Eyefortravel - European Online Travel Report 2008

European Online Travel Report 2008

EyeforTravel Research 7-9 Fashion Street London E1 6PX UK For queries contact: [email protected] www.eyefortravelresearch.com EyeforTravel Ltd, July 2008

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Table of Contents

European Online Travel Report 2008

Table of Contents

1.1

1.2 1.3

1.4

2.1

2.2 2.3 2.4

3.1 3.2 3.3

Executive Summary Methodology

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Chapter 1: European Travel Market

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Trends 1.1.1 The European travel market in perspective blue 1.1.2 Online versus offline market performance blue Online Penetration and credit card usage Top European Online Travel Markets 1.3.1 Overall 1.3.2 United Kingdom 1.3.3 Germany 1.3.4 France 1.3.5 Nordic region 1.3.6 Middle European 1.3.7 Southern Europe 1.3.8 Eastern Europe Forecasted Growth

17 17 21 26 33 33 34 39 44 48 52 55 61 65

Chapter 2: Travel Products in Europe

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Transportation 2.1.1 Air transport developments 2.1.1.1 Overall 2.1.1.2 Online revenue and sales models; traditional airlines versus low cost carriers 2.1.1.3 Online revenue by market 2.1.2 Train transport 2.1.3 Other transport methods; car rental, car ferry and bus transport Accommodation Package Tour Cruises

72 73 73 76 80 86 90 94 105 111

Chapter 3: Online Distribution

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Intermediaries Direct (Supplier) vs. Indirect (Online Intermediary) sales Travel Technology 3.3.1 Opportunities 3.3.2 Challenges

115 119 124 124 125

Appendices, Glossary

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List of Figures

List of Figures Figure 1: Figure 2: Figure 3: Figure 4: Figure 5: Figure 6: Figure 7: Figure 8: Figure 9: Figure 10: Figure 11: Figure 12: Figure 13: Figure 14: Figure 15: Figure 16: Figure 17: Figure 18: Figure 19: Figure 20: Figure 21: Figure 22: Figure 23: Figure 24: Figure 25: Figure 26: Figure 27: Figure 28: Figure 29: Figure 30: Figure 31: Figure 32: Figure 33: Figure 34: Figure 35: Figure 36: Figure 37: Figure 38: Figure 39: Figure 40: Figure 41: Figure 42: Figure 43: Figure 44: Figure 45: Figure 46: Figure 47: Figure 48:

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Global growth in outbound tourism, by region (including business travel) European travel market size European travel market, by country Leading European outbound travel markets European travel market, by sector European travel market, by sector and country Sector proportion of European travel market, by country Leading destinations of European outbound travellers European travel market size: online vs. offline European travel market size: online vs. offline European travel market size in 2007: online versus offline, by country European travel market, by country European travel market size in 2007: online versus offline, by sector European online travel market, by sector European online market growth, by sector Sector proportion of European online travel market, by country, 2007 Sector proportion of European online travel market Internet penetration: percentage of individuals who accessed the internet in the last 3 months Broadband penetration, per capita, per country Broadband penetration growth rate 2006-2007: per capita per country Number and value of card transactions (excluding e-money function) Total number of cards issued, per country Number of cards issued per inhabitant (2006) Effect of online research on brand chosen Top 10 websites visited at least once a month by European internet users Top 10 most popular products bought online by online shoppers Percentage of individuals who ordered travel and holiday accommodation over the Internet in the last 12 months Trends in online expenditure per online travel buyer, by country (€) Countries as percentage of overall online market Per capita online spend (€) Trends in UK online travel market Top UK holiday destinations UK Online travel market in 2007, by sector UK travel market sectors as a percentage of total travel market, 2007 Trends in UK online travel market, by sector UK online travel market, growth rates, by sector Trends in UK online travel market, direct versus intermediary sales Trends in UK online travel market, direct versus intermediary sales as percentages Most popular travel websites in 2007 Trends in German online travel market Top German Holiday destinations Trends in German online travel market, by sector Trends in German online air travel market German Online travel market in 2007, by sector German online travel market, growth rates, by sector German travel market sectors as a percentage of total travel market, 2007 Largest tour operators in Germany Trends in German online travel market, direct versus intermediary sales

