Berlin This message is likely to shock Germany’s package holidaymakers just in time for the start of the world’s largest tourism trade fair ITB this Tuesday: “The Mallorca holiday”, announced Juan Ferrer, a prominent tourism manager on the Spanish island, “will be 33 percent more expensive this year than last year. “This applies to restaurants as well as hotels and flights, he said at the weekend.
The Germans’ favorite island is by no means the only holiday destination that wants to get rid of cheap tourists. New Zealand’s Minister of Tourism, Stuart Nash, announced a few weeks ago that motorhome vacationers were not welcome in his country. Instead of the self-caterers “who only spend ten dollars a day on instant noodle soup”, he would like “financial tourists” as an alternative. Indonesia’s government is even considering imposing a backpacker travel ban on the island of Bali.
The motto “Open for Change”, which the holiday fair in Berlin adopted after a three-year break due to Corona, fits in with the trend that the global tourism industry has long embraced: Instead of making vacations in distant countries affordable for everyone , as pioneers such as Josef Neckermann or Club Med founders Gérald Blitz and Gilbert Trigano propagated in the 1950s and 1960s, travel is now increasingly becoming a domain for high earners after the pandemic.
Balcony instead of cruise
“The business is driven in particular by long-distance travel and cruises,” indirectly confirms Norbert Fiebig, President of the German Travel Association (DRV), at the start of the ITB. What the head of the association fails to mention is that the rapidly rising price level in the industry means that fewer and fewer Germans are still traveling at all.
The gap between high earners who spend their luxury holidays in the Maldives or Dubai and Germans who can only afford holidays on their own balcony is widening.
The figures from the TATS travel agency index, which records the sales developments in German agencies on a monthly basis, are particularly alarming. For the important booking month of January, the billed sales were only down 15.2 percent compared to 2019. However, the successful race to catch up came about solely through the rapid increase in holiday prices. The number of bookings was still down 46.2 percent.
The effects of the price increase are most striking in the airline business. Although 26.1 percent fewer customers booked a single flight through a travel agency than before the pandemic, airlines easily coped with the slump thanks to the increased willingness of their remaining customers to pay. In the end, the drop in sales due to the price increases was only 2.3 percent.
Away from the travel agencies – namely on the Internet – the situation is hardly better. Ryanair boss Michael O’Leary recently declared the era of ten-euro flight tickets officially over in an interview with the BBC radio station. “The low prices at the lower end of the market will not exist for the next few years,” he said. The cheap tickets of the low-cost airlines had triggered a significant travel boom in recent years. This threatens a veritable damper.
A quarter definitely lacks the money
Even if association representatives like DRV President Fiebig never tire of raving about a “pent-up desire to travel” and about Germans “sitting on packed suitcases”, the reduced real income is slowing down the booking business for many. Only every second consumer (54 percent) stated in a recent survey by the research association Holiday and Travel (FUR) that they had enough money for a holiday trip this year. A quarter (23 percent) say they definitely want to stay at home because the household budget is empty.
The “Tourism Analysis 2023” by the BAT Foundation shows how wide the gap is between German consumers. According to their data, Germans who could afford it spent an average of 1,350 euros on their main vacation last year – 250 euros more than in the previous year. Not only were vacations extended by an average of almost two days, the daily budget also rose from 98 to 106 euros. At the same time, only 58 percent of Germans booked a vacation trip lasting more than five days, as determined by the Foundation for Future Questions. In 2019 it was still 61 percent.
Instead, holiday destinations and some tour operators are swarming with so-called “digital nomads”, well-paid IT experts not only from Silicon Valley who are relocating their home offices to work in more climate-friendly regions. Charuta Fadnis, analyst at US tourism market research Focuswright, calls the relaxing mix of work and vacation “hybrid work”. For this reason, tropical holiday paradises such as the Fiji island or Montserrat in the Caribbean have long been attracting well-heeled prospective buyers with long-term visas.
Above-average prices in Germany
However, it is not clear whether the new price strategy will work out for the industry as a whole. Because the business remains tough even for organizers. Bookings are made at much shorter notice than before the pandemic. The order backlog by the end of the season, which runs until October 2023, was down by a quarter compared to 2019. In particular, the sector still has catching up to do on the weak booking months of November and December 2022, which were a good third below the values of 2019.
This also applies to the domestic holiday market, which is still the most important holiday destination for Germans with a share of 41 percent, but has lost guests compared to previous years. After several lockdowns, which caused revenue to dry up for months, many hoteliers in Germany between Rügen and the Bavarian Forest drastically increased their prices.
With average prices of 112 euros per day and person, according to a BAT representative survey of 3000 travelers, Germany is now at the level of a long-distance trip. Except for Scandinavia and Greece, vacations all over Europe were cheaper than Germany.
41 percent of Germans spend their annual vacation in their home country.
(Photo: dpa)
It remains to be seen whether one can do without the less affluent guests in the long term. With 451 million overnight stays, the domestic accommodation establishments in 2022 remained more than nine percent below the level of 2019.
In December, the industry even recorded a minus of more than eleven percent compared to the last year before Corona. The proportion of foreign guests in 2022 was 15.1 percent, three percentage points behind the record year 2019.
The winners were holiday destinations that still scored well in 2022 with below-average daily costs: Spain led the way with a market share of 8.2 percent, followed by Italy (6.5 percent) and Turkey (5.3 percent). The price-breaker Turkey, however, is likely to be canceled for some in the current holiday year. “Up until the earthquake, the Turkish Aegean and Riviera were among the favorites of vacationers,” reports FTI boss Ralph Schiller. “Since the accident, demand has been somewhat more restrained.”
Long-distance travel in demand as rarely
On the other hand, those who can afford it tend towards luxury. The number of long-distance trips has doubled compared to the sluggish previous year – and according to the Munich tour operator FTI, is continuing to grow rapidly. “Compared to the previous year, long-distance routes are showing high double-digit percentage growth for us,” it says. With a total share of 13 percent, the German Tourism Analysis recorded the third highest value for long-distance travel since reunification in 2022.
The USA in particular is experiencing a real rush of visitors, which had already lost a considerable number of holiday guests from Germany before Corona. According to the BAT study, they occupied a top position among long-haul travel destinations in 2022. And the prospects for this year also seem dazzling. The US federal government speaks of a sharp increase and expects 1.78 million visitors from Germany alone this year – around 300,000 more than in 2022.
A few days ago, the special tour operator America Unlimited reported a booking increase of around 30 percent compared to 2022. Sales with trips to North America had even increased by 75 percent, reported Managing Director Timo Kohlenberg. According to the organizer, the average price of a trip there in 2022 was 8,500 euros. In 2023 it should be an impressive 11,000 euros.
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