Though
Spain represents a small percentage of the online
travel market in Europe, it plays a significant
role in its overall development. Major players
such as flag carrier Iberia and hotel giant Sol
Meliá are building a significant online
presence, and playing a leading role in the promotion
of online travel in Spain. In addition, a group
of at least 12 online travel agencies, all vying
for the public's attention, will create further
demand for online travel in Spain.

Because of these efforts, Spain's share of
the online travel market in Europe, which is
currently at 3%, will growth to 5% by 2005,
according to European Online Travel Marketplace:
Focus on Spain, a new report published by PhoCusWright.

Led by the U.K., France and Germany, the European
online travel marketplace reached 7.6 billion
euros in 2002, according to the PhoCusWright
report. Gross bookings are expected to more
than triple in three years to reach 27.9 billion
euros by 2005. The report series covers the
leisure and unmanaged business travel industry
in five markets – Spain (now available), France
(now available), the U.K., Scandinavia and
Germany. Each report includes an overview of
Europe and a pan-European and local examination
of online travel agencies, airlines, lodging
companies, rail, and travel agencies/tour operators.

Among the major European markets reviewed
by PhoCusWright, Spain may be the smallest,
and e-commerce has been slower to develop in
Spain as compared to other countries. The market
is highly fragmented, indicating lack of maturity.
The three leading online travel agencies in
the country – Rumbo.es, Viajar.com and eDreams – barely
reached a combined 46 million euros in Spanish
sales in 2002. Yet, at least one-third of the
population has Internet access and broadband
use is growing dramatically. Many online travel
agencies are experiencing triple-digit sales
growth. This represents opportunities for pan-European
players looking to position themselves in Spain
via acquisition.

Further complicating the online travel landscape
will be the entry of Expedia and Opodo, which
both announced future plans to enter the market
with local offerings. And offline players,
such as El Corte Ingles, Halcon Viajes and
Viajes Ecuador, will gain momentum online – if
they can stop worrying about cannibalization
of their existing businesses.

As in most European markets, there will be
consolidation among the online travel agencies,
as the online travel market in Spain – expected
to barely pass 450 million euros in 2003 – cannot
support the vast array of players. As with
other countries, deep resources are required
for local travel
companies to compete alongside international
players and local suppliers.