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Figure 49: Figure 50: Figure 51: Figure 52: Figure 53: Figure 54: Figure 55: Figure 56: Figure 57: Figure 58: Figure 59: Figure 60: Figure 61: Figure 62: Figure 63: Figure 64: Figure 65: Figure 66: Figure 67: Figure 68: Figure 69: Figure 70: Figure 71: Figure 72: Figure 73: Figure 74: Figure 75: Figure 76: Figure 77: Figure 78: Figure 79: Figure 80: Figure 81: Figure 82: Figure 83: Figure 84: Figure 85: Figure 86: Figure 87: Figure 88: Figure 89: Figure 90: Figure 91: Figure 92: Figure 93: Figure 94:

Trends in German online travel market, direct versus intermediary sales as percentages Largest Travel agencies Trends in French online travel market French Online travel market in 2007, by sector Trends in French online travel market, by sector Trends in French online air travel market French online travel market, growth rates, by sector French travel market sectors as a percentage of total travel market, 2007 Trends in French online travel market, direct versus intermediary sales Trends in French online travel market, direct versus intermediary sales as percentages Most popular OTAs in France Trends in Nordic online travel market Trends in Nordic online travel market, by sector Nordic travel market sectors as a percentage of total travel market, 2007 Trends in Nordic online air travel market Nordic Online travel market in 2007, by sector Nordic online travel market, growth rates, by sector Trends in Nordic online travel market, direct versus intermediary sales Trends in Nordic online travel market, direct versus intermediary sales as percentages Trends in Middle European online travel market Trends in Middle European online travel market, by sector Middle European travel market sectors as a percentage of total travel market, 2007 Middle European Online travel market in 2007, by sector Middle European online travel market, growth rates, by sector Trends in Middle European online travel market, direct versus intermediary sales Trends in Middle European online travel market, direct versus intermediary sales as percentages Southern European online travel market, by country, 2007 Trends in Southern online travel market - total Trends in Southern online travel market - by country Southern European travel market sectors as a percentage of total travel market, 2007 Southern Online travel market in 2007, by sector and country Trends in Southern online air travel market Trends in Southern online travel market, by sector Southern online travel market, growth rates, by sector Trends in Southern online travel market, direct versus intermediary sales Trends in Southern online travel market, direct versus intermediary sales as percentages Top Spanish high street travel agents, 2007 Most visited Spanish travel websites (‘000) Trends in Eastern online travel market Trends in Eastern online travel market Trends in Southern online travel market, by sector Eastern online travel market, growth rates, by sector Trends in Eastern online air travel market Eastern Online travel market in 2007, by sector Trends in Eastern online travel market, direct versus intermediary sales Trends in Eastern online travel market, direct versus intermediary sales as %

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List of Figures

European Online Travel Report 2008

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List of Figures

Figure 95: Figure 96: Figure 97: Figure 98: Figure 99: Figure 100: Figure 101: Figure 102: Figure 103: Figure 104: Figure 105: Figure 106: Figure 107: Figure 108: Figure 109: Figure 110: Figure 111: Figure 112: Figure 113: Figure 114: Figure 115: Figure 116: Figure 117: Figure 118: Figure 119: Figure 120: Figure 121: Figure 122: Figure 123: Figure 124: Figure 125: Figure 126: Figure 127: Figure 128: Figure 129: Figure 130: Figure 131: Figure 132: Figure 133: Figure 134: Figure 135: Figure 136: Figure 137: Figure 138: Figure 139: Figure 140: Figure 141: Figure 142: Figure 143:

