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Europe’s online travel growth defies debt crisis

November 28, 2011 | Online Travel

The French favor monthlong summer holidays. British winters are so chilly many locals take trips to warmer climes. And most Europeans are only now starting to use online travel. Those factors help explain why online travel agents Priceline, Expedia and Travelzoo are expected to see continued surges in European sales despite the continent's ongoing debt crisis.

In its Q3 earnings report Nov. 7, Priceline said international bookings soared 72.9% to $4.99 billion. Priceline doesn't give regional breakdowns, but analysts say the lion's share of that came from Europe. U.S. bookings, by contrast, rose just 13.1%, to $1.27 billion.

CFO Daniel Finnegan said in a post-earnings conference call with analysts Nov. 7 that Priceline's core markets, Western Europe and Southern Europe, "continue to post very strong growth."

Expedia's Q3 international sales, which include Europe, jumped 24%, compared with just 7% for the U.S. Travelzoo's European revenue hit record levels in Q3, soaring 65%. Its North American bookings rose by half that, at 32%.

"When it comes to leisure travel, we've found that European consumers are rather resilient," said Carroll Rheem, an analyst with travel research firm PhoCusWright. While U.S. consumers have tightened travel and leisure spending in the face of higher gas prices, high unemployment and stock market swings, Rheem says this isn't the case with Europeans.

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