Digital MarketingStrategiesEuropeans Increasingly Turn to Net for Travel

Europeans Increasingly Turn to Net for Travel

The European online travel market will grow nearly 300 percent in two years -- from $2.9 billion in 2000 to $10.9 billion in 2002 -- according to a report by PhoCusWright, Inc.

The European online travel market will grow nearly 300 percent in two years — from $2.9 billion in 2000 to $10.9 billion in 2002 — according to a report by PhoCusWright, Inc.

The report, “The European Online Travel Marketplace, 2000-2002,” found that the factors contributing to the growth spurt were continuing strides in Internet and wireless usage; the breakdown of e-commerce barriers such as bill payment, security, and privacy concerns; improved telecommunications; and the influx of new and improved online travel services. The emergence of the Internet and online commerce in Europe also coincides with the rise of the European Union (EU), creating one unified economy and, eventually, one common currency — the euro.

“Increasingly, Europeans are able to access the Internet using flat-rate payment plans instead of having to pay for Internet access by the minute, which had been a major constraint,” said Kate Rice, director of information services at PhoCusWright, Inc. “At the same time, several online players have begun to build significant market share — raising public awareness of travel e-commerce in the process. The greatest potential of the Internet is in its global capabilities and nowhere is that more true than in online travel.”

Airline Web sites and tour operators controlled 28 percent and 27 percent, respectively, of the European online travel market in 2000. Online travel agencies had a 26 percent market share; railways, 9 percent; hotels, 7 percent; and car rental companies, 3 percent.

Other key findings include:

  • Unlike in the US, supplier Web sites dominate the online travel market in Europe. Airlines, tour operators, hotels, railways, and car rental companies represent 74 percent of the European online travel market in 2000, while online agencies’ share is 26 percent.
  • The acquisition of Degriftour by lastminute.com makes lastminute.com the second largest online travel agency in Europe, with estimated combined gross bookings of $116 million. Ebookers.com is number one, with $150 million in projected gross bookings. Expedia.co.uk ranks third.
  • Airline Web site sales will total $810 million in 2000, while $382 million of airline tickets will be sold through online travel agencies. The two airlines with the largest online bookings — easyJet and Ryanair — book 100 percent of their Internet sales on their own Web sites. Each sells at least half of all tickets online.

The report evaluated the market by interviewing e-commerce executives at nearly 50 European-based airlines, hotels, tour operators, rail companies, car rental companies, ferry lines and travel technology companies.

The Internet European Travel Monitor produced by IPK International and Luc Carton, publisher of the eTourism newsletter, found that in 1999, 5.2 percent of trips abroad taken by Europeans were initiated on the Net but booked and paid for offline; 1.2 percent were booked and paid for online.

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