The individual markets of Europe, in particular the top five (U.K., Italy, France, Germany and Spain) demonstrate the variety of paths that developing e-commerce economies can take. Hence, PhoCusWright has undertaken a country-by-country research effort covering these five markets and the European market as a whole, resulting in six new reports.

Italian Online Travel Market Projected to Near 3.4 Billion EUR in 2008

While the travel market of Europe as a whole is marching relentlessly online in the footsteps of the U.S. travel market, the Italian online travel channel continues to trail its peer markets. The report, PhoCusWright's Italian Online Travel Overview, provides an in-depth look of the Italian travel market, including market size, forecasts and analysis, as well as the overall European market, for 2004-2006 and projects trends through 2008.

According to the report, online penetration in Italy was just 8% in 2006, trailing the European average (19% in 2006, expected to reach 28% by 2008). By 2008, Italian online travel gross bookings will still comprise just 12% of all Italian travel bookings. Yet the Italian travel market has seen explosive growth in the online channel over the past three years and remains red hot. The online travel market will continue its strong growth, led by online travel agencies and low-cost carriers (LCCs), and online travel revenues will show a fivefold increase between 2004 and 2008.

Additional highlights of the Italian online travel market include:

- Growth in the Italian market has been led by online travel agencies and LCCs.

- A highly fragmented hospitality industry, a traditional travel agency network that handles a large percentage of unmanaged business travel, and tour operators skeptical about their chances of maintaining share if they move business online are among the reasons Italy is still far from reaching the online performances of other major European countries.

- Italian online travel agencies (along with airlines) remain the primary drivers of the online travel market.

- Almost all air carriers are offering hotel reservations and other services.

U.K. Online Travel Market Projected to Near 20.1 Billion EUR in 2008

The U.K. online travel market, like that of Europe as a whole, is marching relentlessly in the footsteps of the U.S. online travel market. The report, PhoCusWright's United Kingdom Online Travel Overview Second Edition, provides an in-depth look of the U.K. travel market, including market size, forecasts and analysis, as well as the overall European market, for 2004-2006 and projects trends through 2008.

According to the report, the U.K. online travel market surpassed 13.6 billion EUR in 2006. By 2008, the online channel is expected to comprise 48% of the overall market, but growth rates are projected to settle into the 20% range. Overall, the U.K. online travel market has been strengthened by market developments on the supply side, which are fueling an ongoing demand-side boom for travel products and services that will continue into the long term.

Additional highlights of the U.K. online travel market include:

- Fueled by demand for experience-based shopping and research, the Long Tail is also manifesting itself in travel niche sites that, taken as a whole, rival or surpass the influence of the traditional giants.

- Specialist travel companies and tour operators are offering differentiated travel experiences and pursuing an Internet presence, and, as the U.K. travel shopper evolves, even the mass market travel tour operators are investing in experienced-based travel brands.

- After a decade of leading the migration of the European traveler to online purchase channels, the U.K. traveler is ready to go beyond price and the simple air/car/hotel purchase and enter the realm of shopping for experiences.

- Internet travel shopping adoption remains low, although online bookings growth is strong.

Spanish Online Travel Market Projected to Near 5.8 Billion EUR in 2008

The Spanish online travel market is a growth driver for Europe as a whole, though it is increasing off of a relatively small base. The report, PhoCusWright's Spanish Online Travel Overview, provides an in-depth look of the Spanish travel market, including market size, forecasts and analysis, as well as the overall European market, for 2004-2006 and projects trends through 2008.

According to the report, the Spanish online travel market is evolving rapidly, approaching 3 billion EUR in 2006 and projected to reach 5.8 billion EUR by 2008. In 2006, Spain had the highest online travel growth rate, 62%, among the top five travel markets in Europe, and the online channel will continue its powerful growth through 2008.

Additional highlights of the Spanish online travel market include:

- Spain's strong online travel market growth is partially due to the shrinking gap between Internet users and buyers, and the online space will continue to be dominated by the online travel agencies.

- Spain is the number two world international destination in terms of both arrivals and revenues.

- Local suppliers, particularly hotels, are fragmented and lag in online share.

- Internet travel shopping adoption remains low, although online bookings growth is strong.

German Online Travel Market Projected to Near 12 Billion EUR in 2008

The German travel market, with important local variations, is marching relentlessly online in the footsteps of the U.S. travel market. The report, PhoCusWright's German Online Travel Overview, provides an in-depth look of the German travel market, including market size, forecasts and analysis, as well as the overall European market, for 2004-2006 and projects trends through 2008.

According to the report, online revenues as a percentage of the total German travel market reached 20% in 2006. By 2008, nearly one out of every four euros spent on travel in Germany will be for online leisure/unmanaged business travel and the growth rate in this relatively mature online market will be a solid 23%.

Additional highlights of the German online travel market include:

- Three major tour operators dominate the market, and their traditional business model is undergoing a major transformation.

- The low-cost carrier business in Germany continues its profound growth, lifting the online channel and changing leisure and travel habits.

- Branded hotels account for less than 50% of the total hotel market.

- Local online agency brands are holding their own against international players.

- Independent travel habits are beginning to supplant the tradition of packaged holidays. Online booking and transaction success breeds trust in the Internet and overcomes discomfort with credit cards and online payment.

French Online Travel Market Projected to Near 10 Billion EUR in 2008

The French online travel market, though it trails that of Europe as a whole, is marching relentlessly in the footsteps of the online U.S. travel market. The report, PhoCusWright's French Online Travel Overview Second Edition, provides an in-depth look of the French travel market, including market size, forecasts and analysis, as well as the overall European market, for 2004-2006 and projects trends through 2008.

According to the report, online revenues as a percentage of the total French travel market reached 16% in 2006. By 2007, one out of every five euros spent on travel in France will be for online leisure/unmanaged business travel. Yet an online travel market projected to be nearly 10 billion EUR in 2008 still represents tens of billions of euros awaiting online conversion.

Additional highlights of the French online travel market include:

- The French online travel market experienced a rapid adoption curve, and despite the relatively low level of Internet penetration, exhibits the hallmarks of a very mature online travel market.

- Online penetration of the travel market has been a steadily evolving process, not an explosive burst, thanks in part to a unique element of the French travel market: the absence of homegrown low-cost carriers.

- The relative inertia of offline intermediaries allowed the entrance of new online players.

- Monolithic suppliers, a lack of locally-based low-cost carriers, and relatively small outbound market have tempered the growth of the online segment.

- The battlefield previously populated with online travel agencies is now mainly occupied by suppliers.

Related Link: PhoCusWright