Yes, you read that correctly – online bookings are expected to finish higher in the United Kingdom this year! Even in this dismal economy – which has been particularly brutal for the travel industry – the web guys have something to celebrate. Sure, the forecast is only for 3 percent, but that beats the losses being posted elsewhere.
Travel industry research firm PhoCusWright’s new study puts the amount spent on leisure and unmanaged business travel (i.e., employee picks for himself) at £17.1 billion for 2009, comprising 45 percent of all bookings for the year in the UK. So, a hefty portion of the industry over there is seeing some growth.
Meanwhile, the overall UK travel business is expected to shrink by 8.9 percent this year, with gross bookings dropping to around £37.6 billion. So, the online world is holding its own while the rest of the market gets spanked. For the near-term, PhoCusWright says, the “outlook is bleak.” The UK travel business should reach 2007 levels in 2012 (ouch).
“British travelers have had to cope with currency devaluation on top of the recession, and both have driven significant changes in travel patterns,” says Carroll Rheem, director, research at PhoCusWright.
The situation isn’t as bad at home, though. Rheem continues, “The blow to domestic travel has been relatively soft while the fall-off in U.K. visitors to the Mediterranean has been significant.”
Airline websites beat other suppliers in the digital space, the research firm says, picking up more than half of direct online sales in the UK. Hotel company sites are expected to grow with the market, and tour operators are forecast to have the biggest wins (in terms of growth rate) on the web. They’ve invested heavily in marketing to bring customers online, according to Peter O’Connor, PhoCusWright’s market analyst, U.K. and France. “Selling a combination of pre-packaged, dynamically packaged and decoupled travel components, their share of U.K. online direct travel is expected to increase through 2011,” he says. Even with the jump for tour operators, though, online travel agencies are going to lead growth for all online channels in the UK.
It’s not time yet to celebrate an end to the travel recession; that will only come when the bigger recession has been resolved. Nonetheless, it’s great to see some hope in any part of the travel business. It means that people are getting on planes and heading either to old favorites or new experiences. Let’s hope that next year the stats are higher in the UK and everywhere else.