The rise in online booking in Europe of 310% in the past 12 months, as reported by American Express Business Travel, is staggering.
In revealing these figures, Ron DiLeo, Amex's senior vice president and head of business travel EMEA, added for good measure that in the first six months of 2004, online business had increased by 213% in both the UK and the Nordic countries, by 144% in France and by 143% in Germany. Globally, Mr DiLeo said, the online market was now worth almost $14bn.
But this is just the start. While online booking in America now stands at 30-35%, in Europe it hovers around 10% although in the UK it is nearer 20%. But it is now rising more quickly than in America and Mr DiLeo said he expected it to level out at around 60-70%.
If other major TMCs have enjoyed anything like this growth, the long predicted and fundamental change in booking methods the European business travel market is now well underway.
It is no accident that as these figures rise substantially, the online agencies, now firmly established in America with some 23% of the corporate market, are making a major play for the European market.
Leading the field is Expedia which set up Expedia Corporate Travel in 2003 and has so far bought the Egencia agency in France and more recently and far more significantly, World Travel Management (WTM) in England.
Egencia had only a small share of the French market but WTM, with an annual turnover of Euro51m, was ranked at 22 in the Leading 100 Agents list of the UK magazine Business Travel World. It was a serious player.
It is unlikely in the extreme that Expedia, owned by the Interactive Group, will stop there with agencies in Germany and possibly Scandinavia next on its shopping list.
It would also be wise to watch Travelocity Business, set up in August 2003 as the business travel arm of Travelocity. It plans to arrive by stealth as existing multi-national clients in America switch their European operations to the online agency. This is due to happen when Extreme Network, a UN high-tech company, recruits its European offices to Travelocity Business in January.
Travelocity is owned by Sabre, one of the leading GDSs whose solutions arm, GetThere has been busy building up its European marketing team of late.
Again it is not surprising that Amadeus, another leading though European-owned GDS has bought a 55% controlling stake in Opodo, one of the larger of the European online agencies.
What is so attractive about the online agencies is that their fees are considerably lower than those of the traditional agencies.
Travelocity Business, Expedia Corporate Travel and the third leading US online agency Orbitz all charge $5 for an online booking and $20 for a telephone booking. The fees charged by the traditional agencies are respectively around $40 and $60.
This is a considerable difference especially for corporates looking to save money.
Where the online agencies have fallen down is that they have little if any experience of the wider demands of managing business travel for a corporate client.
Ellen Keszler, president of Travelocity Business, claimed hers was already a “full service agency” but others, like Expedia president Erik Blachford, admitted business travel management was “harder than it looks.”
Hence the need either to buy up those with that expertise like WTM or to proceed slowly and with care.
The traditional TMCs are naturally well aware of this, thus Amex's trumpeting of its success in the online world.
But it is a battle that has barely begun and one that could fundamentally change business travel management in Europe.