on travels checks. Since the 1960s and 1970s, Americans spread the use of electronic cards throughout the world, much supported by its leading airlines and hotel chains. The Europeans did not adopt electronic cards until the 1980s, but until the 1990s, electronic cards were mainly used by business travellers. In addition to travel use, electronic cards were being gradually used in shopping stores. It was the spread of the computer and communication technologies that opened the road to electronic cards, because electronic systems require the quick transferring of payment information between airlines, hotels, and banks, including authorisation of cards and services in relation to lost and stolen cards, etc.
Currently, Visa and Master Card are internationally the most used electronic payment cards, followed by American Express. They are all separate companies of their own. VISA is a partnership of more than 20,000 financial businesses, 20 million companies and 1 billion users around the world.77 VISA originated from Bank of America and was turned into an independent company in the 1970s. Globally, VISA had its real breakthrough in the 1990s. In 2007, VISA had revenues of some $20 billion and is used in about 200 countries.
Master Card is the other large international electronic payment card.78 Like Visa, it derived from the American banking sector, and has about the same global extension as Visa. American Express started in the 19th century as a company for money transfers.79 Since the 1960s and 1970s, American Express developed its electronic payment business along with its travel activities. Addressing particularly well-off people, American Express is less used than the other two cards.
Few countries include an all-encompassing national card system such as Denmark’s Dankort.80 A Country with a population of 5.5 million people has 3.5 million cards, of which one-third is combined with VISA or another international payment card. The use of electronic cards in Denmark accelerated in the 1990s and today, it is the most common form of direct payment. The Dankort company is owned by the Danish banks.
Car Rental
Car rental developed into a global business, too. A few American and European companies have consolidated the global market. In the US, the world’s largest car rental firm, Hertz, has revenues in 2007 of $8 billion and more than 7,000 offices in almost 150 countries with more than 400,000 cars for rent.81 Number two is Avis with revenues in 2007 of $5 billion and 5,000 offices around the world.82 While Hertz originated around the time of the First World War, Avis started just after the Second World War. For long periods of time, these two companies were part of General Motors and Ford, before being taken over by investor groups.
In Europe, Auto Europe with 4,000 offices, Europcar with 3,000 offices dominate the West European car rental market.83 Both have revenues in 2007 of about $2 billion and both have offices around the world too. All car rental firms partner with many airlines, hotels, electronic payment systems, insurance companies, tour operators and travel agencies.
Intensified competition put pressure on all the car rental companies, while the cost of their growing number of cars also increased. The car rental industry is affected by the airline industry, because car rental often begins where planes land. The Internet also has radically affected the car rental business. On the one hand, the Internet is an important sales channel for car rental companies, but on the other hand it gives customers free access to compare prices. Furthermore, car rental companies increasingly become dependent on third parties, primarily web-based travel agencies. A special kind of third party and competition pressure is caused by HolidayAutos, a part of Sabre’s Travelocity.84 HolidayAutos is a car rental firm that does not own any cars but is a commissioner for the traveller. Through HolidayAutos one gets the best and cheapest offer. The consumer rents the car with HolidayAutos, which intermediates with the car rental firm, for example Europcar.
With the Internet, many new discount car rental companies have emerged that make competition even more intensive. Large capital requirements and logistics create high barriers for the potential growth of new companies, however, and the other links of the travel value chain also prefer international car rental firms. World wide the same companies continue to dominate the car rental business and are even consolidating the industry further, while leaving only small market shares for other firms.
Insurance
Globally, the insurance business is huge.85 Life, accidents, property, fire, health, etc. are all heavy insurance areas in which the insurance industry concentrates its activities. Worldwide consolidation has been on the march since the 1990s, driven by the diversification of major financial companies into adjacent industries. On the one hand, banks diversify into insurance through acquisitions and expansion. On the other hand, the traditional insurance companies strengthen their competitive positions by diversifying into banking. Among the independent insurance companies some continue to specialize in travel insurance, which remains a rather marginal field compared to the core areas of insurance.
Yet, consolidation has not broken completely through. It is growing, however, at national, regional and global levels. The large insurance companies that fuel consolidation are domiciled in the world’s three economic centers, the US (for example America International Group), Western Europe (for example Allianz and Zürich) and Japan (for example Nippon Life Insurance Company). While heavy insurance areas are still dominated by national companies, travel insurance is more of an international business moving towards regional and global consolidation.
In the US, World Access is one of the leading travel insurance companies, through its Access America division.86 World Access with $1.5 billion revenues in 2007 is part of Mondial Assistance Group, which is the result of a merger between a French and a Swiss insurance company.87 One of the leading international insurance companies, German Allianz, which is also a large shareholder in Mondial, has revenues in 2007 of almost $100 billion.88 Independent travel insurance companies in the US and in Europe still hold significant market shares however, the largest company being Austrian ‘Europäische Reiseversicherung’ with revenues of $2 billion in 2007.89 Second largest is Dutch Goudse Verzekering with revenues in 2007 at $1 billion. Europäische and Goudse originated in the early 20th century and expanded after the Second World War in Europe and since the 1990s worldwide. Western Europe remains its core market, however.
Even though insurance companies have established direct sales channels to consumers through the Internet, third parties, often being travel agencies, dominate insurance implementation. Insurance companies partner with several companies within travel, health care, etc.
Hospitality
The hospitality industry consists mainly of hotels and restaurants that provide accommodation and food to tourists. Hospitality is therefore an intimate part of the tourism sector and one of the cornerstones at destinations. Through decades, thousands of hotels and restaurants have worldwide serviced tourists in developed and increasingly emerging and developing countries. Currently, new technologies, globalization and changing consumer behavior are challenging hospitality companies that will have to improve competitiveness by branding, online communications, improved service and products, as well as increased productivity.90
Hotels
At destinations, hotels are the most common way of accommodation and hospitality. Less coomon are holiday homes and camping sites, although it differs much from country to country.91 In Denmark for example, many German and Scandinavian visitors rent holiday homes along the west coast.92 However in general terms, hotels dominate the global ‘hospitality’ industry. Since the Second World War, hotels have been a crucial force behind domestic and international American tourism. The American hotel industry quickly consolidated and the large US hotel chains continued their expansion abroad in Western Europe, Asia and Latin America, following in the footstep of American business. In Western Europe and even less in the rest of the world, a similar consolidation of hotels did not take place. Small and family-based hotels still dominate outside the US, except for the international American hotels. It was not until the 1990s and the breakthrough of globalization and expanding international