Small & mid-sized European hotels can still increase their online bookings
Small & mid-sized European hotels can still increase their online bookings
Europe is famous for its cluster of small, mid, independent and boutique hotels; every nook and corner is inhabited with different categories of small and midsized hotels recognized for their legacy, specialization and uniqueness. In all these years, these hotels have benefitted from the growth of tourism industry and gradually with time have shifted from traditional channels and created their online presence as well. Europe has always been one of the major tourist destinations in the world and travelers from US, European and Asian countries have always contributed a major share in the inbound travel figures.
2 years ago i.e. 2008
In 2008,PhoCusWright, the travel industry research company predicted bright prospects for online travel bookings in North European countries. As per their Online Travel Overview Fourth Edition, PhoCusWright found that Europe will continue to see double-digit growth in online travel in the next 2-3 years.
Spain would experience the fastest growth in online bookings from 17% in 2007 to 26% in 2010 due to the shifting of rail & hotel segments from traditional channels to the Internet.
Italy would grow by 22% in the same period as nearly half of the country's online leisure/unmanaged business travel sales are generated by low-cost carriers.
France was projected to increase 16% to 7.3 billion in 2008 as online travel agencies (OTAs) were growing at an even faster pace, as both large chains and independent hotels make extensive use of this sales channel
Scandinavia was predicted to "cross the chasm" by 2010, making it the second European market to generate half its bookings online (after the U.K.).
similarly PhoCusWright gave bright prospects for online travel bookings in almost all other European countries. However, in the last 2 years the picture has completely changed
The current scenario in 2010
Everything was on a growth path as predicted by PhoCusWright, until
financial crisis hit the Eurozone. First it was Iceland's ash cloud that brought the entire travel industry to a halt and then suddenly with Greece the worst financial crisis hit the European market and specially North European countries. In the last 15-20 days, stock markets across Europe have crashed, affecting markets across the world. The euro hit a 14-month low against the dollar. Earlier it was companies that were going bankrupt, now countries are turning belly up. Experts believe it is just the tip of the iceberg and some more economies would surrender soon as Eurozone countries have total government debt worth 6 trillion pounds. The EU's debt crisis could spill over into banks in Portugal, Spain, Italy, Ireland and the UK, according to Moody's. Rating agencies have downgraded the debts of Spain and Portugal in addition to that of Greece. Spain's 20% jobless rate is the highest in the developed world. Standard & Poor's lowered Spain's long-term sovereign credit rating to AA' from AA+'. There could be a further downgrade.
Its effect on online travel market and especially for midsized, independent and boutique hotels
These local hotels are severely being hit with not only the financial crisis and already glooming travel industry but also with the increasing presence of global giants especially from the US that are looking for expansion in Europe for sources of growth outside the market they already dominate. Recently, Otus & Co. reported that Four Seasons Hotels Inc., Starwood Hotels & Resorts Worldwide Inc. and Marriott International Inc. are stepping up their expansion efforts in Europe.
These big names with their financial might completely eclipse the presence of local players on internet the one and only medium through which small players reach out to their prospective guests across the world. Whether its search engine positioning or OTA listings or even online advertisements and social media platforms, big hotels aggressively market themselves to become visible to majority of target audience looking for an accommodation in that region. Taking into consideration the way local European giants as well as the global ones that are expanding their reach in this region, it's quite obvious that all leading portals, key words, banners, search results in engines and OTAs etc. will be enveloped and these brands would be all over on the digital space.
Additionally, around the world, international visitation fell an estimated 4.7%. Overnight visits to European destinations declined 6% in 2009, erasing two years of gains, while international travel around the world fell an estimated 4.7% against the headwinds of the global recession. The losses were more severe in Europe which shed approximately 6% in visitor volumes in Q1 2010. This marks a continuing trend of global market share losses for Western Europe, while Emerging Europe continues to gain market share. Similar is the outlook for inbound travelers from the US and other significant contributors from other European countries like Germany, France, UK, Russia etc.
(Source: European Tourism in 2010: Trends & Prospects (Q1/2010), European Travel Commission, April 2010)
Another contributing factor to this dismal performance is that travelers tended toward shorter holidays in both distance and duration. This has resulted in the plunging of room rates.
Small & Mid-Sized Hotels need to expand beyond the top global OTAs
Amidst this scenario, hotel industry across Europe is struggling hard to maintain their existence and fascinating numbers of 2008 by PhoCusWright is nothing but a mirage. In view of all these factors, it's quite evident that all these local and independent players will be experiencing significant decline in their online bookings. Big question is how these small, mid, independent and boutique hotels can survive and maintain their existence in this highly competitive and recessionary environment.
To meet any crisis, the best option is to look for the best practices from the history. There are numerous cases of companies expanding their reach to the emerging economies which the world lobby terms generally as the third world i.e. Asia. Especially from the travel industry perspective, Asia holds a lot of importance and underlying opportunity for European Hospitality Sector.
Source: European Tourism in 2010: Trends & Prospects (Q1/2010), European Travel Commission, April 2010
Every year, majority of outbound travelers from Asian countries like India, China, Korea, Japan, etc. travel to European countries for business and leisure purposes. This region has experienced one of the fastest adoption rates for online travel bookings. Now the question is from where these travelers buy their packages Mainly from their local, national or regional OTAs.
However, contacting a local travel agent is a thing of the past in Asia. These countries have seen a digital revolution in the recent times, not only the internet penetration in Asia has increased but digital arena as a whole such as mobile and social media sites have led to a dramatic increase in online travel bookings across Asia. Today online travel bookings contribute a majority share in the total bookings done from this region.
Small & mid-sized hotels need to move beyond the top global OTAs as well as their regional ones and directly reach out to the top OTAs across Asia and be available & listed on the platform from where maximum tourists book their packages. These local and specialized OTAs in Asian countries have partnership arrangements with their counterparts across Europe to provide travel and lodging packages from their region.
Some of the top regional OTAs that I would recommend small and mid-sized hotels to partner within Asia are: -
India: Makemytrip, Yatra, Travel Guru, Cleartrip.com
China: Chinatravel.com, Topchinatrip.com
Australia: Wotif.com, Qantasholidays.com, Checkin.com, Directflights.com, Flightcentre.com, Roamfree.com
Singapore: Asiatravel.com, Holidaycity.com, Zuji
South East Asia: Agoda.com, Sprice.com. Ratetogo.com, Priceline.com
Hence, the success mantra for small and midsized hotels in Europe to tackle the increasing dominance of global brands and declining online bookings is to expand their reach to Asian countries and partner with the local and specialized OTAs in this region. Tips to Find Sales Jobs Online How to Become Rich - 5 Essentials for Making Money Online Case Study: why OpenStreetMap was chosen for a Romanian Online Project How To Play GTA San Andreas Online For Free Make Your Own Song Online - 3 Simple and Easy Steps! Reduce Your Unsecured Debt - Trade a Lower Credit Score to Reduce Your Unsecured Debt by 60% Watch "Countdown to Zero" Online 2010 Debt Settlement Solutions - Where to Locate the Best Performing Debt Solutions Online How to make quick money online Satellite internet coverage info How to earn money online so that you can make money while you travel Keywords – How to Use the Keys to Make Money Online Stream NBA Watch Celtics Online Live via PC