Edition: International | Greek
MENU

Home » Business

Online travel agencies look abroad for growth

By: EBR - Posted: Monday, November 7, 2005

Online travel agencies look abroad for growth
Online travel agencies look abroad for growth

U.S. online travel agencies like Expedia and Orbitz are increasingly setting their sights overseas, especially in Europe where vacations are longer, as U.S. demand rises more slowly.
Foreign markets, where low-cost airlines are adding more routes, are ripe for one-stop online shops where users can book flights, hotels and rental cars all at once, experts say.
"Definitely the growth has slowed in the U.S.," even though it is far from saturated, said Lorraine Sileo of PhoCusWright, a travel research company. "The growth overseas is particularly in Europe, the UK, Germany, France."
International growth far outpaces that in the United States, where online travel agencies have a huge footprint.
PhoCusWright data show that gross U.S. bookings for U.S. online travel agencies grew 19 percent in 2005, down from 21 percent a year earlier and 33 percent in 2003.
By contrast, international gross bookings increased by 115 percent so far this year, up from 97 percent in full-year 2004 and 109 percent in 2003, PhoCusWright said.
European vacation habits are key to expanding regional online travel, said Ronen Stauber, chief executive of Consumer Travel International Markets at Cendant Corp., which owns Orbitz, the No. 3 U.S.-based online travel agency.
"Europeans, unlike Americans, actually take vacations," he said. "When you do that across more people with more vacation days, it just opens up more opportunities."
Orbitz, together with market leaders Expedia, the lead brand of Expedia Inc., and Travelocity, a unit of Sabre Holdings Corp., control about 77 percent of online travel bookings.
"We clearly do believe that we'll continue to see growth in Europe on par with the States," Stauber said.
Europe lags the United States in the adoption of Internet commerce, with online travel booking trends mirroring American ones a few years ago.
Asian countries, with large populations, also are a solid growth area for online travel companies, but Internet penetration lags Europe by a few years, PhoCusWright said.
Cendant, which purchased Orbitz in 2004, has been expanding its online travel business in Europe, most notably with the acquisitions of Britain's Ebookers Plc, owner of Europe's No. 2 travel site, and British distributor Gullivers Travel Associates.
Expedia's former parent, IAC/InteractiveCorp., last year bought a 52 percent stake in eLong Inc., the second largest online travel agency in China.
But Expedia generally prefers creating new operations abroad rather than acquiring existing businesses, Dennis said. Last year, Expedia launched branded sites in Italy and France.
"We started investing overseas quite a while ago -- for at least the last five or six years," said David Dennis, Expedia spokesman. "We continue to branch that out."

READ ALSO

EU Actually

PM Francois Bayrou’s ‘moment de verite’

N. Peter KramerBy: N. Peter Kramer

France’s Prime Minister François Bayrou has proposed cutting two public holidays as part of a 2026 budget proposal to slash overall spending

Europe

Europe’s 2040 climate target isn’t just for environmentalists

Europe’s 2040 climate target isn’t just for environmentalists

Europe can’t decarbonise the world on its own. But it must develop policies that work so that other nations can copy and adapt them

Business

To save the Single Market, bring back Delors’ 1992 playbook

To save the Single Market, bring back Delors’ 1992 playbook

Most people familiar with EU affairs know the single market is a myth. Hailed as the bedrock of the European Union, it was never completed and is now crumbling.

MARKET INDICES

Powered by Investing.com
All contents © Copyright EMG Strategic Consulting Ltd. 1997-2025. All Rights Reserved   |   Home Page  |   Disclaimer  |   Website by Theratron