Phocuswright Europe: Travel faces a ‘New Power Distribution’

Phocuswright Europe: Travel faces a ‘New Power Distribution’

The prospects for growth in the travel sector are good and the online sector will continue to take market share, Phocuswright delegates were told.

Simon Lehmann, the new chief executive of Phocuswright told the organisation’s Europe event in Amsterdam that the travel market in Europe will grow to £310 billion by 2020.

“The outlook for travel and tourism stays robust despite economic fragility and political volatility,” he said “Stronger growth in 2017 has been underpinned by the global economy and the lowest fuel prices in a decade has boosted demand.”

Lehmann said while political uncertainty and issues like migration could impact travel, the online sector is set to outpace overall growth in the industry.

Today online accounts for Just under 50%, or $135 billion, of travel business but that is projected to rise to $180 billion, or 60%, of all travel bookings.

“Who said that travel products are distributed in an old fashioned way?” Lehmann said.

“Fragmentation in the European hotel sector and the highest penetration of online in the world are big opportunities for travel”

He said that by 2030 mobile bookings will account for 33% of all online bookings, up from 20% today, and that it is still an open question as to who will grab a chunk of that business.

“How will small suppliers and intermediaries compete?” asked Lehmann, adding: “It will not get more friendly out there.”

Strides being made by OTAs and hoteliers to drive more online bookings was dubbed ‘New Power Distribution’.

Lehmann said hotels currently typically seeing around 60% of distribution through indirect channels offers an opportunity for intermediaries like, which dominates in Europe.

He also said that artificial intelligence and voice will change the way travel is distributed in the future and that vacation rentals has become one of the largest verticals in travel and is changing the hospitality landscape.

“We have not seen such a revolution since the rise of the low cost carriers,” said Lehmann.

“Human capital remains key in the data driven world. We certainly need a new generation of consumer-centric hosts. Being new is not always easy to navigate but what remains clear is innovation fuels change and new things are incredibly powerful.”

Lehmann said Brexit threatens to change the European travel industry and he questioned whether London will survive as the unofficial ‘capital of travel and tourism’ on the continent.

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