European countries were hit hard (and many remain under pressure) during the global financial crisis, so how did the online travel sector cope and is it bouncing back?
Research company PhoCusWright has produced a bitesize snapshot of the key markets around Europe, outlining the impact of the GFC and how each country is (or isn't) emerging from it.
France
With 74 million visitors, international travel to France fell in 2009 as a result of the global economic crisis and the relative strength of the euro. However, the fall in international visitors was offset by growth in domestic tourism.
Despite declining overall sales, the online component of the French travel market grew slightly in 2009. However, growth rates were not even across all sectors, as airline, rail, and car hire online sales dropped in line with revenue reductions in their respective sectors.
Germany
Facing the aftermath of the financial crisis – which severely affected nearly all European economies – Germany was able to avoid high unemployment rates and maintain relative economic stability throughout 2009.
Nevertheless, growth in all sectors of the travel industry slowed, dragging total gross bookings for the German travel market down.
Italy
Italy’s travel market is recovering from its 2009 low. However, this recovery is not like previous rebounds and will be characterized by particularly sluggish growth in the months to come. Even though total market revenues diminished in 2009, online direct bookings grew.
Online travel agencies (OTAs) increased their market share, as their lower distribution costs provided better deals to consumers in search of a bargain.
Scandinavia
The Scandinavian travel market’s (encompassing Denmark, Norway and Sweden) total gross bookings declined in 2009. The downturn in bookings, however, is modest in comparison to the rest of Europe.
In terms of online bookings, Scandinavian sales were flat for the first time. Nevertheless, online penetration jumped over four percentage points from 2008. This is the second highest online penetration in Europe after the UK.
Spain
The economic and financial crises have deeply affected the Spanish travel industry. Demand has dropped, especially from international visitors, and credit to travel companies has become scarcer.
The financial crisis affected some travel segments more than others. Despite the economic challenges, rail grew in 2009 and OTAs remained relatively stable. On the other hand, traditional airlines, low-cost carriers, car rental companies, tour operators and hotels all suffered strong declines.
UK
In 2009, the UK was still reeling from the global financial crisis. Due to budget constraints,travelers took fewer trips, knocking outbound holidays and trips to visit friends and relatives down.
All in all, however, the UK travel market is seeing light at the end of the tunnel. GDP is projected to grow in 2010 officially signaling the end of the recession, and travel will pick up again.
NB: More information and full reports available from the PhoCusWright research library.