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European travel market size - online versus offline European market growth rates, past and future Trends in European travel market, by sector, past and future Internet penetration, last three months Percentage of individuals who ordered travel and holiday accommodation over the Internet in the last 12 months Trends in European Online travel market Trends in European Online travel market, by country Growth rates European online market, by country European Online travel market, by sector Online distribution, by country European Travel market, by sector European Online travel market, by sector European transport market size in 2007: online versus offline, by sector International airline passenger traffic market shares in 2007, by region, in terms of Revenue Passenger Kilometres (RPK) Air passenger traffic in Europe 2007 (actual ticketed passengers) International scheduled passenger traffic International scheduled passenger traffic, capacity and load factor Jet fuel prices on May 23rd 2008 Trends in the European airline ticket market, by type Airline market growth, by type Europe’s largest airlines, by total scheduled passengers carried 2005-2007 Trends in air ticket sales - Online versus offline Percentage of airticket sales online Trends in online airticket market, by type Top traditional airlines (brands), by overall scheduled passenger revenue, 2007 Major European Low Cost Carriers by estimated online revenue European airticket market, 2007, by type and country Trends in online airticket market, by country Online percentage of all sales, by country Online air ticket sales, by type and country European airports, passengers Top 25 European airports, according to low cost arrivals in the first 6 months of 2007 Low Cost Carrier movements and market shares in Europe Trends in European Train travel market, by country Trends in European train ticket sales - Online versus offline Percentage of train ticket sales online Trends in online train ticket market, by country (2007) Trends in online train ticket market, by country Proposed high speed rail network Trends in European transport market, by sector Trends in European ‘other’ transport sector, by country European ‘other’ transport sector 2007, by country Online European car rental and car ferry markets, by country Trends in Online car rentals, by market Trends in Online car ferry sales, by country Trends in UK Online coach ticket sales Top 25 European airports, according to low cost arrivals in the first 6 months of 2007 Average hotel prices in 2007, compared to 2006 Average hotel room prices in 2007, by country

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65 66 66 67 67 68 68 68 69 70 71 72 72 73 73 74 74 75 76 76 77 78 78 79 79 80 80 81 81 82 83 84 85 86 87 88 88 88 88 90 91 91 92 93 93 94 95 96 97

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Trends in European hotel market, by sector Trends in European hotel market, by country Trends in hotel stays, by country (million nights spent) Trends in European hotel expenditure, by country Trends in hotel expenditure - Online versus offline Trends in hotel expenditure - Online versus offline as percentages Percentage of hotel sales made online in 2007, by product and country Growth rates in online hotel expenditure, by country European online accommodation market 2007, by sector and country European online hotel distribution, by country Top hotel chains by estimated online sales in the European market Europe’s largest hotel chains Europe’s largest hotel brands Trends in European package tour market, by sector Trends in European hotel market, by country Package tour participants 2007, by country (‘000 people) Trends in European package tour expenditure, by country (€ pp) Trends in package tour expenditure - Online versus offline Trends in percentage of package tour sales - online vs. offline Percentage of package tour sales made online in 2007, by country Growth rates in online package tour expenditure, by country Online package tour sales, by country European online package tour distribution, by country Top tour operators by estimated online sales in the European market Trends in European cruise market European cruise market 2007, by country Trends in European hotel market, by country European cruise passengers, by country (‘000s) Cruise destinations, by country (%) European intermediary online revenue, by sector Trends in European intermediaries, by sector Trends in European online intermediary revenue, by country European intermediary online revenue, by country as percentages Online intermediaries 2007 in the European market Online intermediaries in the European market, by country Trends in online distribution proportions Trends in online European distribution Distribution in European online travel market, by sector Trends in online distribution, by product Proportion of each distribution method, by travel product Trends in air ticket distribution Trends in hotel distribution Distribution in European online travel market, by country Proportional distribution in European online travel market, by country Proportional distribution in European online travel market, by country

