Market Update – February 23, 2023

Market Update – February 23, 2023

Market Update – February 23, 2023 6912 3456 fame creative lab
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Please note: the following information has been compiled from the most important German-speaking Trade Media.


Current major topics within the tourism industry in the DACH region

  • Travel & Tourism Sector in Key European Capitals Strongly Recovering: A new report from the World Travel & Tourism Council (WTTC) has revealed strong signs of recovery of the economic impact from Travel & Tourism in the five city ‘powerhouses’ of Western Europe. The Cities Economic Impact Report, sponsored by Visa and researched in partnership with Oxford Economics, analyzed key indicators such as Travel & Tourism’s contribution to GDP, employment and traveller spend. The study examined the impact of the sector in London, Paris, Berlin, Rome, and Madrid. The report from the global tourism body shows that in 2019, the Travel & Tourism sector contributed over $83.5BN to the economies of the five European capitals, and last year was just 15% below 2019 at almost $71BN. Paris has shown the strongest recovery of the five capital cities with the other four being 18% to 30% below 2019, demonstrating slightly slower recoveries than the French capital. In Paris, the sector GDP contribution was $38BN in 2019 but in 2022 it recovered to just 6% below pre-pandemic levels at an estimated $35.7BN. Although the sector’s GDP contribution to London was worth almost $15BN in 2022, it is slightly behind Berlin in terms of recovery to 2019 levels. The German capital’s contribution to the city’s economy was worth over $7.7BN in 2022, 18% below 2019. Madrid’s GDP contribution was more than $5.5BN in 2022, 24% below 2019, however Rome is witnessing the slowest recovery – 30% below 2019 levels with a sector contribution of al-most $7BN. Read more 

  • Europeans plan winter vacations despite financial pressure: Allianz Partners publishes the results of the 3rd „International Travel Confidence Index“. A total of 9,337 people were surveyed in Switzerland and other countries such as Austria, France, Germany, Italy, the Netherlands, Poland, Spain and the UK. Almost two-thirds (63 percent) of people in the nine European countries are planning a vacation trip of three days or more between January and March, either at home or abroad. Travel confidence in Europe is correspondingly high this winter. Despite rising financial pressures, driven by inflation in Europe, just over a quarter (23 percent) of respondents plan to take a vacation abroad in the first three months of 2023. Of those planning vacations abroad this winter, 72 percent are choosing destinations within Europe. Despite increased headlines regarding the rising cost of living, financial concerns play only a minor role in travel decisions. On average, the Swiss expect to spend CHF 2,673 per household, putting them clearly in top position in a European comparison. The three most important reasons for a vacation this winter are: relaxation, time with loved ones and nature. Almost every:r second Swiss:in (44 percent) says they want to relax. A third (36 percent) plan to enjoy nature in the countryside or mountains or spend time with loved ones (29 percent). Read more


  • Reservation rally in travel agencies continues in February: Of a good business situation speak 77.7 per cent of the travel agencies (January: 55.3 per cent), 2.7 per cent judge with „badly“ (January: 8.5 per cent), and the evaluation „satisfactorily“ call scarcely 19.6 per cent, which means a decrease in relation to January of 16.6 points. Expectations have also improved. 60.7 percent expect demand to increase in the next six months (January: 41.1 percent). Only 33.9 percent expect stagnation (January: 45.3 percent). That demand will decline is expected by 5.4 percent (January: 13.7 percent). The positive expectations are also reflected in the assessments of the earnings situation over the next six months. According to 69.4% of respondents, earnings will improve, 22.6 percentage points more than in January. A steady level of earnings is now expected by 25.2 percent (January: 38.3 percent), while 5.4 percent (January: 14.9 percent) expect the situation to deteriorate. Read more


  • Deals in the travel industry are on the decline: Mergers and acquisitions, venture financing and private equity transactions in the travel industry are declining noticeably. These types of deals decreased by 42.4 percent globally in January 2023 compared to December 2022. There were 38 such deals in total. This is according to an analysis by Global Data. According to Aurojyoti Bose, lead analyst at Global Data, the decisive factor for the decline is „the current geopolitical tensions and recession fears“ that are affecting national economies, and thus also the travel industry. An analysis of Global Data’s Financial Deals Database found that key markets in particular, such as the U.S., U.K., China, Australia and Japan, saw a month-on-month decline in deal volume in January 2023. Read more


  • Wetterheld policy pays per rainy vacation day: The vacation accommodation is booked, the suitcases are unpacked – but it’s raining. Especially for families with children, bad weather on vacation is a big nuisance. The insurance start-up Wetterheld now offers financial consolation in this case: The Hamburg-based company has developed a vacation rain insurance. It automatically pays travelers 100 euros per rainy vacation day. The insurance can currently only be booked for destinations in the European Union (EU). In the course of the year, other destinations are to be added. Wetterheld offers the policy to consumers on its website, but plans to cooperate primarily with tour operators and agencies in sales, explains Wetterheld co-founder and CEO Nikolaus Haufler. Read more


