Market Update – March 17, 2022

Market Update – March 17, 2022

Market Update – March 17, 2022 820 312 fame creative lab

Please note: The following information has been compiled from the most important German speaking Trade Media.

Short Overview Situation in Germany

  • Even though the infection numbers are on the rise again, the occupancy situation in hospitals is relaxed. About 75,5 % of the German population are now fully vaccinated.
  • The opening measures announced for March 20 will keep in place until April 2 in most regions of Germany due to the rising numbers.
  • As of March 3, 2022, the RKI announced that all states and regions are no longer high-risk areas. This brings relief especially to the unvaccinated and families with unvaccinated children when returning to Germany. The classification as a high-risk area is now only for those areas where there is a high incidence in terms of the spread of variants with higher virulence, i.e., disease-causing properties, compared to the omicron variant.


Current developments & influences of the Ukraine war on the industry                

Hard to bear and sad pictures from Ukraine still paralyze the world in these days and weeks. Russia’s war of aggression in violation of international law has triggered a wave of solidarity and Russia is facing more and more restrictive measures – this also has a significant impact on the world of travel. We have summarized the latest events and developments for you.

An inquiry of the portal Counter-vor9, in which approximately 500 professionals from the travel selling took part, shows that since the outbreak of war the Federal citizens became more hesitant in their travel reservations. Uncertainties cloud the travel desire. Around 48 percent of respondents said that bookings had slumped for them. A further 46 percent recorded slight declines in bookings. Only six percent are registering a further increase in demand. In addition, the war influences the choice of destination. According to most participants, customers are currently avoiding destinations in the wider area of the conflict. In addition to the Baltic states, this applies above all to Bulgaria. It is unclear how strongly the war is affecting bookings for Turkey, for example. While some commentators note that, in addition to Bulgaria, the Turkey business is also affected, others report continued strong bookings for Turkish vacation regions.

Travel Inside, for its part, also confirms this picture of German and Swiss travel reluctance with an online survey – just under 73 percent of survey participants report a slump in sales and that a certain reluctance on the part of customers is noticeable. The uncertainty clouds not only the travel desire but leads already to cancellations and travel refusals, report 15% of the answering. Only 12% of the survey participants do not yet notice any uncertainty among their customers. Their customers still want to go on vacation.

A sharp decline can also be observed in Eastern European air traffic. Apart from Ukraine and Moldova, which have closed their airspace, and Russia, which is no longer served, the impact is severe for neighboring countries and beyond.

The countries most affected are Bulgaria, Estonia, Georgia, Croatia, Latvia, Lithuania, Poland, Slovakia, Slovenia, and Hungary. Here, the drop in bookings was between 30 and 50 percent.


Current major topics within the tourism industry in Germany                              

  • Germany focuses on nature and cultural tourism: The German National Tourist Board (GNTB) has given last year’s marketing campaign a lift. With its new edition of the inspirational campaign German.Local.Culture. the restart in incoming tourism is to be driven forward. Against the backdrop of the pandemic and recent events, the tourism industry is facing major challenges, and the campaign is intended to set an example for friendly tourism that brings people together and conveys cosmopolitanism and tolerance. The campaign stands for this peaceful coexistence of generations, traditions, and different cultural influences. German.Local.Culture. will be played out digitally as a cross-media inspiration campaign according to the social-first principle in important source markets for German incoming tourism. The campaign will be promoted with a wide reach via programmatic advertising, social media channels and influencer measures. Events for end customers in various source markets will convey an authentic image of Germany as a travel destination. Read the Article


  • Travel agencies do not yet feel Ukraine effect: However, the war in Eastern Europe does not yet seem to be having a short-term impact on travel sales. At least, that is what the sales climate index compiled by Fried & Partner suggests. At present, 35.8 percent of travel agencies describe the current situation in the sale of travel services as good, an increase of almost nine percentage points compared with mid-February. 46.2 percent of the agencies consider travel sales to be satisfactory (February: 50 percent), while only 17.9 percent of the agencies describe travel sales as poor – in the previous month, this figure was still 23.1 percent. Looking ahead, however, travel agencies are no longer quite as confident as they were in February: Whereas 79 percent still expected demand for travel to rise, the figure is now only 69.4 percent. Nevertheless, the current overall positive climate in sales has not changed. Fried & Partner’s index currently reaches a value of 131.6 points, once again better than in February and the best value since the index was launched in January 2016. Read the Article


