Exclusive Insight for executives looking at how and where to invest to sell more travel across Europe.

Published: 02 Dec 2009

Exclusive Insight for executives looking at how and where to invest to sell more travel across Europe.

All research indicates that the travel industry is shrinking (2% globally in 2008), but if you are reading this then you’re lucky. I am assuming here that you are an online travel exec, and therefore in the only growth sector of the industry.

Despite the downturn, online travel is the only area where there is clear growth. In Europe, the world’s largest tourism market (in terms of spend), travellers in all countries and regions are heading to the online distribution channel. Over the last 7 years online travel buyers have increased their spend by 40% and Eyefortravel predicts this will continue to grow by a further 15.6% by 2012.

Our latest research into the European Online Travel Market gives an incredibly detailed look into the buying patterns of European online travel consumers. I have spent days looking at this huge report trying to find a theme or a trend to blow the industry away, a synopsis to make the perfect Tweet and sum up this market… but I can’t. If this report is anything to go by the European Union is damned. Aside from growth, there is no consistency in terms of travel product bought online or timelines to online travel market growth, so god knows how they will ever agree to anything else.

Let’s start with the timelines. We covered every market in Europe, on a country by country basis for the major travel markets (such as UK, Germany, France) and groups for the smaller markets such as Southern Europe, the Nordic countries, Middle Europe and the 12 New. Our predicted dates when the online channel will overtake the offline channel are hugely varied.

From the graph below we predict that more UK consumers will be buying online rather than offline by 2012.

However, Italy, that country full of mobile users, is getting nowhere near these levels. My investigation into why this was (undertaken in beautiful Chianti this September) came up with veiled comments about Burlosconi’s desire to keep TV advertising the biggest media channel and that the mafia launders cash through the industry so credit card payments were frowned upon!

When it comes to different product penetration the European online market is equally diverse. The big exception is flights. As it did in the beginning flights sales continue to drive the online travel industry. But why do German’s hire cars online (well 57% of German car hire consumers do) but Scandinavians don’t (only 20%) And why, with car hire so firmly bought online, do German’s refuse to buy online packaged travel products? Whilst the Scandinavians now buy a staggering 50% of their package holidays online.

This is only a tiny example of why this rich market is so complicated to sell to. But it’s not only understanding online buying trends that are going to dictate the winners and losers in this space. Technology is once again going to cause an upset.

Mobile, and particularly mobile web browsing is about to have huge impact on how you sell travel. In the face of falling sales and panicking CFOs, the whole industry has slowed or stopped investing in new ideas. Unfortunately the stats say that more and more online travel consumers are accessing the web via their mobile. Unlike online tools, mobile will impact every stage of the consumer buying cycle. Again, penetration rates and usage differ with every market but the industry needs to invest and whilst some companies are, (Hilton for example are reporting incredible ROI from their experiments with mobile), a lot of major travel companies seem to have their heads firmly in the sand. A huge opportunity for the Lastminutes and Expedias of tomorrow.

The graph below shows the difference in mobile web browsing across Europe and the US.

In the UK mobile browsing is growing by 32% but mobile travel content being accessed grew by just 4%. Apart from in Italy, travel is doing something wrong!

Maybe the secret of working out where and how to invest is to truly understand how different Europeans want to spend money online. In May I talked to Cash Ticket, a vendor of alternative payment solutions. Apparently 67% of adults in the EU don’t have the ability to make an online deposit. That means if you sell travel online you are ignoring 400 million customers across Europe. The UK, often seen as the credit card and e-commerce leader in Europe, now has more hard cash in circulation than ever before and last year saw a 4% rise in cash transactions (British Retail Consortium). If you look across Europe it gets more and more bleak.

Source David Hunter, CEO, Cashticket

The bottom line is that the European travel consumer is a lucrative but complicated creature and you need to know where and on what to spend your money.

It’s enough to give any travel exec a headache, but here at EyeforTravel we have the cure through a wealth of research and facts and opinions built up over 12 years of researching the online travel space. Take a look at the research we have at our website, www.eyefortravel.com or call Tim Gunstone on 0207 3757557. We will try and answer your questions!