PhoCusWright’s European Online Travel Market Overview Fifth Edition shows a market in transition from the high growth rates of the past few years to a drop in the overall market and slowing growth in the online segment with no immediate relief in sight. The detailed analysis of individual markets shows evidence of significant differences in consumer behavior related to travel planning and purchasing among countries and regions covered. No single, homogenous market exists resulting in a number of challenges for companies active across Europe. The report provides the complete scope of information necessary to navigate these challenges travel companies are facing today and in the future.

Some of the key findings in the report show that the major European travel markets have undergone significant changes since the onset of 2008. Along with the rest of the globe, the economic softness that began to appear through the course of the year worsened abruptly in the fourth quarter of ‘08. The prosperous early months of 2008 were followed by a summer of astronomical fuel prices and a fall season starved of the usual business travel swell.

The downturn continues in 2009, and the data show a projected 10% decline for the total European market and Europe’s online bookings are expected to just barely avoid negative territory. Traditional airlines and car rental companies will be the hardest hit – both are projected to decline by 14%. Rail (-1.7%) and low-cost airlines (-2.8%) will fare the best among suppliers.

What the report also clearly shows is the significant difference in the level of online penetration in various key regions and markets.  With a 45% penetration rate in 2009, Scandinavia far exceeds the 28% average for Europe and has surpassed the U.K.. On the low end, the data show 20% penetration in Spain and 14% in Italy. Various market specific conditions and factors are responsible for this including Scandinavia having the world’s highest overall internet penetration and the market influence of traditional travel agencies in Italy.

What is interesting to note, is the indication of a correlation between these travel specific online penetration numbers and the general consumer behavior related to social media and social networking shown in a recent study on “European Social Media Trends – Behaviour, Impact, Evolution” by Globalwebindex.com (their slideshow is below). Notice especially #12 – #13 – #16 – #17 – #19 which highlight significant divergence in the social media engagement among different countries. Besides the structural differences in various markets it will be interesting to follow the development of the shift to online channels caused by non-travel specific behavior related to search, shop and buy.

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