While Southern Europe provides three of the continent's four most-visited tourism destinations, it is the potential of its outbound travel markets that is currently attracting…
While Southern Europe provides three of the continent's four most-visited tourism destinations, it is the potential of its outbound travel markets that is currently attracting the attention of Europe's leading travel agents and tour operators, according to the recent Travel & Tourism Intelligence (
The European Leisure Travel Industry paints a rosy picture of the state of market generally. Some 326 million Europeans travelled internationally in 1999, an increase of 6% on the 1998 figure, which in turn represented 5% year-on-year growth. Of these travellers, 64% were travelling for the purpose of leisure – in fact, leisure spending typically accounts for 8-11% of all consumer spending in European countries.
Size Matters
With the sector more lucrative than ever, the big players have been looking to consolidate their market positions – and the initiative has been coming largely from German and UK-based groups, The European Leisure Travel Industry reports. In 1999 only Swiss-based Kuoni infiltrated the Anglo-German hegemony of the eight largest groups in Europe, with TUI Group comfortably at the head of the list. In fact, no less than seven German groups were ranked in the top 20. The most significant development of 2000 was the purchase by Preussag, TUI's parent, of European number three Thomson (announced in May and approved by the EU Commission in July). Not only has this triggered a further round of take-over speculation (Preussag's enforced disposal of Thomas Cook has alerted C&N amongst others), but also it will create a company which, with 20.6 million passengers, is almost twice the size of its nearest competitor.
While the dominance Northern European groups can be largely explained by the size of the German and UK markets – in 1999 only surpassed by the USA in value – outbound travel from France, Italy and, to a lesser extent, Spain creates significant revenue. To date, the history has been of the giant Northern groups looking elsewhere for opportunities – both TUI and C&N have stakes in Eastern Europe and are major players in Benelux; Thomson and Airtours moved into US and Scandinavian markets before looking at continental markets; and German and UK companies remain keen to acquire stakes in each others' countries.
However, the significant shift over the next 12 months is likely to be the move South – all the key players have made this objective clear, and Preussag/TUI have plans in place to buy up to a third of Nouvelles Frontieres. In fact, this is one of many significant groups based in Southern Europe – Club Med, Iberostar, Alpitour are others – but it is the expansionist intent of the German and British companies that makes the difference in the ever-more complicated network of European leisure travel ownership links.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
