It's that time for online travel predictions

Phocuswright has again rolled-out its predictions for online travel. This time the focus is Europe.

Here are five predictions for the European online travel market in 2010 from the new report:

1. Online travel will account for more than one-third of the total European travel market.

While the total European travel market experiences a double-digit decline, online leisure and unmanaged business travel will in fact grow slightly in 2009. As effects of the recession linger into next year, consumers are increasingly shopping online for better deals. Online penetration will surge from 28% in 2008 to 34% by 2010.

2. Priceline could become the largest pan-European online travel agency (OTA).

Long in last place among the big four global online travel agencies (Expedia, Orbitz and Travelocity being the other three), Priceline has gained ground dramatically since the onset of the recession and especially through the success of its main European acquisition, Booking.com. Amid Orbitz' stumbles and Expedia's catch-up play with Venere, Priceline is poised to become the number two OTA globally and quite possibly the largest OTA in Europe (although Expedia may have something to say about that…).

3. Metasearch will make it in Europe—finally.

The highly fragmented European online travel shopping landscape—among OTAs and suppliers—could prove fertile ground for metasearch. Uptake of meta in Europe has lagged behind the U.S., but the growing incidence of online shopping is driving more consumers to visit metasearch sites when they plan their travel.

4. Germany gains ground amid the recession.

The lumbering giant of Europe's online travel market is picking up plenty of regional market share. The country's strong cultural affinity for travel is helping prop up demand as other European markets falter. Germany's share of the European online travel market will jump from 17% in 2008 to 20% by 2011. Gute Reise!


5. As larger markets mature, all eyes turn south—and east.

The largest European travel market, the U.K., has over 40% online penetration. France and Germany are catching up. Now that the low-hanging fruit is gone, the online travel industry is looking to opportunities in less penetrated Southern and Eastern European markets. Emerging markets like Poland offer perhaps the most promising opportunities for growth.

Source: Phocuswright

Online Travel Myths Unmasked at PhoCusWright Analyst Forum

PhoCusWright has unmasked 6 online travel myths at its first-ever Analyst Forum, held September 10 in New York City.

Here they are:

Myth #1: The number of online travel buyers in the U.S. is declining.

In fact, that number is on the rise, as documented in the recently published The PhoCusWright Consumer Travel Trends Tenth Edition. In 2007, approximately 70% of online travelers (that is, adults who have taken a commercial air trip and stayed at a hotel for leisure in the past year, and used the Internet in the past 30 days) bought travel online, compared to 63% in 2006.

Myth #2: More and more online travel shoppers use supplier sites than online travel agencies. While this belief is widespread in the travel industry, it is simply untrue, according to PhoCusWright, the travel industry research firm. In terms of popularity, online travel agencies are making a comeback (source: The PhoCusWright Consumer Travel Trends Survey Tenth Edition or “CTTS10“).

Myth #3: Travel agencies are experiencing a resurgence as travelers return to traditional purchasing channels. Not so. In reality, even many formerly exclusive offline buyers are migrating online for travel shopping and buying, according to CTTS10.

Myth #4: The next generation of travelers prefers to do everything online. The truth is, less than half of what 18-28 year olds spend on travel is spent online, according to The NEXTgen Traveler™ report, jointly published by PhoCusWright and Ypartnership.

Myth #5: Social networks and travel reviews have the greatest influence on travel decision-making. The NEXTgen Traveler™ report reveals that while social media is widespread, destination Web sites and online travel agencies are favored by nearly half of next generation travelers during the travel shopping process.

Myth #6: Online travel markets need high credit card and Internet penetration to succeed. The structure and ambitions of the travel marketplace are even more important drivers than infrastructure. Case in point is India, one of the most dynamic online travel marketplaces today, where roughly 98% of the population does not use credit cards or have access to the Internet.

Source: Phocuswright