European Online Travel to Pass $1 Billion

The travel industry will be one of the fastest growing sectors for online sales in Europe over the next few years, according to research by Datamonitor.

By 2002, Datamonitor predicts the sale of online travel products in Europe will be worth $1.7 billion. In 1997, online travel sales were worth just $7.7 million.

According to Datamonitor, online travel will be fueled by increasingly sophisticated Web sites providing links to several interconnected resources, for example, virtual tours, photo galleries, and tourist offices. In addition, the research found that online flight reservations and purchases for business travelers, who may travel regularly and at short notice, will be a key driver of growth.

Datamonitor also expects interactive TV to play a major role in the European online travel market. Datamonitor expects interactive TV to surpass PC-based Internet penetration after the year 2003.

The research also found that the transactional costs of bookings made online can be up to 10 times lower than those made through call centers. A basic, transactional Web site can be set up for as little as $20,000, according to Datamonitor, and a reservation made through a call center can cost up to 10£ while an equivalent online reservation can cost just over 1£.

Datamonitor’s research also found that premium travel products, such as package vacations, are more often highly information intensive and are therefore difficult to conduct through the Internet. Thus, commodity products such as flights, are currently the most successful online category.