Top ten Online Travel Agencies

The top ten online travel agencies

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Can smaller online travel agencies in Europe live?

A number of celebrity shoppers have been helping Expedia and Priceline consolidate their position as the world's biggest online travel agencies (OTAs) as opportunities for others diminish. In February this year, Expedia made the news with the takeover of its competitor Orbitz Worldwide, after taking over Travelocity just a single new year. And, following the Kayak blockbusters takeover in 2012, Priceline, along with Ninjas and Buteeq OpenTable, further strengthened its B2B hospitality offering in 2014.

As the world's biggest players strengthen their position through acquisition and further dynamic expansion, the fight for OTA domination in some countries is looking more and more like a two-horse-drive. Is it worthwhile for smaller agents in particular who concentrate on the EU or is it better simply to grab and look for opportunities elsewhere?

On the European continent, early adopters in the OTA region have established themselves, so that the fragmented markets remain highly fragmented. From 2013, Europe's five major trading partners - Priceline, Expedia, eDreams Odigeo, Orbitzand Unister - together accounted for almost 70% of all OTAs.

However, since more than three out of ten entries to be booked by small actors, either regionally or locally, are still being processed, small and medium-sized companies still actively participate. Start-ups or smaller companies that want to make a name for themselves in Europe - or at least remain in the running - must offer the consumer something they do not already get from the incumbent operators.

It is good to know that the OTA region in Europe still offers a lot of room for expansion. On-line travel booking in Europe continues to outpace off-line travel deals as customers - especially in less developed online stores such as Spain and Italy - make increasing use of the web to schedule and make travel reservations.

While year-on-year growth in the number of entries to books from private individuals will fall below the double-digit level, the European retail trade will remain quite sound and will exceed 51 billion euros by 2016. However, for those who want to gain a greater stake in this vibrant travel industry, the chances and challanges differ widely from travel sector to travel sector.

As an example, the fragmented accommodation sector makes this sector clearly ready for placement; in 2013 almost a fourth of Europe's hotels were booked through the OTA, by far the most OTA-dependent one. New entrants should start at their own risks, however; Priceline's Hotel-Only Booking.com is already dominating in many Europeans, with further rapid expansion predicted for the coming years.

On the other side, in the railway and low-cost carriers (LCC) segment, only 4-5% of all reservations are recorded by the OTA. As most of the railway market in Europe has only one or two providers, there is relatively little need for brokers. However, the capability of some of OTA' s to provide packaged hotels along with train fares could put a foothold in their doors.

Even LCC' s in Europe, such as Ryanair and EasyJet, which are very successfully sold through their online instant messaging systems, are now active in attracting corporate travellers and other demographers who tend to make bookings through brokers. And, of course, there are often huge variations between countries where online penetrations, fragmented economies, and other drivers can affect the scale to which they can be adopted.

Whilst the overall OTAs in Europe look good, it is anything but a one-size-fits-all and profit in one markets or segments is by no means a powerful indicator of any other. On-line travel agencies need to do their work, understanding the unique possibilities and issues and have the courage (and resources) to keep the course.

More information on the European online travel industry and in-depth country-specific analyses of major sales and marketing drivers can be found in Phocuswright's European Online Travel Overview Tenth Edition.

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