Online travel market conditions are reminiscent of when the recession first kicked in three years ago, according to Google’s travel industry head Robin Frewer.
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Google search trends reminiscent of 2008 financial crash
Online travel market conditions are reminiscent of when the recession first kicked in three years ago, according to Google’s travel industry head Robin Frewer.
Speaking at last week’s Travolution editorial advisory board meeting, Frewer said the search engine was seeing an extremely late booking market.
“Year on year we are still growing but the rate has decreased, not radically, but more than expected,” he said.
“To me that’s an early symptom of capacity cuts and customers are searching slightly less and we are starting to see an extremely late market.
“Before Christmas we saw extremely steep peaks and we saw that just before half term. Even though our growth rate is still good but slowing we think it’s shifted to a very late market.
“It’s similar to when the recession kicked in three years ago. It seems to be a very price-sensitive market. We are seeing very strong demand for the UK relative to other destinations.”
One indication of the lateness of the booking market, Frewer said, was the flat year-on-year growth in car hire queries, a product that is typically sold late in the purchasing process.
He also said this might be an indication towards a swing to the domestic holidays sector.
Frewer said he expected to see lots of deals in the lates market. “From the consumers’ point of view there may be great value to be had.”
Mark Maddock, lastminute.com managing director, said its Holiday Autos division had not seen the drop-off Google had seen but he agreed the market was getting later.
“We have seen our booking and lead-in times are a lot shorter across most of our categories. They are probably 20% shorter than two years ago.”
Maddock said a degree of nervousness had been forced on to the consumer due to the number of travel firm collapses, with airlines Malev and Spanair being the latest in Europe.
This has prompted a rise in the number and penetration of deal sites offering customers value for money, he said.
Hugo Burge, Cheapflights chief executive, said the publisher had been surprised by year-on-year growth in flight searches in the UK but that there had been a shift away from long-haul.
Latest Google data has shown searches for package holidays, both conventional and dynamically packaged, are veering towards the western Mediterranean, particularly Spain.
This has been driven by the lower value of the euro relative to sterling and price pressure in the previously high growth destinations of Egypt and Turkey.
