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Online Travel Agencies

Destinazione Italia 2020

Philippe ChérèqueExecutive VP Commercial Amadeus IT Group

Torino, 30th January 2009

How online booking is changing tourism and global trends

Agenda

� The online evolution

�Travel 2.0 and the improvedshopping experience

� Cultural matching

� Selling online: key successfactors

� The future of mobility

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European online penetration evolution

32%34%

36% 37%39%

21%25%

28%

32%

35%

0%

5%

10%

15%

20%

25%

30%

35%

40%

2006 2007 2008 2009 2010

US Europe

Source: PhocusWright’s European Online Travel Overview 4th Edition

� In Europe, and in 2008, approximately 28% of all travel was acquired via on-line channels.

� This is still about 6pp less than the US, but the faster European growth will shorten the gap over the next couple of years.

� On a by market basis, the highest on-line penetration is in the UK, Scandinavia, and France. Italy has an on-line penetration of 12% which represents a significant growth opportunity for the on-line channels.

0

50

100

150

200

250

Europe United

Kingdom

France Germany Spain Italy Scandinavia

€B

Total transaction volume

Total Online transation volume

28%

40%23%

20%17% 12% 37%

% Online penetration

Online Penetration Overview

2006-2010

European Travel Markets Online Penetration

2008

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European online growth & penetration by channel

Source: PhocusWright’s European Online Travel Overview 4th Edition

� Overall, about 2/3rds of on-line sales are made directly at supplier websites. However OLTA sales are growing faster than supplier websites, as customers appreciate the choice and good service given by OLTAs.

� Product-wise, air has by far the highest on-line penetration, although on-line sales are gaining ground across all other business lines

33%

67%

Supplier Website OLTA

33%

27%

13%

15%

10%

15%

21%

19%

15%

19%

0% 5% 10% 15% 20% 25% 30% 35%

2008

2006

Air Hotel Car Tour&DP Rail

European Penetration by Channel(%) 2006-2010

European Online Total Transaction Volume vs Supplier website

2008 in (€B)

38%

64%

Supplier

Website

OLTA

2006-2008 Growth

€70B Online TTV

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5

Travel 2.0 Improved shopping experience

Travelocity 1996 Travelocity 2008

� Powerful low-fare search

� Date flexibility

� Full choice of fares, itineraries, schedules

� Reliability in finding available fares

� Simple, secure booking flow

� And even more

� Change your booking online

� Fare alerts

� SMS alerts

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Cultural matching

- Customer Conversion

- User Experience at the center

- Online loyalty

Digital immigrants

Digital native

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The challenge of customer conversion

“The average online

retailer fails to convert

fully 97% of their site

shoppers into site

buyers.”

Forrester Research & Shop.org

“70% of consumers

report satisfaction when

completing transactions

in stores, versus 26%

for a web shopping

experience”

Forrester Research 2006

�©

2008

Tra

velT

ain

men

t

�The Amadeus Leisure Group

The perfect “what” combination

what you search for...

what like-minded people recommend...

what you find...

Duration

Traveler

Children

Rating

Room-Type

Accommodation

Children's programme

Close to the beach

1 Week

2 Adults

2 years, 4 years

4 Star

Family-Room

All Inclusive

“Ok, just another hotel review solution –

so what?”

� Common challenges of user generated content:

� Lack of credibility

� Achieve critical mass

� Extensive administrative processes

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Aggregating content is easy, making it accessible and searchable is harder

“The ultimate search engine would basically understand everything in the world, and it would always give you the right thing. And we're a long, long way from that.”

- Larry Page, Google Co-Founder

“Search as a problem is only about 5% solved”

- Udi Manber, CEO of Amazon’s A9.com search engine

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Customer Reviews

Time

Fit with customer requirements

Online Information

Attribute Search

Value Driven Search

Customer involvement in action

Beste Reis

ezeit

Einreisebe

stimmunge

n

Impfempf

ehlungen

Sprache

Bookability Online Direk

te Strandla

ge

Kinderfreu

ndlich

Zimmer mi

t Meerblick

Großes Sp

ortangebo

t

Destination Search Future Booking Systems

�©

2005

Co

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ibu

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.A. /

all

rig

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res

erve

d /

un

auth

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tric

tly

forb

idd

en

Our plea to hardware manufacturers

PLEASE

WE DO NOT WANT

TO LOOK LIKE THIS

�© 2008 PhoCusWright Inc. All Rights Reserved.�12

Convergence

PNDMobile Phone

Digital Camera MP3 Player

Mobile Wallet

Electronic Entry Mini

Laptops

iPhone 3G

Gaming Devices

BlackBerry Storm

T-Mobile G1 (Google)

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Summary

� The travel industry & Customer are reshaping the online experience

� The convergence of mobile technology

� The “search” as a key challenge

� Empower Customer with simple and efficient technology and online tools

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Thank you !

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