97 98 98 99 99 99 100 100 101 101 102 103 104 105 106 106 107 107 108 108 109 109 110 111 111 112 112 113 115 116 116 117 117 118 118 119 120 120 121 121 122 122 123 124 127

Appendix A Appendix B

List of Low Cost Carriers in Europe by country Annual leave by country

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List of Figures

European Online Travel Report 2008

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Executive Summary

European Online Travel Report 2008

Executive Summary European consumers travel more The European market accounts for a vast majority of international travel, sustained by a healthy and growing economy, an abundance of countries at its doorstep and the associated tendency of Europeans to take many trips abroad. A steady rise in GDP and spending power accompanies this parallel increase in travel. Even with looming global depression and rising oil prices, the European economy as a whole continues to perform well and 2007 travel revenue exceeds the previous year’s financial figures by 4%, approaching an estimated Euro 256 billion in sales. The UK and Germany remain the biggest source markets. Emerging travel markets in Eastern and Southern Europe As Eastern and Southern European GDP and spending power grows, they too are now tapping into the former luxury that is travel. Over the 2002-2007 review period, compound annual growth rates in expenditure have been highest in Southern and Eastern Europe, at 5%. Growth in online travel is also markedly more pronounced in these regions, where lower saturation rates of both internet penetration and travel expenditure have left more room for development. Online Travel Agents are starting to target CEE as a third wave target market. The sector breakdown of the overall European travel market remains stable Airline tickets accounted for a third (33%) of all European travel expenditure in 2007, followed closely by accommodation (32%). Package tours make up just under a fifth (18%), whereas other transport trails slightly behind accounting for 14% of travel expenditure. These proportions have remained relatively stable over the years. A regional analysis of the European travel markets has continued to reveal diverse patterns in terms of overall travel product expenditure as well as distribution. Air tickets account for the majority of sales in most markets apart from Germany, the UK and Middle European markets are the biggest spenders on airline tickets, whereas other countries spend more on other transport for example. Healthy marketplace for European hotels The European hotel sector is currently looking very healthy indeed, boosted by increased demand and supply. Occupancy rates have remained fairly stable but ADR and RevPAR have increased indicating better value sales. Europeans spent an estimated EUR 81 billion on accommodation in 2007, including travel within and outside of Europe. The majority is spent on hotel accommodation and other accommodation such as camping, hostels, etc make up 18% of the total. Southern Europeans spend the most on accommodation and next up are the Germans and these markets account for half of all hotel nights in Europe. However, it is the UK that spends over the average on accommodation pppn.

