UK online bookings to grow this year

by Tom Johansmeyer on

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.

Online travel agencies still making money in today’s travel market

by Tom Johansmeyer on

There’s still money in the travel business; you just have to look in the right places. In the United States, the online leisure and unmanaged business travel sector is where you’ll find the cash — this sector is outperforming every other travel sales channel, according to a recent study by research firm PhoCusWright. In a report that the company will release soon, U.S. Online Travel Overview Ninth Edition, PhoCusWright will reveal the details behind the online leisure/unmanaged business travel’s 7% decline relative to a nationwide general fall of 16%.

“For the first time since PhoCusWright began tracking the remarkable trajectory of the internet in travel distribution, online travel will decline in 2009,” says Doublas Quinby, senior director, research at PhoCusWright. “But,” he continues, “the 7% drop in online travel vs. far steeper double-digit declines for the total travel market and offline channels indicates that travelers are increasingly turning to the Web to shop and purchase travel amid the recession.”

The contraction of the travel market in 2009 has brought the travel industry back to pre-2005 levels. The effects haven’t been as brutal in the online space, though, which has outperformed all the other channel’s this year. When the year is over, PhoCusWright expects online travel agencies to own 39% of the total travel market in the Untied States, up from 35% last year.

[Photo by borman818 via Flickr]

“By honing in squarely on consumer concerns in 2009, heavily promoting deals and last-minute special offers and eliminating many booking and customer service fees, online travel agencies have deftly outflanked recessionary pressures and are outperforming every other distribution channel,” Quinby reports. He adds, “OTAs are taking back some share from travel supplier Web sites this year.”

Europeans still booking travel online

by Tom Johansmeyer on

This year, the online travel business in Europe is expected to creep higher this year. Travel research firm PhoCusWright forecasts that online bookings will edge up to 0.6 percent this year in its latest report. Yet, this outperforms the hell out of the broader European travel market, which is expected to be down 10 percent in 2009.

Carol Rheem, director, research at PhoCusWright, says, “As Europeans seek to make the most of their treasured time off this year, they are increasingly using online options to plan the best holiday for their budget.” She continues, “Online travel agencies are weathering this economic storm better than any other booking channel.”

Though there’s still room for some sort of surprise by the end of the year (not likely), the European online travel space is expected to see gross bookings of €23 billion when we close the book on 2009, with supplier websites lagging online travel agencies.

“Even in the bleak travel backdrop of 2009, some travel companies are thriving — and not all of them are OTAs [online travel agencies]. Countercyclical trends bolster these companies while exacerbating decline for others. Those dependent on business travelers are among the hardest hit,” Rheem observes. Business travel is expected to be off 17 percent for the year.