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Italy Cautiously Embraces Online TravelMarch 9, 2010 By: George Dooley
Italy has long been a favorite destination for American travelers, and tourism is a vital part of its economy. In a new study. PhoCusWright offers insights into Italy and the Italian market in its recent FYI report.
In spite of the current economic crisis, the online travel market is one of the most active segments of the Italian travel industry and will continue to grow in 2010 at a rate of 9 percent— outperforming the overall market according to PhoCusWright's Italian Online Travel Overview Fifth Edition. The overview provides U.S. agents with interesting contrasts, especially on the impact of online travel trends.
Air traffic and, surprisingly, rail remain the most outstanding sectors for online sales in Italy, PhoCusWright reports. On the other hand, tour operators and hotels lag behind. Tour operators were hit hard by the economic crisis and H1N1 in 2009 and are still hesitant to make the move online.
“The hotel industry which remains highly fragmented, geographically dispersed and largely independently managed, is also reticent to adopt online distribution en masse,” PhoCusWright says. “Overall, the traditional travel agencies still hold most of the market share, but online travel agencies have started collaborating with them directly. Italians have been slow to embrace online travel purchases for diverse reasons: broadband penetration is low and still relatively expensive; they are by nature hesitant to release personal information over the Internet; traditional offline players have powerful ties and still sell the vast majority of travel related products; tour operators have been cautious about challenging conventional distribution channels; credit card usage is still relatively low and most credit cards have limited spending margins per month and the country’s population is aging rapidly, resulting in slower adoption of the Internet than other markets.”
Online penetration is expected to reach a full 20 percent by 2011 as, according to PhoCusWright, Italy will continue to lag behind more mature markets. But the figure represents a significant milestone for Italian online travel as mobile phone penetration in Italy is the highest in Europe.
The report is a subset of PhoCusWright's European Online Travel Overview Fifth Edition which includes analysis of France, Germany, Italy, Scandinavia, Spain, and the UK and provides data and analysis essential to understanding the dynamics of key market and forecasting the business performance.