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Executive Summary

Expanding demographic of Internet users Around 20% of European households now have broadband connections, highest penetration in Nordic and Middle Europe and fastest growth recognised in Eastern and Southern European nations. Well over half of Europeans have claimed to have accessed the Internet in the last 3 months, 5% more than 2006 and a CAGR of 11% over the last 5 years. The Nordic region is the most internet savvy, with 81% internet penetration. Growth is more accelerated in the less saturated markets of Eastern and Southern Europe where online populations have grown with a CAGR of 22% and 13% respectively over the last 5 years. Growth in credit card penetration in Europe has been reported and the number and value of card transactions has been growing at a 13% CAGR since 2000. The online sales ‘revolution’ is not only extending to the emerging markets, there is a marked democratisation of the internet within all markets, with different population segments going online, notably the female population and ‘silver surfers’ who are looking for different products, creating new opportunities for marketing. The European online travel market reaches EUR 50 billion The relatively steady growth of the overall European travel market since 2002 masks a true explosion in online sales. The steady growth over the past 5 years is in fact fully accounted for by its online channels, as offline sales neither increased or decreased, with a CAGR of 0%. The online market has grown at a 41% CAGR in the 2002-2007 review period. Online market expenditure on travel products approached an estimated Euro 50 billion in 2007, a more than five fold increase from just under EUR 10 billion in 2002, representing a substantial CAGR of 41%. Online sales now account for a fifth (20%) of all travel sales, coming from under a twentieth (4%) in 2002. Offline travel expenditure still accounts for the vast majority of sales, but remained relatively stable in 2007, at around EUR 205 billion. The online market is closing in on the offline market in Europe but there still remains much room for growth in the online marketplace. Marked online growth in the hotel sector All online travel market sectors grew at least a fifth in value in 2007, though the hotel sector saw the fastest growth at 36%, as suppliers are becoming increasingly internet savvy and marketing their inventory through a variety of distribution channels. Plus, intermediaries and GDS’s are tapping into the vast array of independent hotels Europe beholds, by continuously increasing their inventory. There has been a six fold increase in online hotel sales in the last 5 years and reached EUR 9.5 billion in 2007, a 43% CAGR over the review period. The UK is currently the market leader for online hotel sales. Online sales now account for 12% of overall European expenditure on hotels and other accommodation and is expected to rise to around 21% by 2011. Other accommodation remains predominantly booked offline, with just 5% online penetration. However hostel intermediaries, led by the two leading consolidators in the market, have made spectacular progress with an 87% CAGR over the last 5 years. The European accommodation market is somewhat different from the US in terms of direct vs. indirect online distribution and currently 70% of sales are indirect. This reflects the fragmented nature of the European hotel market, dominated by independent rather than chained hotels.

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Executive Summary

European Online Travel Report 2008

Airlines continue to dominate the European online travel market Low Cost Carriers have had a significant influence over the size and growth of the online travel market in Europe. In fact, the airline sector currently makes up over half of the online travel market in Europe and the near exclusive online distribution of LCCs and rapid growth in this type of transport has certainly been a key driver. Traditional carriers are certainly following suit and improving online presence. Travel verticals reveal different distribution patterns but all reveal growth in the online channel Airline ticket sales are now more evenly distributed between online and offline channels, whereas the vast majority of hotel bookings are made offline. Hotel beds are still largely distributed via offline channels due in part to supply side dynamics and a large proportion of independent and family owned hotels which are yet to be distributed online. Online booking of cruise holidays is negligible so far, but in light of a recent boom in this type of holiday, opportunities for online branding and marketing are extensive. The train sector has seen the most continuous growth figures over the last five years, with a CAGR of 46%. It is the airline sector that remains to generate the most online revenue, reaching EUR 27 billion in 2007. UK remains largest online travel market The UK remains the single strongest performing market in terms of revenue and achieving nearly double the online ales of its closest contender Germany. The size of the UK online travel market has grown 18% on the previous year and account for 29% of all travel market value, trailed by Germany and France, all together making up about 62% of all online expenditure. Growth rates have slowed down but the UK remains one of the most dynamic markets, driven by innovative players and savvy customer base. The Nordic region has the highest amount of online sales and the UK is a close second, whereas Eastern European residents spent just 12% of all travel related products online. Germans spend the least per capita online Germans are second in Europe in terms of overall travel market value but they spend the least per travel buyer out of the leading travel markets in Europe. The online travel market has grown in Germany by 24% but still only accounts for 15% of overall travel sales. The figures here indicate enormous room for expansion. Regions continue to perform differently The French online travel market is third largest in Europe and has been growing at a faster pace than Germany and the UK, though values are lower. The Nordic region (Denmark, Finland, Iceland, Norway and Sweden) is arguable the most digitalised in Europe. The region boasts the highest proportion of online bookings, at 31% online penetration. Middle Europe (Netherlands, Belgium, Luxemburg, Switzerland, Austria and Republic of Ireland) hides some variety when it comes to travel buying behaviour. But all in all they are responsible for 10% of the total European online travel market, reflecting a 24% growth over 2006 and a substantial CAGR of 40% over the last 5 years. Southern Europe (Spain, Italy, Portugal and Greece) accounts for 13% of the European online travel market and

