Phocuswright's Italian Online Travel Overview Twelfth Edition presents findings from proprietary research conducted in 2016 on the Italian leisure and unmanaged business travel markets. This effort was undertaken as a component of a multipart project that assesses the European travel market as a whole, and which includes in-depth analyses of six key European markets: France, Germany, Italy, Scandinavia (comprising Denmark, Norway and Sweden), Spain and the U.K. (including Northern Ireland). Estimates and projections for the total European market are based on the first 15 European Union (EU) countries - the so-called EU153 - plus Switzerland and Norway. The methodology used to conduct this research is consistent across all markets, and is detailed below.
To evaluate the markets, Phocuswright interviewed executives from over 90 Europe-based airlines, hotels, tour operators, rail companies, car rental companies, online travel agencies (OTAs), traditional travel agencies and travel technology companies.
Unless otherwise indicated, all sales are based on gross bookings - that is, the total transaction value of the (European and non-European) products sold in Europe for leisure and unmanaged business travel. Online gross bookings are generated via consumer-facing websites that sell to individuals, including unmanaged business travelers purchasing outside of corporate travel policies. Online gross bookings include sales from European and non-European travel suppliers that are transacted via supplier websites, OTAs and tour operators (including their respective mobile channels) sourced from the specific markets covered here. Corporate online booking systems such as KDS and Amadeus e-Travel are excluded from the online figures.
All financial information is based on data obtained from publicly available financial reports or company interviews. Estimates and projections are made based on executive interviews, third-party information, economic indicators, market trends and Phocuswright analysis. Data is actual for 2014-2015 and projected for 2016-2020. In charts and figures, totals may not always add to 100% due to rounding. All currencies are in euros (€) unless otherwise indicated - as in the U.K. chapter, where figures are in British pounds (£) - and converted at the average rate for the period they represent.
References to the "travel market" are understood to cover the total travel market including both online and offline travel, while "traditional travel agency" refers principally to offline travel agencies. The total market is based on travel suppliers' gross bookings, irrespective of the channel used for the transaction. Since OTAs are resellers of suppliers' products and services, OTA gross bookings are not included in total market sizing in order to avoid double counting. However, for comparison purposes, some charts and figures include both online supplier-direct and OTA bookings. In assessing the market, Phocuswright applies the following methodology to each respective travel segment:
OTA: OTA market sizing estimates and forecasts are based on the local market demand processed via pan-European and local OTAs. Phocuswright figures express the total transaction value of travel sold via OTAs in each respective source market. For example, bookings generated within the U.K, for both domestic and international travel, are allocated to the U.K. market. Total OTA bookings represent the sum of domestic and international supplier bookings processed by OTAs. Since metasearch sites operate on a referral model, metasearch revenue is excluded from the OTA category.
Airline: All airline supplier gross bookings are assigned to the market in which the supplier is headquartered. For example, all business generated by Lufthansa worldwide is allocated to Germany, while all Air France/KLM revenue is allocated to France. IAG airlines (British Airways and Iberia) are an exception, as their figures are reported individually; therefore, their revenue can be assigned to the U.K. and Spain, respectively.
Hotel: All hospitality supplier gross bookings are based on room revenue generated by properties in each market. Room revenue for hotels and guesthouse/bed & breakfast establishments is included in supplier gross bookings, while private home or vacation rentals, homestays, camping and similar accommodations are excluded. Room revenue also excludes food and beverage as well as sales related to MICE (e.g., meetings, conferences, etc.). [Note that OTA gross bookings include all types of accommodations sold by the OTAs.]
Rail: All rail gross bookings are assigned to the market in which the rail operator is headquartered. For example, all rail business generated by SNCF is allocated to France. Total gross bookings generally reflect long-distance and regional rail travel, while commuter rail revenue is excluded from market sizing calculations.
Car Rental: All car rental supplier gross bookings are based on revenue generated by rental fleets operating within the country.
Tour Operator: Gross bookings for Europe-based tour operators are assigned to their respective source markets and are included in the total tour operator sales for that individual market as well as the European tour operator market. However, only a portion of these gross bookings (typically 25-35%, depending on the country) are added to the total European market size, since individual supplier segments are already included. Gross bookings that are added to the total European market include: 1) non-Europe tour operator bookings (e.g., hotel and destination services/transfers in Turkey) generated by each source market, and 2) own tour operator products/services (e.g., own and third-party charter flights like SunExpress,4 and own hotels in Turkey such as Sentido Hotels & Resorts by Thomas Cook).
For example, TUI Travel's U.K. sales are assigned to the U.K. market and included in the total tour operator market size for the U.K., as well as the total European tour operator market size. However, only a portion (approximately one third) of these sales are included when calculating total U.K. and Europe market size. Examples of non-Europe revenue included in market sizing are hotels, tours and services in Egypt, or charter flights via EgyptAir. Since Europe-based tour operator gross bookings are partly excluded from the total, tour operators are under-represented as a segment in the total market size.
Additional Considerations: As detailed above under Tour Operator, aggregating individual supplier segment estimates and forecasts will not yield the same results as total market estimates.
Total market data is based on publicly available financial results. Segment sizing includes several adjustments to avoid double counting and is estimated based on executive interviews, third-party information, economic indicators, market trends and Phocuswright analysis.
When distinguishing supplier-direct from intermediary bookings, Phocuswright allocates the transaction to the final merchant of sale, irrespective of where the traffic originated. For example, bookings initiated on a metasearch site can be redirected to and completed on either a supplier or OTA site, or else processed by a supplier or OTA directly within the metasearch site (e.g., TripAdvisor's Instant Booking feature). In either case, the transaction is allocated to either the supplier-direct or OTA channel, based on the company that handled the final booking and payment processing. Car rental companies' partnerships with airlines and hotels function in a similar way, in that customers searching for car rental products on an airline or hotel website will often be directed to the car rental website to process the payment.