“The impact of the so-called ‘sharing economy’ on Europe’s tourism industry is only in its beginning stages. One near certainty for the future of Europe’s leisure tourism sector is that China will play an increasing role – both as a source market, and as a source of investment capital.”
This report provides an overview and update about the European leisure travel industry. In particular, the important issues impacting the sector are reviewed, as well as who is innovating. Trends in travel distribution are identified and analysed and the impact of the sharing economy is evaluated. Finally, the top ten players in the industry are profiled and analysed, as well as the leading outbound country travel markets.
The macroeconomic outlook is quite favourable to the development of Europe’s leisure travel industry. However, ongoing expansion of the ‘sharing economy’ will continue to make its disruptive impact felt on traditional players in the sector like hotels and tour operators, as well as bus companies, railways and low-cost carriers (LCCs). Otherwise, China is set to play an increasingly important role in Europe’s leisure travel industry, both as a source market and as a source of investment capital.
This report looks at the following areas:
What is the outlook for spending on leisure travel and tourism in Europe?
Who’s innovating in the European leisure travel industry?
How is the holiday hotel market in Europe and North Africa structured?
Is cruising still a growth market in Europe?
Who are the key players in Europe’s leisure travel industry?
Key findings
The European leisure travel industry would do well to focus more of its attention on the growing segment of ageing consumers who have a disproportionate share of discretionary spending power.
The new EU Travel Package Directive extends travel protection to a wider group of consumers, including those who book dynamic packages as well as linked travel arrangements. The legislation will have the effect of levelling the playing field between the purveyors of traditional package tours and online sellers, but could also raise prices due to the higher cost of compliance for online intermediaries.
The EU offers subsidies that assist the European tourism industry through 11 different funding programmes that offer support and financing for infrastructure, conservation and the education and training of human resources. The programmes sponsor innovation, technological development and new tourism products that can benefit the European leisure tourism industry, especially small- and medium-sized enterprises (SMEs).
Private equity groups have invested in the European travel sector. The Chinese group Fosun has acquired Club Med, the world’s premier integrated resort operator, and purchased a minority stake in Thomas Cook, Europe’s second-largest tour operator. Nobel Capital Partners, a Dutch investment group, has acquired the remaining profitable activities of OAD Reizen out of bankruptcy.
With the finalisation of the purchase of Kuoni’s European tour-operator business, Der Touristik will become a strong third-ranked player in the European leisure travel market.
TUI, the world’s largest tour operator, has decided to centralise marketing and promotion around its core TUI brand and to progressively eliminate national or regional brands, such as: Thomson and First Choice in the UK; Nouvelles Frontières in France; and Fridresor in Scandinavia.
TUI Travel has been acquired by its German parent, TUI AG, to form TUI Group, which is now quoted on both the London and Frankfurt stock exchanges.
The world’s two leading cruise companies, Carnival and Royal Caribbean, are both firmly entrenched in the growing German cruise market, now the largest in Europe – Carnival with its AIDA subsidiary and Royal Caribbean with its 50% stake in TUI Cruises.
The German travel market reached a new high in terms of expenditure in 2014; however, a weaker Euro could put a damper on long-haul overseas holidays.
The UK outbound travel market is still below its pre-crisis peak, but is reviving on the back of a stronger economy and a rising Pound against the Euro.
The Italian travel market has been in a steady decline since 2009, but should stabilise with the forecasted modest revival in the Italian economy.
The Russian outbound travel market is being seriously impacted by a deepening recession and a depreciated Rouble, but domestic tourism is booming, as a cheaper, more ‘patriotic’ alternative. Russian tourism to Turkey had declined by approximately 30% year on year as of April 2015.