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Executive Summary

Spain has the major share of that. The internet is definitely gaining more importance, as is travel, and hand in had the online travel markets are growing. Suppliers are adapting their businesses and taking advantage of online sales platforms. Tremendous growth expected in Eastern European travel markets Eastern Europe accounts for just 3% of the total European online market, generating EUR 1.5 billion in 2007. Internet and broadband penetration are very low, posing a structural barrier for immediate growth, however the online travel market is set to grow tremendously over the next few years. An interesting pattern has surfaced in the analysis of spend per online travel buyer, with Eastern European e-travellers spending one of the highest per capita values. It is suggested that luxury or higher end products may currently dominate the online market here through broadband connections being limited to richer households. As connectivity expands in the region more mainstream products are expected to take off. More European markets set for an explosion in online travel Conditions for online travel buying are at their best in Nordic countries and the UK, where practical settings through the adoption of broadband and credits cards are complemented by cultural and supply side factors - notably trust in e-payment systems and an ever increasing number of online suppliers. Slower take up of online travel buying in Southern Europe and France are due to less digitalised societies and scepticism towards e-buying. However, e-travel is becoming more and more prevalent in these countries. In Eastern Europe we find conditions similar to that of Southern Europe a few years ago, where internet penetration is booming and travel suppliers are joining the hype, setting conditions for growth. UK expected to lose some market share in the European online travel market As internet broadband and credit card penetration continue their hold over the daily lives of Europeans, e-commerce will become more prevalent in countries that are currently more aversive to the trend. Growing exposure to online buying and subsequent trust is expected to develop steadily, as well as the amount of travel buyers in each market. The online travel market is forecast to grow at a CAGR of 14% until 2011, as growth rates slow in more mature travel markets. Growth will be ruled by innovation and diversification and accelerated by the expanding travel markets both online and offline in Southern and Eastern nations. The UK is expected to lose some market share in the overall European online travel market as other regions start to gain prominence. Room for brands to develop online In terms of direct vs. indirect distribution, little change is expected over the review period. In the more mature markets, the major players have become known and are even starting to consolidate. In markets with strong intermediaries more sales will continue to go through the brand names. Whereas in Nordic countries with less established OTAs there is a stronger direct distribution pattern and suppliers will continue to sell most of their travel product direct. Eastern Europe is a case apart, as the market is still relatively open,

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Executive Summary

European Online Travel Report 2008

and whether direct or indirect, the travel industry is called upon to build strong brands for the future. Fastest growth seen from LCCs and cruise Europe has a large number of LCCs and a rapidly expanding market. The UK accounts for nearly a quarter of total European air sector revenue. Eastern European airline sectors have grown substantially and have been driven significantly by LCC home grown brands. Low cost ticket sales have grown the quickest over the last 5 years in Europe at a 29% CAGR and cruises also grew in importance too at a 13% CAGR. Other sectors, however, did just marginally well, growing in line with the general economy indicating the overall European travel market is maturing. It is the online market where we find substantial growth rates. Airline sector pushed further to increase efficiency through online distribution platforms The transport sector as a whole accounts for the largest amount of sales in the European travel sector, accounting for 48% of sales at a valued of EUR 121 billion. The majority of this (73%) is sold offline. Profit margins are increasingly pressurised in the airline sector and companies are striving to maximise their efficiency. Restructuring distribution is one way airlines are tackling this and online channels are therefore receiving increased attention and their ancillary revenue strategies are helping to push online sales for other sectors too. Rail travel gaining prominence In light of current issues in the air transport sector relating to rising fuel prices, inconvenience of check-in, additional security measures and growing environmental concerns, rail travel is certainly gaining popularity amongst European travellers. Although the offline market is expected to stagnate, the online market will continue to do well, especially in Southern Europe. The development of the European high-speed rail network is also something to be watched. Online sales are catching up in other sectors such as car rental and car ferries and Germany performed particularly well in the online car rental sector, aided by strong direct sales and price comparison sites. Fragmentation in the car rental sector is a major barrier to online distribution and as in the hotel sector strong brand names are advantageous here. Traditional packages are making way for ‘experience’ travel and the offline market is declining in favour of online sales The focus is on ‘travel experiences’ and an increasing demand for dynamic packages and more niche travel products. The traditional European package tour across Europe seems to be stagnating at an estimated EUR 46.5 billion. An exception can be noted for Eastern Europe where all in one packages are seeing signs of growth. The Germans currently consume the highest volume of package tours, though spending less per person. Eastern Europe has seen a CAGR of 10% over the last 5 years, but the UK for example is losing ground with a negative CAGR of 6%. The stagnation in the market is strongly due to the erosion of offline sales.

