Online corporate travel set to grow in Europe

July 27, 2006 |

The online corporate travel market in Europe will represent 22% of the total corporate spend travel spend by 2008, US analysts PhocusWright predicts, describing the market as a "sleeping giant."

The online corporate travel market in Europe will represent 22% of the total corporate spend travel spend by 2008, US analysts PhocusWright predicts. Consultants Susan Steinbrink and Lorraine Sileo describe the online market as a “sleeping giant.”

The authors say that while the global online travel market will be worth $200bn by the end of 2006, online corporate travel was still small, “representing less than 5% of the total corporate market” in both Europe and the Asia Pacific regions.

Ms Steinbrink and Ms Sileo, writing in PhocusWright’s Corproate Travel Distribution: Key Markets paper, say that globalisation will be a key force is driving online corporate travel.
They say that travel management companies (TMCs) have responded to this need by the re-alignments and centralisations seen this year which have left four main players: American Express, Carlson Wagonlit Travel, BCD Travel and HRG.

This, say the authors, makes them better positioned to compete with online agencies like Expedia, Travelocity Business and Orbitz for Business/Travelport.

Suppliers, like airlines, hotels and train companies were also responding to corporate needs to cut costs with more online offerings.

The authors say there are four main “market dynamics” that will stimulate the globalisation of online corporate travel.

- US online corporate booking tool providers like GetThere, CWT and Concur were now using their success in America to convince their US-based clients in Europe. “US and multinational corporations (rather than local/regional) present the ripest opportunity for online booking adoption today,” said the writers.

- Online booking and web-based tools will help offset the high fragmentation of content in the European market.

- The no frills carriers which already sell 95% of their tickets direct or online and dominate the short haul routes.

- The “sheer cost effectiveness of the online advertising model will drive corporations to shift spend away from print and other traditional advertising channels,” said the authors. This is already happening in the UK.