Specialist portals such as Booking.com and HRS are winning a greater share of the German online travel sales market where overall growth is slowing and demand for more individual offers is rising, according to the annual fvw dossier on the German travel agents market.
There are still no reliable overall figures for the size of the German online travel sales market. Market researchers GfK estimate that online sales accounted for 43% of the overall €57.4 billion generated by leisure travel sales in Germany last year. This would represent a market size of nearly €25 billion, making the sector larger than the traditional travel agency market which reached €23.5 billion last year.
However, the online travel market, which regularly grew at double-digit rates over the last decade, including 13% in 2014, has now slowed to single-digit growth, according to GfK. It puts growth at 7% for 2015, although this is still well ahead of the 1.6% sales growth generated by travel agents.
Moreover, none of the leading players release revenue figures for Germany. The figures in the Online Travel Agents (OTA) ranking are therefore mostly fvw estimates, based on a diverse range of sources including company reports, market studies and expert opinions.
Unister, which operates portals such as Ab In Den Urlaub and Fluege.de, is still the largest German travel e-retailer but its revenues dropped to an estimated €1.9 billion last year from €2 billion in 2014, according to the fvw dossier.
Booking.com is ranked for the first time with Germany revenues of €1.6 billion that put it in second place. Third is Expedia, whose Germany revenues are estimated to have increased to €1.3 billion last year from €1.1 billion the previous year. Another new entry in fourth place is accommodation specialist HRS, with revenues of €1.2 billion.
Seven Travel’s revenue is estimated to have grown to €850 million last year, ahead of Holidaycheck with €805 million and the highest ranked traditional travel agent, Schmetterling Reisen, with online sales of nearly €710 million. Other leading OTAs and portals include Odigeo Edreams, Check 24 and TUI Germany. Also ranked for the first time is Airbnb with estimated Germany revenues of €400 million.
One market trend, according to managers and experts, appears to be the move away from ‘generalists’, offering travel packages, towards ‘specialists’, or so-called ‘product portals’, especially accommodation providers. Unister chief Thomas Wagner said this trend showed that customers want more individual offers. “Customers are increasingly willing and able to combine their travel components separately and individually on the internet,” he commented.
Holidaycheck CEO Anja Keckeisen highlighted the tougher competition between the big portals in the last two years, especially in marketing. “TV (advertising) costs have more than doubled,” she said. Online market leader Unister spent some €138 million on advertising last year, according to Nielsen.
Dirk Föste, TUI’s Chief Digital Officer, said that tour operator and travel agency portals combined saw slightly lower growth last year. TUI Germany is estimated to have increased online sales to €620 million from €540 million last year. In response to the ‘individualisation’ trend, Germany’s largest tour operator is now planning to make its ‘tui.com’ portal “more intelligent” to reflect customer preferences more closely.
One big winner is Check24, an all-round ‘product comparison portal’ covering sectors ranging from insurance and home financing to electronics and household goods. The company has invested massively in TV advertising to win customers and saw its tourism revenues more than double to an estimated €644 million last year from €288 million in 2014. Its next step will be to launch ‘individualised packages’ through its own dynamic tour operator Aurum Tours.
Looming on the horizon, however, are technology giants such as Google, Facebook, Apple and Amazon. Google, for example, is already adding more travel products and services, from Google Flights and Hotelfinder to the new ‘Book on Google’ and the ‘Google Trips’ mobile app. Facebook and Apple have a massive international customer base, while e-commerce giant Amazon would be well-positioned to launch a ‘travel marketplace’. Even communication channels such as Whatsapp and Snapchat could be used for travel sales in future, experts believe.