Key takeouts on European online travel trends

17 November 2011

It took a herculean effort to squeeze into the meeting room where delegates were packed in like sardines to hear from Clemont Wong and Florence Kaci from Phocuswright share their latest insights into the travel trends of the French, German and UK visitor. The research was carried out with consumers and travel suppliers in each market in 2011.

The key takeouts on online travel were as follows:
Europe poised to overtake US, driven by OTA growth
By 2013 Europe is poised to overtake the US as the place where most online travel booking is going to happen as a proportion of total travel bookings and much of this growth will be driven by the expansion plans of the Online Travel Agents (OTAs) who are moving to Eastern Europe. Players such as have expanded rapidly and others are consolidating their power in Europe as we learn that Opodo, Go Voyage and eDreams have joined forces and HRS buys

Smartphone usage driving European online travel
The use of smartphones is changing how people book online, especially in France and the UK with the higher ownership rates.
Legacy carriers facing threats
As the traditional carriers are challenged by the Middle East airlines on long haul routes and the EU carriers are lobbying the EU to introduce a carbon tax on non EU carriers it’s likely that this sector may see some modest recovery in France, Spain and Scandinavia. UK growth was largely driven by an uplift in business travel, which has also benefited Scandinavia.
Growth of rail
The other threats to the airlines are the changes in the rail landscape which will challenge all flights less than 5 hours. We see Deutsche Bahn showing more interest in the UK rail industry and new entrants such as Silver Rail, which are starting to offer more seamless European online rail booking services by harmonising the national distribution systems.
Image of all-inclusive tarnished
The report interestingly featured on the tarnished image of all-inclusive and the consumer’s perceived lack of benefit to local economies.
Car hire forecast to grow
Their findings forecast strong growth with car hire as players such as Hertz using Facebook to broaden their distribution and reach more eyeballs. There is a trend to shorter pay per hour car hire programmes such as Zipcar and Hertz on demand.
Large tour operators buying specialist players
The survey focused on the decline in usage of travel agents and mainstream long haul tours in all markets. Speakers focused on how tour operators are purchasing specialist operators such as adventure and school trip operators to provide niche growth opportunities to stem the loss of other mainstream business.
Holiday home rentals will be popular for 2012
This was one of the most surprising findings of the Phocuswright report, given that other research players such as Mintel have claimed that this market it not growing.
Phocuswright quoted players like Homeaway, Airbnb, Wimdu as evidence of the arrival of the vacation rental sector as it becomes easier to book this product with integrated customer reviews and as travellers switch their travel spend to self catering.
Rise of the mobile trip management apps
Blackberry Travel was quoted as a key application that will drive forward greater usage of smart phones for travel booking.
Youth drive future online travel growth
The consumer survey in UK, France and Germany also emphasized that online travel would be driven by 18-34 year olds. However there were words of caution about future travel intentions in the UK as a quarter of those interviewed were uncertain about their travel plans for 2012. All markets surveyed showed a trend to take a smaller number of trips with longer stays and the French and German travellers were the most optimistic about their future spend with more than a third of French showing an interest in non EU long haul travel.
Destination sites losing their appeal
The survey showed a marked decline in the usage of destination sites as travellers relied more on the travel content of review sites such as Trip Advisor and the OTA sites for their information. This was surprising given the recent press criticism about the integrity of Trip Advisor reviews. This indicates that tourist boards will have to innovate and provide richer content and user generated content to compete with their new rivals.
Social media adoption
Germany was seen as the least social media savvy market in Europe where it’s seen mostly as a business tool for networking with colleagues. However in the UK, Facebook usage reached 66% and it’s used much more in a social context to network with friends.
The speakers were asked for their view on the most likely non EU destinations to be visited which were as follows:
French – Francophile Africa and Asia
Germans - SE Asia, China and India
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