Current topics within the transportation industry in Germany & Europe  

  • Air France-KLM posts profit after Corona slump: Despite rising fuel prices and other increased expenses, the French airline earned 728 million euros on the bottom line in the past fiscal year, according to the French-Dutch company. Other airlines also recovered in 2022 after the end of the Corona measures in many countries. Air France-KLM ramped up capacity again, carrying more than 83 million passengers. That was an 87 percent increase. Revenues climbed 84.4 percent to nearly 26.4 billion euros. In the final quarter of 2022, Air France-KLM also said it achieved the highest quarterly revenue in the company’s history. The Group is confident about the year that has just begun and intends to return to full utilization of its entire fleet. Read more


  • Lufthansa is already canceling many flights in the summer: „Lufthansa has adjusted the 2023 summer flight schedule from Frankfurt and Munich,“ Wirtschaftswoche quotes a Lufthansa spokesperson. The airline group would not comment on the figure of 34,000 flights. The scope cannot be determined without further ado, as further daily cancellations could be added. Lufthansa mainly wants to cut flights on routes that are offered several times a day and for which it can offer a substitute. The fact that there are currently hefty flight cancellations for the summer half-year is also confirmed by Lufthansa CEO Harry Hohmeister in an interview with the trade journal FVW. „We are designing our flight schedules more flexibly today than in the past, so there are always adjustments,“ he said. He added: „Last year, many problems only became apparent at very short notice. Now we adjusted the summer flight schedule early on to stabilize the system – especially in Frankfurt – and are constantly reviewing the current planning.“ Read more


  • Long-distance travel flying blind: The Roland Berger study „Destination unknown: The future of long-distance travel“ shows that demand for long-distance travel has recovered significantly over the past year and a half, but is still below pre-pandemic levels. This is not expected to be reached in 2023 either, it says. On the one hand, significantly more people are traveling again – mainly due to catch-up effects – while at the same time, according to the study, the number of respondents who state that they intend to travel less in the future is increasing compared with 2021. In addition to the increased use of online communication, ecological concerns are also increasingly being cited as a reason. For the study, the experts conducted market analyses and a large-scale survey with around 7,000 consumers in seven countries. Compared with results of the previous study from 2021 and a pre-Covid index from 2019, there are clear changes. In the U.S., for example, demand for flights increased to 87% of pre-Covid levels in the first half of 2022 (18 percentage points higher than in 2021). Air traffic also recovered in Europe, despite the Ukraine war and economic challenges. By the first half of 2022, demand was already back to 60-80% of pre-pandemic levels, up from 20-40% in 2021. Similarly, European rail traffic recovered to around 75% of pre-Covid levels. In China, however, demand for air travel fell to just 32% of pre-pandemic levels in the first half of 2022, down from 74% in 2021, due to Covid restrictions. Demand for rail travel also fell by 37% from 2021 to 2022. Overall demand for long-haul travel is expected to remain below pre-Covid levels in the coming year. That’s what the study authors conclude from the global consumer survey. In all focus markets, respondents are planning significantly less travel than before the pandemic. For example, the number of expected business trips fell 28% compared to 2019 (5 percentage points lower than the 2021 survey). For planned personal travel, the decline was 19% (2021: 18%). Consumer reluctance to travel long distances is particularly evident: The number of planned intercontinental business trips fell to 42% of pre-Covid levels (down 22 percentage points from 2021). The main reason for the change in mobility behavior is the increased use of online communication, both for business travel (cited by 61% of respondents) and for personal travel (40%). This is followed, in the case of business travel, by changes in travel policies (43%), new legal requirements (38%) and, increasingly, environmental reasons (37%; +8 vs. 2021). In the case of private travel, legal regulations, financial and ecological reasons are in second place with 36% each. Read more


  • How Schiphol Airport wants to prevent new chaos: In 2022, passenger numbers at Amsterdam Schiphol Airport were 52.5 million, down by around a quarter on 2019, yet chaos often reigned at the Netherlands‘ largest airport and key transfer airport for long-haul flights due to a lack of staff. For 2023, the airport is now vowing to do better and recruit more security staff. About 600 people have signed contracts and the airport expects to start about 200 more employees by the end of April, when the peak travel season begins in the Netherlands. From the end of April, the airport expects 70,000 to 75,000 departing passengers per day, up from about 40,000 in the same period last year. The 2022 financial results statement for Royal Schiphol Group, which also includes Eindhoven and Rotterdam The Hague airports, shows an adjusted loss of EUR28 million despite a strong recovery in traffic: In 2021, the group had generated an adjusted loss of EUR 287 million. The aim now is to reduce this loss again in the coming years. Read more


