A new European and Global Edition study published by Phocuswright finds that European online travel gross bookings will march forward at a brisk pace in 2015, despite continued economic sluggishness and geopolitical turbulence.
Optimism over Europe's recovery experienced in the first half of 2014 proved short-lived, as the French economy continued its slowdown into 2015 and Greece's fiscal woes continued to weigh heavily on Euro Zone stability.
Despite these challenges, online bookings expanded by 8% in 2013 and will continue to climb at a similar pace through 2016, according to Phocuswright's European Online Travel Overview Tenth Edition. "While growth in the total travel market has slowed, there is still ample opportunity to shift market share between Europe's many travel intermediaries and suppliers," states Luke Bujarski, director, research at Phocuswright.
Intense competition driven by disruptive innovation across all the major travel segments including air and accommodations finally pushed Europe's online market gross bookings past the €100 billion mark in 2013. "How Europe's leisure and business travelers choose to shop and book their travel will continue to evolve toward digital channels, despite the nagging political and economic turmoil impacting the region," says Bujarski.
"Tension between the EU and Russia over territories in the Ukraine and the subsequent collapse of the Russian ruble stunted travel from Russia to Western Europe," states Bujarski. "Meanwhile, political strife in Northern Africa and the Ebola epidemic in West Africa prompted many would-be visitors to the continent, particularly German and French travelers, to vacation within Europe instead."
At the same time, acceleration in the U.S. economy will likely increase trade between Europe and the U.S., driving demand for business travel to and from Europe. Falling oil prices and a weak euro relative to other global currencies could also reinvigorate the broader economy and travel demand as a whole.
While these and other factors shape where and how often Europeans travel, innovation and disruption in online channels will ultimately determine where and how Europe's lucrative traveler arranges travel. As of 2014, supplier web channels controlled 60% of the total online market. Online travel agencies on the other hand are pulling business away from traditional offline channels at a faster rate compared to supplier websites and apps.