SPAIN – Europe’s smallest online travel market is finally beginning to play catch-up. New research shows that Spain’s Internet travel market share is growing, in addition to an influx of new online agencies, some of which are successfully promoting online travel in the country.
“Spain has grown tremendously over the last 15 years to catch up to European standards, because the average buying power [in Spain] is not what it is in England,” said Oliver Jager, Consultant for PhoCusWright. “This is really the natural evolution of the economy – it is a very dynamic market that has only started growing.”
Spain’s share of Europe’s online travel market – currently at 3% – is expected to reach 5% by 2005, according to a new report by PhoCusWright.
In 2002, the European online travel marketplace reached 7.6 billion euros, led by England, France and Germany. The report expects gross bookings to more than triple in the next three years, reaching 27.9 billion euros by 2005.
Although Spain is the smallest among the major European markets, with the slowest development of e-commerce, the country’s travel Internet agencies are slowly but surely building an online presence, led by flag carrier, Iberia and hotel giant Sol Melia.
“Spain remains very small, and is a fairly immature market, because it is still highly fragmented – this market still struggles with packages,” said Jager.
Seeing potential for opportunity, online travel agencies like Expedia an Opodo, have both announced plans to enter the market with local offerings. Currently, Expedia has a small office open in Spain.
“Expedia has moved into a destination-driven industry, and Spain has such huge inbound travel,” said Jager. “It’s a good thing because this is a market that needs a boost from better players.
The three leading online travel agencies in the country – Rumbo.es, Viajar.com and eDreams – barely reached a combined 46 million euros in Spanish sales in 2002. Yet at least one-third of the population has Internet access, while broadband use is growing dramatically, causing triple-digit growth in many online travel agencies.
However, with that comes heavy consolidation among some of the smaller online travel agencies, as in most of the European markets. Spain’s online travel market is expected to barely pass 450 million euros in 2003, combined with the fact that 12 online travel agencies are all vying for business.
“What is taking place is an on-going process,” said Jager. “Spain has such a small market that some [online agencies] are barely able to make it.”