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Disparate figures fog e-travel's future
Wednesday, June 05 2002
by Matthew Clark

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There is a vast disparity between researchers' forecasts for the e-travel industry in Europe, but one thing remains certain: the market is set to grow.

Recent research from the Centre for Regional Tourism Research in Denmark claims that by 2006, total sales for e-travel in Western Europe will hit EUR14 billion. And if this sounds like a big figure, it is less than half what Forrester predicted in October, when it predicted a market worth EUR38 billion. Meanwhile Jupiter MMXI said that the industry would amass EUR20.7 million in sales in 2006.

Nonetheless, few analysts deny that the industry is set for rapid growth, with its present value estimated at over EUR6 billion, but the disparity in forecasts may lead some e-travel companies to believe that the industry has far more potential than what is realistic. Currently e-travel sales in Europe account for around 3 percent of total travel sales.

"I would tend to lean toward the EUR14 billion figure were I to make a forecast," claimed Paul Richer, senior researcher at UK-based travel technology consultancy Genesys. "I think what the US firms (such as Jupiter and Forrester) have done is extrapolate from the US experience. But travel in Europe is a different kind of market."

Richer pointed out that credit card penetration is much lower in Europe, a fact that will slow e-travel sales. Additionally, Richer claims that Europeans buy their holidays in different ways than Americans.

"Lots of leisure travel in Europe is more complex package holidays, which are being purchased by families. I am not convinced that these people will be willing to make such big purchases over the Internet," Richer said. "Americans simply don't make as many package holiday purchases."

But the Genesys analyst does claim that many Europeans do research on which holiday to choose over the Net, "But they make the purchase over the phone or in person." Additionally, he said that the rollout of iDTV (interactive digital television), which ostensibly will increase Internet penetration in Europe, would boost e-travel.

Another interesting statistic about the e-travel industry from the Centre for Regional Tourism Research's report is that the e-travel market will account for only 5.6 percent of the EUR251 billion travel market. Additionally sales will grow only 15 percent from 2005 to 2006, following a steady decline in growth from 18 percent in 2005, 23 percent in 2004, 30 percent in 2003 and 46 percent in 2002.

Conversely, the US e-travel market is expected to be worth 10 percent of the overall travel market in 2002.

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