Europeans have steadfastly held on to the belief that travel is an integral right of theirs, according to Carroll Rheem, Director of Research specialized in consumer research at PhoCusWright Inc, a travel industry research authority on how travellers, suppliers and intermediaries connect.

Rheem said that it would seem impossible imagining Europeans relinquishing this right, anytime in the near future. However, in times of crisis– particularly since the crashes of the past 10 years - they have downsized and modified their plans rather than giving them up altogether.

According to Ms Rheem, during economic crisis, travellers are doing everything to maximize their travel experience yet minimize expenses associated with travel. The last decade has seen incomes fall and jobs becoming less secure. People have a general distrust in the economic future of their countries.

Thus, the travel industry must make efforts to adapt their booking technologies to this growing trend of financial insecurity. The travel industry has been forced to look closer at traveler preferences and priorities and to offer new products and services which fit into this ever-growing mind-set.


Carroll Rheem, PhoCusWright Inc.

At the ITB Berlin, Carroll Rheem gave insight into how American, British, French and German consumers make their decisions and how new technologies help in their decision making process. She believes that the industry's current, perhaps even primary role is to find ways to give consumers a voice and to adapt their wants to their travel booking needs.

Ms Rheem said that the travel industry today has only reached 2008 levels. But these figures can be misleading. Her research indicates that fewer people are travelling. However, those who are travelling are booking more flights and spending more overnights than previously. One is not really seeing substantial growth figures in the industry, but rather shifts as to where people are travelling to and sources they are using to travel – thus shifting trends as opposed to new ones are what Rheen has been observing.

Rheem said that France saw the biggest rise to-date in travel trend shifts. However, France also had one of the hardest tumbles during the economic downturns - thus their increase is visually substantial – even if actual numbers are below those of Germany and the UK, with Britain still being European market leader.

According to Ms Rheem, younger travellers led the recovery in general. This is in part due to the fact they are also more adept at using alternative resources for researching and booking their travels. Rheem said that younger people are generally more optimistic even during economic downturns. They also have fewer responsibilities to others and can thus risk the travel in times of crisis.

In the US, younger travelers seem to spend more than older people. Also, they outspend their European counterparts as well. In Europe, the hostelling mentality is far more developed than in the US – where attractive hotel categories are preferred.

In both the US and in Europe, travel frequency is up – although significantly more in the US

Carroll Rheem introduced her psychographic matrix at the ITB-Berlin. In it, she stressed how important travel is in modern lifestyles. "People prioritize travel within their budgets," she said. "It is important to note that although travel has still not surpassed 2008 levels, the thought of travel has become increasingly importance in the lifestyle decision making process of individuals," she said. Rheem's research shows that the less one travels, the higher the importance travel becomes.

There is, however, also a segment of people who, over the years, simply have not been able to afford travel. These people, according to Rheem, have simply begun to cut the simplest thoughts of travel out of their lifestyles (minds) altogether. For the rest, even for those who do not prioritize travel, they still squeeze some kind of travel plan into their budget. The Germans and French put travel prioritization at the top of their to-do lists, more so than Americans and British. Astoundingly, British prioritize less than Americans. However, overall British travel figures remain high as travel in Britain has a longer history than in other countries.

Travel takes up only a very small fraction of people's lives. This makes it all the more astounding how much emphasis is placed in budgeting for it, according to Rheem. "The travel budget is somehow always made to fit in," she said.

Trends show that US and UK travelers stick to popular destinations – often more close to home. In Europe, the trend is to do more regional travel or to go further away – often completely off the beaten path. The Germans and French are very similar in their travel tastes. Exotic, far-off destinations are often cheaper than local travel. And simply the mere distances of regional and exotic destinations are a primary reason for longer trips.

Social media are another reason why travel to further off destinations has been so successful. Online discussions, postings on social media pages, etc have allowed more people than ever to be informed – supplying them with options they might never have thought about previously.

Online travel existed for decades. Travelers are increasingly getting used to online channels, when it comes to making travel choices. Since 50% of all travelers do not have a travel planning routine, this makes it more important than ever for travel industry suppliers to create options that might attract such consumer decision makers – particularly last minute ones.

