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European Travel Market Slows, OTAs continue growth path

Posted Date:  November 28, 2012

The European online travel market will sustain double-digit gains in 2012, despite anemic growth for the region's travel industry, according to the new report “PhoCusWright's European Online Travel Overview Eighth Edition”. Amid ongoing economic turmoil, the European travel market will grow just 2.5% – half as fast as the previous year – to reach €242 billion.

The European online leisure/unmanaged business travel market will grow 10% in 2012, down from 17% the previous year.

The rise in online sales has largely been driven by online travel agencies (OTAs), which present an appealing option for budget-minded consumers venturing online in search of deals. OTAs will grow 13% in 2012, with supplier websites gaining just 8%.

"Europe's online travel market continues to outpace the overall market, but growth will decelerate across all channels over the next two years,"said Carroll Rheem, Senior Director, Research.

"This is partly due to general economic challenges, but also the graduation of some markets to a mature online state. As economies of scale and network effects are meaningful in travel, the region's dominant players are better positioned than their smaller counterparts. The environment is ripe for consolidation among both suppliers and intermediaries."

Growth prospects vary for each regional market and industry segment.

Author: Alex Augustine

Managing Director,Teknokraaft

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