Internet bookings to surge in downturn

Internet bookings are set to surge in the downturn, according to new predictions in the latest trends report from ITB Berlin.

The demand for domestic travel will stay stable or grow, as will the demand for low-cost flights, but long-haul will fall sharply, and there will be much pain felt in the
business travel and MICE sectors.
Based on 500,000 travel interviews in 58 countries around the world, IPK
delivered a wide-ranging forecast. In the predictions, IPK suggested that 2009
will see travel declines in most markets, with 2010 neutral and small growth
likely in 2011 and 2012.

IPK International’s CEO Rolf Freitag said: “We’re in a full global economic crisis,
not a small recession. Consumer greed of the last few years has turned into
consumer fear.”

However he pointed out that travellers are increasingly using the internet, in particular using mobile phones, not just to find information, but to book and pay for holidays. The internet as a travel tool will continue to grow in 2009, according to the survey.

Online portals such as City.mobi, the world leader in mobile travel portals, City.mobi, are set to reap the rewards.

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IPK’s travel interviews suggest that 40% of Europeans will change their travel
plans due to the economic crisis. Some 66% of Europeans and 60% of Asians
plan to change. Mr Freitag said this change would mean they likely to switch to
domestic travel, travel for shorter periods of time, choose cheaper destinations,
or spend less while on holiday.

European and North American markets will be more adversely affected compared to other regions of the world. IPK predicts that China, India and all of Latin America will record GDP and travel demand growth, even in 2009.

However, those growth figures will be smaller than the precedents set over the
last 10 years.

Mr Freitag pointed out that over 50% of global travel demand emanates from
Europe. Within Europe, in 2008, the Russians, Dutch and Poles recorded much
higher than average travel rates. However, the strong devaluation of the Russian
rouble and Polish zloty suggest that such strong performances are unlikely to be
repeated in 2009.

While Turkey, USA, Austria and UK all received strong growth in arrivals numbers
from European travellers in 2008, IPK predicts they are unlikely to do so again
this year.

In households that earn more than 20,000 Euro a year, travel will remain a high
priority, according to IPK. However, households earning less than 20,000 Euro
are much more likely to adjust travel plans towards cheaper and/or domestic
trips.

To help them face the economic downturn, which is likely to go on longer than
previously predicted, Mr Freitag said companies should reduce costs, go on a
price cutting offensive, enter into partnerships with the public sector,
communicate new attractions more aggressively and intensify e-marketing and esales
initiatives.

Companies with good asset security can take advantage of low interest rates to
borrow money and invest for the upturn which will eventually come, he said.

The entire ITB World Travel Trends Report presented by IPK today will be
available on 30 March as a free download on www.itb-berlin.de. Visitors should
click on ‘Media Centre’ and then ‘Publications.’
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