Destination news

  • Bolivia: In the southern part of Bolivia, there are an unusually high number of dengue fever cases. So far, at least 26 people have died from it. Hospitals are reaching the limits of their capacity.
  • China: Chinese city break destinations are on the rise. The Chinese capital Beijing is set to replace Paris as the world’s most important travel and tourism city in the next decade.
  • Cuba: Cuba received 1.6 million visitors last year, just 38 percent of the 4.3 million guests who came in 2019. By contrast, the neighboring Dominican Republic had 7.2 million visitors, eleven percent more than in 2019. Bottlenecks in supplies and supply chains are adding to Cuba’s tourism industry woes.
  • Dubai: Dubai is planning a mega project for cyclists: A 93-kilometer highway is to connect the approximately three million inhabitants. According to the planning team, the air-conditioned loop will be completely CO2-neutral thanks to the latest technologies and will accompany the desert metropolis into an environmentally friendly future. Thanks to the project, all places of daily need will be accessible by bicycle within 20 minutes in the future. The mega project is scheduled to open in 2040 at the latest.
  • Egypt: The country is currently one of the most sought-after destinations in the winter and summer seasons, TUI reports, offering 400 hotels there for the winter. The country’s recipe for success is made up of a good price-performance ratio, the sunshine guarantee and a large all-inclusive offer. And vacation without extra costs is currently in demand as never before, which is also reflected in the booking figures for Egypt, according to several tour operators. The country now wants to draw more benefit from these strengths. Thus, the Ministry of Tourism wants to achieve that from 2028 onwards 30 million tourists annually come to the country, according to the responsible minister Ahmed Issa recently. By comparison, some 13 million vacationers had visited Egypt in the pre-Corona year of 2019, including several million from Germany. Issa added that the government will launch a national strategy for tourism in the first quarter of 2023. The country can then expect tourism revenues to rise sharply. The International Monetary Fund expects revenues of the equivalent of 24.7 billion euros in 2026/27 – up from 10.5 billion euros in 2022/23.
  • Greece: Greece expects tourism to grow by over 20 percent in the current year. This was stated by Greek Tourism Minister Vassilis Kikilias at an event on the island of Rhodes. Rhodes plays a prominent role in Greece tourism, which is why the island is paraphrased by Kikilias as the „flagship of tourism.“ In 2022, 26.4 million tourists visited Greece. Most visitors to Greece in the second half of the last tourist season came from the United Kingdom, Italy, Germany, France, Switzerland, the Netherlands, Poland, Cyprus and Israel.
  • Israel: The Israeli Ministry of Tourism is working hard to increase tourist arrivals step by step. To this end, the ministry is now spending the equivalent of 89 million euros to improve the domestic tourist infrastructure. Among other things, the money is to be used to expand beach promenades, build new lookout towers, hiking trails, visitor centers and tourist signposts, and improve transport links. In 2022, about 2.7 million foreign tourists visited Israel, reports „i24 News.“ In the pre-Corona year, that number was about 4.5 million foreign tourists. Incoming tourism revenue amounted to the equivalent of nearly 3.6 billion euros. In the pre-Corona year 2019, however, this figure was still 6.2 billion euros. 
  • Nepal: The Nepalese Civil Aviation Authority has stopped all flights of the regional airline. The airline has payment problems with employees and suppliers, it says. The airline had started in 2021; its fleet consists of four British Aerospace Jetstream 41s.
  • Peru: After weeks of closure due to violent protests against the government, the Inca ruined city of Machu Picchu in Peru is now open again.
  • South Africa: Johannesburg’s travel and tourism sector value added in 2022 has surpassed pre-pandemic levels. The Cities Economic Impact Report shows that Johannesburg’s travel and tourism sector is worth USD 2.2 billion in 2022, 4% more than the USD 2.1 billion measured by the World Travel and Tourism Council (WTTC) in 2019. Tourism in Cape Town has recovered less well so far. Here, value added in 2022 is only USD 1.8 billion, which is still 28% below the USD 2.5 billion of 2019. The report, prepared in collaboration with Oxford Economics, analyzed key indicators such as the direct contribution of travel and tourism to GDP, employment and traveler spending. According to WTTC research, the annual contribution of the travel and tourism sector in both cities will increase by more than USD 2.25 billion over the next decade. By 2032, Cape Town aims to reach USD 3.3 billion, and Johannesburg just under USD 3 billion.
  • Spain: The Spanish Institute of Statistics (INE) publishes the Tourism Balance of the Balearic Islands 2022, according to which the year 2022 was the best in history for the tourism economy of the Balearic Islands. In total, around 16.47 moa. visitors visited the Balearic Islands in 2022. Guests visited the Balearic Islands, of which 13.2 million guests arrived from abroad. This is similar to the figures for 2019. 17.3 billion euros were generated in the Balearic Islands with this number of guests. Euros, of which 15.2 billion with guests from abroad. On average, visitors spent 1051 euros. This is 4% more than in the boom year 2019.
  • Thailand: Thousands of people flocked to northern Thailand on Valentine’s Day to witness the opening of a spectacular tourist attraction. At Wat Saeng Kaew Phothiyan in the major city of Chiang Rai, the three-story glass skywalk „Pha Ngao“ was inaugurated. At a height of 25 meters, visitors can look down on both the spectacular statue of Maitreya Buddha and the Golden Triangle of Laos, Myanmar and Thailand.

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