Five predictions for the European travel market

The end of the year is the time for all kinds of predictions for the next one. Usually, I treat such conjecture as the bullshit that it is, but when PhoCusWright puts out a list of what’ll happen for the travel market, I tend to take it a little much more seriously.

The worldwide recession is still squeezing the European travel market, but the online sector is likely to be the star next year, as it was in 2009. Consumers are turning to the web more and more to book their travel in Europe, and this will have a profound effect on how travel products and services are sold.

1. Up a third: PhoCusWright forecasts that the online segment of the travel market will hit 34 percent of the entire industry in Europe in 2010. Customers will turn to the internet to find better bargains, accelerating the shift from offline to online. At the end of 2008, online accounted for only 28% of European travel sales.

2. Priceline’s the one to beat: Priceline has lagged the three largest online travel agencies – Expedia, Orbitz and Travelocity – for years, but Priceline has seized some serious market share through the travel recession, due in large part to its acquisition of European company Priceline could take the #2 spot next year and will be well-positioned for the future.3. Metasearch arrival: Finally, there will be a solution to the fragmented online travel market! PhoCusWright forecasts the growth of sites that search across sites, which makes sense given that financial concerns are driving travel buyers to the web instead of traditional venues. There’s demand already, and economic conditions will feed the trend.

4. Big in Germany: Germany’s been gaining ground in the European travel market. In 2008, the country was responsible for only 17 percent of the space. Look for it to hit 20 percent by 2011, PhoCusWright says.

5. Look south for sunshine: Online penetration has topped 40 percent in the United Kingdom, and France and Germany are making progress. The easy wins are in the past. So, the travel business is looking toward the emerging travel markets of Europe: in the south and east.

There’s plenty on the agenda for the European travel market next year. Even in what will continue to be a tight economic environment, there’s plenty of room for growth. No doubt, the most important factor will be the recession, which will shape travel company behavior by driving buyers to seek better deals. The perception that online is the place to save will accelerate the push to electrons.

Microsoft and Travelport Make Travel Services Dream Team

Microsoft has collaborated with the travel technology company Travelport before. The two giants of their respective industries teamed up to create the pricing system that was first used on Expedia and is now used by all of Travelport’s clients. Think Microsoft’s profit power has been impressive for the past couple of decades? What about Travelport? The company flies below the radar in terms of brand recognition, but their searching and processing services are used by more than 63,000 travel agencies per day.

A new deal inked by Microsoft and Travelport would expand the alliance. The two giants would work on a comprehensive set of tools and services for travelers, travel agencies and internet ticket booking sites. Theoretically, at this point anyway, the development of better price searching technology could lead to lower travel costs for travelers and more chances for profit from travel agencies.

Microsoft exec Geoff Cairns had big things to sat about the relationship with Travelport:
“In bringing together Microsoft’s rich, interactive technologies with Travelport’s deep marketplace of travel content and informed choice, we are creating a completely innovative solution for the travel industry. This will improve the traveller experience with a new level of personalization and change how suppliers, TMCs, and OTAs reach travellers.” Too good to be true? Time will tell.

Getting a travel agent–or not

Yesterday I ran into a woman I know who is an avid traveler. Her trips are the type where you learn a thing or two–historical trips of famous European paintings, or something. I can’t quite remember, but I do know they are themed versions that she researches herself based on her interests. Yesterday, she told me she recently retired and is off this month to Hungary and another country whose name escapes me. (It’s a Kellie Pickler moment, not to be mean. We all have them.)

She mentioned how she has arranged this trip herself. “I’m not doing that again,” she said. “It’s worth the money to get a travel agent.” I’m under the impression she spent a lot of time on this do-it-yourself endeavor. Last I knew, she doesn’t have a computer at home. I assume she’s used the computers at the library since that’s where I saw her. Then we talked about how if you have a travel agent, you also have a person who can work on your behalf if you have a problem. Possibly, a travel agent might even find a cheaper deal.

Years ago I had a travel agent arrange a trip for me going from Albuquerque to Taiwan for a week, then to Japan for another week, then Honolulu for two weeks, then to Los Angeles for a layover of a couple of days before heading back to Albuquerque. The two tickets, one for me, and one for my traveling companion whose itinerary was different than mine, were screaming deals. Since I had given her the names of companies that were offering cheap fares from ads I saw in the Los Angeles Times, she told me I could book what she found myself. I let her do the booking and paid her fee. That seemed fair since she did most of the work. Obviously, I had one of those travel agents who was competent and dedicated.

We’ve also had a wonderful travel agent in Singapore who got us what we wanted, and we used one in Sri Lanka to find us the deals we were after. I say the more specific you are in your desire, the better your luck. Wondering about this, I checked over at Travel Troubleshooter columnist, Christopher Elliot’s blog to see what his take is on travel agents. Sure enough, a few days ago, he took on the question “Are travel agents worth the extra money.” He generally thinks so for the reasons I think. There some comments from people who differ. Maybe it’s a toss-up. Still, I’d tell my retired friend next time, find an agent with a good reputation so all she has to worry about is what to pack.