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German travel market 2015: Further growing and boom in long-haul travel

Tour operators: Exotic destinations and Mediterranean countries experience boom.

As the balance of the 2015 travel year is drawn, it becomes clear that many holiday makers travelled long distances. This year, exotic destinations were in high demand with German travellers. The number of long-haul travellers rose to more than five and half million – a high double-digit increase, bringing the proportion of long-haul destinations in the overall tourism market from 7.6 to almost eight percent.

According to early estimates regarding tourism year 2014/15 (as of October 31), tour operators’ sales revenues were up between three and four percent. Sales revenues generated by tour operators thereby increased by approx. one billion euros to a total of now more than 27 billion euros. And also the number of travellers on organized tours has again slightly risen –  by almost one percent. “This shows a continuing high demand for travel organized by tour operators”, said Norbert Fiebig, President of the German Travel Association (DRV), at this year’s DRV’s Annual Convention in Lisbon.

“The German travel industry is looking back on a very satisfactory year, even if political situations in some destinations were difficult and the high US Dollar exchange rate posed major challenges to the industry”, concluded DRV President Fiebig. It was, however, the early hedging against exchange risks of the US Dollar in relation to the euro in buying hotel and flight contingents for long-haul travel that both customers and operators benefited from.

Here are the trends for the 2015 travel year at a glance, as analysed by the German market research company GfK:

  • Caribbean destinations, in particular Cuba with a jump in sales revenue of 25 percent, as well as the Dominican Republic and Mexico are among the winners. The United Arab Emirates are showing a significant increase of 15 percent and the USA of 11 percent. Germans are also more attracted by Asian destinations than in the previous year, which is reflected by an increase in sales revenues generated especially in Thailand.  A major reason why exotic holiday destinations are booming were favourable package travel prices. Tour operators benefited from early hedging their purchases of hotel and flight contingents against exchange rate fluctuations.
  • Numerous traditional destinations around the Mediterranean also recorded increases. Strong increases in sales revenues were recorded by Portugal with a plus of 14 percent and Turkey with an increase of 4 percent. Egypt is recording double-digit increases and the Balearic Islands’ plus is in the single-digit range. The country on the Nile is posting a substantial growth in the medium double-digit range, even if visitor numbers have not yet reached again the figure of 1.3 million guests that was reached before the Arab Spring. Greece is performing well with figures reaching again the record level of 2014.
  • Less visitors than in the previous season were counted in Tunisia, the Canary Islands and the countries of sub-Saharan Africa. Southern Africa is, however, slowly recovering from the effects of the Ebola epidemic mainly responsible for these declines.
  • On previous year’s level is the performance of destinations that can be reached by car, train or bus.  German destinations are still in high demand with slight growth rates, while neighbouring countries are recording a slight decline. Trips to various European cities remain popular.

The high demand for exotic dream destinations resulted in tour operator sales increases of five percent compared with last year. Medium-haul destinations, predominantly in the countries around the Mediterranean, are recording a growth in sales revenues by 3 percent. Turnover in the segment of the so-called earthbound destinations to be reached by train, bus or car remains constant. Cruises posted again substantial gains: According to early projections by the DRV Committee Statistics and Market Research, tour operators are expected to have generated in 2015 a high single-digit growth in sales in the sea and river cruise segment.

The proportion of the total cruise business, including access and return travel, in tour operator sales has risen to about 13 percent. This means, cruises account for three billion out of the total sales of 27 billion euros, with an upward trend. If one looks at the last two decades, it is plain to see that the cruise segment has experienced a strong and steady growth. “The German sea cruise market is the fastest growing tourism market with above-average annual growth rates,” said DRV President Fiebig.

When presenting the figures and trends for 2015, President Fiebig emphasized that it was more and more difficult to predict developments and demand in tourism.  In recent times, some destinations reported ups and downs in visitor numbers comparable to a roller coaster ride. Political upheavals, natural catastrophes, the Arab Spring or terrorist attacks are having an impact on the demand for a specific destination.  Take for instance Tunisia and Egypt that have reported substantial fluctuations in the number of visitors over the last five years. The fluctuating demand caused by external factors makes it more difficult for tour operators to plan and purchase flight and hotel contingents.

Outlook on the winter season 2015/16 and for 2016
Bookings for the winter season 2015/16 have started off well. At the moment, the growth in sales revenues compared with last year is in the medium single-digit percentage range. Besides the beach destinations in warm climes, city and wellness trips as well as cruises continue to be popular. While tour operators are presenting their programmes for the summer season, it is currently too early to give a reliable forecast for the year 2016 as data are not yet sufficient. As in recent years, no significant changes are expected as to the ranking of Mediterranean countries among the most popular destinations for summer holidays.

Travel agency market further growing
High-street travel agencies in Germany remain on the growth path: This year, sales revenues of the almost 9,900 German travel agencies were up by about three percent. Growth was driven by bookings of cruises and package tours organized by tour operators. With sales amounting to almost 24 billion euros, last year’s record figure was again significantly exceeded. At its Annual Convention in Lisbon the DRV published this estimated figure for the calendar year 2015 that has not yet ended.

There was a drop in individual bookings of air and rail tickets in travel agencies so that agencies focussing on package tours performed better than classic agencies with a high percentage of air and rail travel. The agencies specializing in package tours have witnessed in particular a thriving cruise business. As the very fast growing range of choices in the cruise segment requires intensive consultancy, travel agencies can here exploit their trump cards of qualified and individual advice and special product knowledge. Agencies are acting as brokers for about 80 percent of cruises. “Travel agencies are and will remain the most important distribution channel for cruises,” emphasized DRV President Norbert Fiebig when presenting the preliminary economic results.

Business travel agencies also witnessed a positive development, with sales revenues growing between 2 and 2.5 percent. Unlike the tourism business, the business travel segment cannot do without air and rail ticket sales.  We see no decline here.

Online travel agencies, i.e. portals with a comprehensive neutral product range, saw their percentage growth levelling off with that of high-street distribution channels.  In 2015, the growth rate has been just under three percent, thereby slackening for the second time in a row.

An interesting trend from last year has continued in 2015: Bookings of high-end holidays have again recorded significant growth. According to analyses carried out by the market research company GfK, sales of high-end products at prices of more than 2,500 euros per person are growing considerably, at a rate of almost eight percent this year. The GfK also found out that less vacationers have booked their holidays at the last minute. Last minute bookings were down by nine percent.

It is very gratifying to see a continued renaissance of travel agencies. “This goes to show that consumers attach great importance to qualified and individual advice”, said DRV President Fiebig. The number of travel agencies has grown for the second time in a row. About 100 new agencies were set up in 2014. This year has seen the opening of about another 65 high-street and business travel agencies, bringing the total number to almost 9.900.

News Editor - TravelDailyNews Media Network | + Posts

Tatiana is the news coordinator for TravelDailyNews Media Network (traveldailynews.gr, traveldailynews.com and traveldailynews.asia). Her role includes monitoring the hundreds of news sources of TravelDailyNews Media Network and skimming the most important according to our strategy.

She holds a Bachelor's degree in Communication & Mass Media from Panteion University of Political & Social Studies of Athens and she has been editor and editor-in-chief in various economic magazines and newspapers.

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