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America's online travel agencies turn to Europe |
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For America's online travel agencies, the grass looks much greener on the other side of the ocean: U.S. Internet travel companies have become the dominant players in Europe over the past several years, by either buying competitors or increasing the share of their own businesses. |
As bookings in the United States have stalled for most online travel agencies, companies like Expedia, Travelocity, Priceline and others have found that their investments in foreign markets are paying off - especially in Europe, where their bookings jumped about 30 percent last year. Although doing business in foreign markets can be complicated, executives and analysts said these efforts can also be lucrative.
"International has become a huge part of the story for this group as a whole," said Jake Fuller, an analyst with Thomas Weisel Partners, an investment firm. "Bookings are growing faster, and they're a significant piece of the pie now."
Fuller forecast that overall bookings at Expedia, Travelocity and Priceline would rise by just 7 percent this year, to $33 billion, as airlines, hotels and car-rental companies work to attract consumers directly to their own Web sites. The U.S. e-commerce market has also reached a point where sales in certain categories are beginning to level off.
About 30 percent of U.S. travel is booked online, with room to grow possibly as high as 50 percent, Fuller said. But in Europe, online travel represents only about 20 percent of sales, and in Asia only about 12 percent. Because significant infrastructure hurdles still exist in markets like China, where credit card adoption lags that of Western markets, Europe is paying better dividends.
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Source - Herald Tribune
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