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  Complete restructuring of the travel industry. A study conducted by the bank, Bear Stearns, reveals the extent of the damage

of the travel
A study conducted
by the bank,
Bear Stearns,
reveals the extent
of the damage


The European online travel market
has really taken off


The investment bank Bear Stearns has sparked things off in a study entitled "Point, Click, Trip: An Introduction to the Online Travel Industry" revealing that 25% of travel agents could lose their jobs in the next few years as eTourism sites continue to expand!

Bear's in-house analyst, Jason Ader, said that there is no doubt that there is an enormous potential for growth in Internet Travel. The question is, who is going to benefit from it and who is going to lose out?

Bear Stearns has calculated that, in the first half of 1999, 1,800 travel agencies closed down in the US because they were unable to hold out against the pressure to lower commissions and also, quite simply, because customers now prefer to reserve online!


Travel agencies will only be able to stay in the game if they can find a specialised niche, such as luxury holidays or adventure trips, or if they can provide real added-value in terms of customer service.

The fight is likely to be even tougher in the Web site sector! The report estimates that out of the 1,000 sites offering eTourism services today, only 20% are likely to survive.

Sites which have already made their mark, such as, and, won't be involved in the battle, since they already have enough customers to ensure their future survival. The others will be absorbed by more powerful competitors, lower their sights, or go bankrupt.

For Bear Stearns, discount sites like are in a particularly difficult situation. Airline company sites will be putting their own "special Internet" tariffs online to fill up empty seats, and will deal directly with the consumer. Only middlemen who have been able to develop close relationships with their e-customers will be able to defend their future position on the market.

The study shows clearly that eTourism has acquired a decisive share in today's global tourism market ( is classed 9th out of all categories of travel agencies in the world!) and that the many changes taking place are affecting the industry as a whole.

Source: Bear Sterns

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    The European online travel market has really taken off  


According to a recent study conducted by the Bornholm Research Centre in Denmark, European online travel sales will go from $800m in 1999 to $2bn this year (29% of European e-commerce according to eMarketer's estimate). Note that, in the US, online travel sales are expected to exceed $12.4bn this year!

The steep rise of the European figure is still spectacular, though, and shows that the investments made over the last 2 years are fully justified. The extent of the market which is emerging today will enable these click or brick & mortar pioneers to generate sizeable turnovers (several hundred million francs annual turnover)... which will enable them to continue to increase their investments (venture capital, IPOs, takeovers, investments, etc.).

The positive spiral effect this creates should contribute to redistributing market shares in the European travel industry.

Moreover, Bornholm Research Centre predicts that the online travel figures will continue to grow in the years to come to reach:

  • $3.2bn in 2001
  • $4bn in 2002

It comes as no surprise to find that the lion's share goes to airline reservations, which take 55% of the market share. This is followed by hotel reservations (20%), with package holidays close behind (19%).

Germany and the United Kingdom are the 2 most important markets to date (28% and 27% of the European market). Despite their small populations, the Scandinavian countries account for 18% of the market... equal to the collective market shares of France, Belgium, Holland, Austria and Ireland.

This confirms that experienced Internet users have well and truly got into the habit of reserving online.

Source: Hotel Marketing - Carl H. Marcussen / Research center of Bornholm

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