Industry Update
Opinion Article 7 April 2014

Online travel trends in Europe

By Pamela Whitby, Editor, EyeforTravel Ltd

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Across the board, it's been a tough few years for the online travel industry in Europe but things could be looking up. In fact, Europe's online travel market is forecast to grow faster than the total travel market, averaging 8% annual growth through 2015. 

Across the board, it's been a tough few years for the online travel industry in Europe but

things could be looking up. Late last year PhocusWright released figures that suggest European gross travel bookings are projected to hit record levels of over €250 billion in 2013. In fact, Europe's online travel market is forecast to grow faster than the total travel market, averaging 8% annual growth through 2015.

Ahead of the Travel Distribution Summit, Europe, we take a broader sweep of issues that may give brands the edge in Europe.

1. Rate parity: the wall is falling with the rise of meta
Hoteliers in Europe, where chains are less dominant, are more sensitive to rate parity issues than US counterparts - and they are starting to push back. For Conor O'Connor, co-founder and chief executive of Hot Hotels, parity is a throwback to the industry of old, and some hotel activity goes against what the EU would consider to be fair practices. "The days of free price competition is what gives customers the best deal and also fills the rooms of the best hotels," he says."It still amazes me that price-fixing and separate or different rates for the same markets can and do exist," he says.

But things are changing, if slowly, in Europe and Carl Michel, executive chairman, of Generator Hostels, believes that the rise of meta-search, which is "good news for hotels", is helping to level the playing field.

2. Help the traveller bag a bargain and build love
According to O'Connor, in Europe, the ability to grasp the subtle and not so subtle differences - and, in particular, the ability to deliver a good deal is important! Hot Hotels believes it has the edge over its main competitor - HotelTonight - in Europe because it understands this market better.

"Selling a $500 hotel in Chicago for $350 might work well in the States but it doesn't translate here," he says. "In Europe, consumers are looking for a €100 hotel for €50. The market here is lower end and it's much more fragmented."

HotelTonight's recent move to include more budget offerings such as hostels, packages and holiday rentals, indicates that it has now understood this trend.

3. Build love on both sides: don't make price your only point for differentiation
Bob Rogers, co-founder of DealAngel, a firm recently acquired by the Russian online travel agent (OTA) OneTwoTrip, has a contrary view. "Yes, price is important in Europe, but if you only differentiate on price then that is not sustainable," he says. "I'm a firm believer in building love in the services you provide and giving value on both sides."

In a world where OTAs are often making demands on hotels for parity and so on, Rogers says, for example, that they have developed a free rate-shopping tool. This allows hotels to see and understand their ranking on an OTA's website, a service many already pay for.

Mobile-only players - which help hotels sell distressed inventory, while helping consumers bag bargain - have also understood the importance of a two-way relationship. "Mobile is an opaque channel and we are not here to cannibalise the sales of our hotel partners," says O'Connor.

4. Be prepared for growth for mobile and the last minute
Of course, specific mobile trends can't be ignored as mobile bookings are growing explosively and by 2015, a fifth of all online travel bookings are expected to take place via smartphone or tablet. If you need more proof, generated more than $8 billion in mobile bookings in 2013, up from $3 billion in 2012 and $1 billion in 2011 - and it has invested heavily in making the user experience a seamless one. As O'Connor points out, around a quarter of of all hotel bookings are now made on the same day and 60-80% of those same day bookings are made on a mobile device. "We aim to be right at the apex of those trends," he says.

5. The rise of the repeat booker: find the right niche and you may just drive loyalty customers
"I've been in online travel for almost a decade and I've never seen repeat customer percentages [over 50% of Hot's customers are repeat visitors] like this," says O'Connor, who believes that not only is the European customer really looking for a deal, they want to complete it in record time so it's more important than ever to deliver a great, frictionless user experience. "If you go to an OTA website, search the list, enter contact details and so on, it's a three to four minute process. On our app it takes 10 seconds or less," he says.

That's got to be a good thing.

6. Geo-location, personalisation and packaging better
At no other point in history have people carried a computer in their pocket. From checking status updates to making phone calls or booking a hotel room, there is a lot of inherent geographic and geo-location technology built into a mobile device which allows customers to behave in a much more on demand way.

With the fall of roaming charges in Europe, coupled with access to a huge amount of data, there are real opportunities. Selling tours and activities during the trip is just one example. "Most time people are not in the frame of mind to book an activity, which can be weather dependent, before they leave home," says Rogers, who can't stress enough the importance of thinking creatively. For example, if the traveller is staying in a hotel near a popular museum, why not entice them in for breakfast with a discount, before the tour groups descend. The consumer benefits from a discounted ticket or meal, and the destination/venue sees customers at what is usually a quiet time.

7. The consumerisation of business travel
Speaking of that computer in a pocket, Nick Vournakis, Carlson Wagonlit Travel's (CWT) senior vice president, global marketing says the consumerisation of business travel and the power of travellers looking for an experience on par with what they would expect when booking leisure travel is a rising trend. "I expect that door-to-door booking capabilities, fully enabled on mobile devices,where a traveller can book a trip in a few simple clicks, will continue to rise in popularity," he says.

Related Event

EyeforTravel's European Summit (TDS Europe) 2017

ETC. Venues — London, United Kingdom
event information

Pamela Whitby

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