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Executive Summary

There is a very healthy growth in the online package tour market, a CAGR of 40% (2002 - 2007) and an expected 16% over the next 4 years. The online penetration in the package tour sector is now at 15% and expected to reach 28% by 2011. The market is demanding tour operators to be innovative in dealing with the challenges in their sector as a multitude of direct suppliers are tapping into the tour operators’ customer base and the focus on ancillary revenues is driving the value of dynamically packaged products. The markets vary enormously in terms of the role of intermediaries in the package tour sector, with reasons behind this being the strength of existing brands in the offline market. At the start of 2007 the merger of the biggest tour operator’s show signs of restructuring led by these challenges. Rising demand for cruise products Cruises are making their way into the hearts of Europe’s new travel generation and although it remains the smallest sector, it has seen the largest average growth rate in the overall travel market, at 13% over the last 5 years. It now accounts for an estimated EUR 6 billion. The UK and Germany account for the majority of the revenues, but growth can be seen in Southern European countries, especially Spain and Italy. The vast majority of cruises are still booked offline. Online travel agents remain an important distribution channel for Europe Online travel agents still have a significant role to play in Europe. High fragmentation of travel product in Europe continues to spur the survival and growth of the indirect channel and creates a healthy environment for OTAs. Intermediaries generated estimated revenues of EUR 16.8 billion in 2007, about 34% of the online travel market. Intermediary revenue is expected to keep growing at a similar rate of the total online travel market. Airlines account for a large proportion of OTA sales (46%) and around 36% are hotels. Hotels are expected to continue to account for the largest growth figures, as the large number of intermediary sales find their way online. Intermediaries have the highest revenue in the UK, in line with higher online sales in general. Growth has once again been pronounced most in Eastern and Southern Europe. Intermediaries lack strength in the Nordic and Middle European markets, where they were bypassed by direct suppliers. In Europe the top sectors for online revenue, airline and accommodation, have nearly diametrically opposed distribution patterns. The vast majority (72%) of air tickets are sold directly to the consumer and in the accommodation sector, the vast majority (70%) of online revenue is channelled through intermediaries. Regionally there are noted differences in penetration of intermediaries. Direct sales are responsible for the majority of online sales in all markets, however their relative share varies significantly. The European Online Travel Report 2008 investigates these differences. Chapter One examines the overall performance and developments in the European travel market including online vs. offline distribution as a regional whole and by sector. Internet penetration, broadband penetration and credit card use are also reviewed. The chapter presents an in-depth discussion of trends in the top markets and other regions - UK, Germany, France, Nordic 5, Spain, Italy, Portugal, Eastern Europe, Middle Europe and Southern Europe and also looks at forecasted growth. Chapter Two explores the travel

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Executive Summary

European Online Travel Report 2008

sector distribution trends – airline, car rental, cruise, car ferry, rail, accommodation and package tours. Chapter Three explores the role of the online intermediaries and provides an analysis of the main OTAs and their activities. There is also a discussion of the direct vs. indirect distribution trends in the different markets and the report ends with a brief look at travel technology and the role of the GDS in EMEA.

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