French are the most optimistic, when it comes to investing thought in their future and the future of their travel. This is one reason that the matrix curve of French travelers is higher than for other countries. British travelers are much more subdued in their outlook on the future.

According to PhoCus research, French and German travelers will probably end up spending much more on travel in the near future. They will make their plans and stick to them, whereas British travelers will be more apt to change their plans in economic downturns, for example.

Online booking is on the increase, to the detriment of offline agents. However, PhoCus believes that this trend will not increase significantly. Ms Rheem said that there will continue to be high demand for travelers looking and booking online. Many, however, still seek human contact (offline) because questions are often still missing from websites. Others seek offline assistance in order to book special events or for special needs.
 
"In time, offline booking for normal travel needs will wane once all questions can be answered online," Ms Rheem said. However there is always going to be a need to book special travel needs – such as honeymoons, etc. "In fact, there will probably be a rise in this segment with exotic travel on the increase," she said. With this in mind, the offline sector, despite losing market share, will survive – albeit in niche sectors.

In sum, offline suppliers still have the largest market share, when comparing to OTAs. OTA share will increase once all answers can be found online and when the meta-search process is, from a consumer perspective optimized.

Optimization includes convenience in mobile phone device use. To-date, iPhone users are more active on their phones – especially for maps. One could assume that iPhone interface applications are more convenient.

In the entire online process, Rheem could not determine that users are bothered by the fact that most search services transfer to an external source when the final booking/payment is made. However, the trend will be that all online booking sources will eventually adopt their own payment systems since this is the area where people have distrust when going through the last phase of booking. Consumers want one agent in the end, where transparency and the one-shop-stop can be guaranteed. This though was also underlined by Darren Huston, CEO of Bookings.com who also shared this view at a press conference he gave.

Mobile and social trends

Germany is a bit behind on mobile internet research. France and UK are similar and both are leaders in this segment. The British and French generally search, shop and buy online. French are particularly consistent in picking up their mobile devices for interacting in the internet – in social networks, for example.

Browsing is a baseline matric (all mobile users, not just smart phone users). 44% of French travelers have browsed in the past 12 month and 52% say they will do so in the coming year. Their primary reason for smart phone surfing: maps and travel product researching.

Social networks are increasingly more popular. But they do not yet have the same growth trajectory when it comes to travel activities as OTAs or mobile platforms - when it comes to travel activities.  Momentum in the mobile sector is not as strong in Germany as in France or the UK. But it is growing. The mobile base in UK is larger than in France and German, but upward momentum is lower.

Comparatively, France is more the trendsetter

PhoCus estimates that half of all travelers use Social networks. UK is ahead of the pack. In Germany, social networks are not as strong. Rather, Germans are heavily into using professional online networks such as LinkedIn as opposed to the British who are more Facebook users. Ms Rheem believes that the online networks have been and will increasingly be instrumental in changing travel trends.

Today, sharing information on social media sites attracts people to do things and think about things they would normally not have thought of. Uploading pictures, posts of travel experiences, etc has enticed online users to search more deeply for travel experiences they would normally not have searched for. Travel reviews, whether through online portals like Travel Advisor or simply through personal web postings on Facebook, for example, have become an important factor in the travel decision making process.

Booking directly via social media sites is still not mature. However it is on the increase. "The appetite for booking travel within the wall of the social network is not high… yet," Carroll Rheem said. "With time, experiences will be customized and lines of friction will have been removed…making travel bookings directly from the walls of social media a normality," Rheem said. This was also underlined at the ITB-Berlin by Dr. Bernd Fauser, Google's Travel Top Accounts Department, who believe that this will be the trend.

From a mobile perceptive, clumsy fingers on this screen and imperfect voice recognition are points of friction that will eventually disappear. Developers' most important task today is figuring out why are people not booking and to find solutions for this.

And until there are huge developments in the online industry, there are few "changes" that can be reported in the industry. Rather, Rheem has noticed shifts instead - shifts, for example, from one supplier to another. So market-share stealing is the issue at hand, rather than market development, according to Rheem.