Webjet wth a price target of AU$0.95.

The company's shares rose almost 1% in recent Monday trade.