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.

Expedia drops telephone booking fees

There is a bit of a war going on between the various large online travel sites. They are battling each other to see who can provide the best service, with the lowest fees. Of course, this war really only has one winner – consumers.

This morning, Expedia announced the removal of all telephone booking fees for trips booked through their service. This may not sound like a very important change, but when you consider that the airlines charge as much as $25 per person, per telephone booking, you’ll quickly realize that being able to book that same ticket through Expedia without any fees could come in quite handy.

The company eliminated online air booking fees and change fees and cancel fees on all hotel and car rental reservations in May 2009. Cruise change and cancel fees were also eliminated in May 2009 and cruise booking fees were eliminated in October 2009.

It is an odd world when big travel firms like Expedia are able to provide a better service than the airlines themselves, but as I said – we consumers are the real winners here.

Being able to book a flight over the phone is perfect for people who hate making online reservations, or if you need an last minute flight reservation and don’t want to deal with the hassle of finding a computer with Internet access.

PhoCusWright releases moronic report

Travel research firm PhoCusWright is trying to get people to buy its latest report by making some (supposedly) bold predictions about travel industry technology trends. Realistically, most of this stuff falls into the “No Shit” category, but alas, Gadling will not make that one of the official labels from which I can choose.

These are some real gems. In fact, I’d be willing to bet my MBA that a backpacker with three joints and a smile could have come up with most of this.

After the jump, you’ll find 10 pearls of wisdom from this research firm. Please, click the link to continue reading. I dare you. You’ll get in a few hundred words what cost me more than 40 grand. The italicized content is from PhoCusWright. The rest is from me.1. Despite Market Woes, Pockets of Investment Still Exist
Okay, Sami Mahroum, Research Director of Britain’s National Endowment for Science, Technology & the Arts (and believe it or not, I’ve shortened his title) says what I’ve been telling people at De La Concha for months: “During economic downturns, innovation is the single most important condition for transforming the crisis into an opportunity.”

In financial parlance, this is just saying that contracyclical investing occurs all the time. If you put your money into what sucks today but which may not suck tomorrow, you have a shot at some big gains. Investing in the flavor of the month doesn’t afford the same opportunities.

2. The Entire Trip Experience Will be “Informationalized”
I lived through the “dotcom” era (with a CMGi company, even … remember them?), and I heard – and said – some pretty moronic buzzwords. But, how can you use stupid catch-phrases in this sort of economy? All that’s missing is a sock puppet!

What PhoCusWright is trying to say is that online companies that provide booking capabilities are going to need to supply information past the financial transaction. Duh. Have you left a review on Hotwire or TripAdvisor lately? This is what the report is talking about.

3. Software as a Service (SaaS), Cloud Computing and Open Source Spawn a New Flock of Innovators
Ummmm, how? I’m sure open source could make me less bald if I don’t have to prove it.

4. Suppliers (Finally!) Provide Personalized Shopping/Booking Tools
The example provided by PhoCusWright is basically what people called the “My Yahoo! phenomenon long before I entered my thirties.

5. Technologies Will Continue to Converge
Yes, and my refrigerator will continue to keep stuff cold. This is natural trajectory. C’mon, PhoCusWright. All the cool research and consulting firms are tired of talking about convergence. Back when I was in the consulting world (left in 2007), we were disgusted with the word.

6. A Flood of New Mobile Travel and Location-Based Applications Come to Market
I’ve been hearing about this since mobile internet company NetMorf (RIP) tried to convince me it mattered. Mobile has come a long way since 2001, but this is more stuff that just makes sense today. Why would you pay for this?

7. Advertising Technology Transforms Travel Distribution
This one’s just stupid, so I give you travel advertising technology in action.

8. Still Searching … for Better Search
Oh, come on …not this typical gripe again. At the end of the day, it’s the searcher, not the search tool. Unless you commit some reasonable time to searching for what you want, you won’t get it.

9. Democratization of Supply Levels the Playing Field
All I can say is that “democratization” is explained by “oligopoly,” “mashups,” “SaaS,” and “the transparency of the internet.” I call it all … bullshit.

10. Business Intelligence and Analytics Move to the Forefront
The moved to the forefront a long time ago. Everyone uses this stuff now. Catch up.

So, here’s the good news. PhoCusWright will let you download “a full and detailed description of the first two trends” free! Wow! They want you to pay for the other eight … to the tune of $350. But, for the price of a mouse-click, you’ve already gotten more.