  • Booking behavior requires rethinking: The pandemic has permanently changed the travel behavior of Germans. This is the conclusion of the new TRAVEL COMPASS 2022 by management consultants Dr. Fried & Partner and PayPal. The study examines the changes in booking and payment behavior in the German leisure travel market and shows what opportunities this presents for the tourism industry. The following core results emerged from the study: the frequently changing travel conditions lead to an above-average share of short-term vacation travel bookings. For tour operators, this preference requires a high degree of flexibility to manage destinations and capacities with shorter lead times. In addition, the increased need for security and flexibility, as well as the tendency to book at shorter notice and more online, have the potential to have a lasting impact on the travel industry. This development may require adjustments in the business model of tour operators in terms of pricing, payment flows and process agility. The end customer survey shows that PayPal has also established itself as a payment method in the travel market: When vacation trips are booked online, PayPal is used more frequently than average as a means of payment. According to the assessment of the industry experts, the pressure to actively offer secure payment methods such as PayPal has grown due to the pandemic. Secure (69 percent), simple (68 percent) and trustworthy (66 percent) – These criteria are key factors for end customers when choosing a payment method. The customer experience influences the purchase decision: the lower the hurdles, the higher the willingness to book and pay. If the payment process is convenient and no payment data must be entered, this leads to a low dropout rate. With the current market development, the relevance of online payment services is increasing. These offer advantages and opportunities for the tourism industry: for example, higher conversions, the development of new target groups, the reduction of effort and costs for accounting, and a low risk of non-payment. Read the Article


Current major topics within the aviation industry in Germany                              

  • Many flight cancellations: New warning strikes at German airports: No passenger screening, no flights: Since the beginning of the week, cargo and passenger screening staff have been on strike. The two largest German airports, Frankfurt and Munich, are also affected by the strikes. There are also work stoppages in Hamburg, Stuttgart and Karlsruhe/Baden-Baden. Among others, Berlin, Düsseldorf, Cologne/Bonn, Hanover, Leipzig/Halle and Bremen airports were affected. The warning strikes are part of the wage dispute between the Ver.di trade union and the German Federal Association of Aviation Security Companies (BDLS). The union is negotiating a new collective agreement with the employers‘ association for around 25,000 security staff nationwide, and three rounds of negotiations have so far failed to produce a result. Read the Article


  • Fraport experiences upswing with fear for the future: In the pre-crisis year 2019, the airports in which Fraport holds a stake of at least 50 percent were still able to handle 182 million passengers. But such traffic figures remain a pipe dream for 2022. At the most important site, the home airport in Frankfurt, traffic did increase by 211.3 percent year-on-year in February 2022 to 2.1 million passengers handled. But that is still 53.4 percent less than in the pre-crisis month of February 2019. At least tourist traffic picked up in February 2022 due to the elimination of „individual travel restrictions.“ In addition, cargo business continues to perform better than before the pandemic began. In February, 164,769 tons of cargo were handled in Frankfurt, 2.1 percent more than 36 months earlier. The Bulgarian airports, in which Fraport holds a 60 percent stake, are likely to cause concern for Fraport’s management. Vacation bookings in Bulgaria are currently more or less at a standstill due to the Ukraine invasion. In February, Varna handled 37,622 passengers and Burgas 7266. Admittedly, this is also more than 100 percent more than in the same month last year. But the prospects are frightening. The outlook is even bleaker, however, for Pulkovo Airport in St. Petersburg. Fraport still held a 25 percent stake in this airport in February. One million passengers were handled there. Read the Article


  • How Lufthansa is dealing with skyrocketing kerosene prices: Kerosene prices are shooting through the roof. The Russian war of aggression on Ukraine caused the spot price to shoot up by more than a third to over 1,200 US dollars per ton within two weeks. According to data from the International Air Transport Association (IATA), kerosene is currently more than twice as expensive as it was in March 2021. Lufthansa has taken precautions – the Group generally hedges kerosene prices in full or in part for 24 months. For the current quarter, the hedging ratio is 74 percent and for the full year, 63 percent of the requirement has been hedged at a break-even price of 74 U.S. dollars per barrel, i.e. significantly below the current price level. Looking ahead to 2023, Lufthansa has already secured 20 percent of its calculated kerosene requirements. The Group bundles costs for fuel, air traffic control and airport charges that cannot be influenced into an „international surcharge,“ which Lufthansa can use to pass on part of the increases to the ticket price. Read the Article


Destination news                                                                                            


  • Bulgaria’s tourism faces difficult season: Bulgaria’s tourism is facing new challenges as a result of the Ukraine war. Instead of vacation guests, Bulgarian hotels on the Black Sea coast are now welcoming war refugees. According to media reports, there are no new bookings from foreign vacationers after the Ukraine invasion. Before the Corona pandemic, its share of gross domestic product (GDP) was still a good 13 percent.
  • Slovenia: Diverse as ever: In order to present Slovenia as a local destination with its strong potential, the Slovenian Tourist Office organized a workshop in Vienna, where around 40 agents were able to get ideas on the diverse tourist offer from 20 partners. The focus here is primarily on proximity, sustainability and compliance with the destination’s safety measures.
  • Saudi Arabia: Now, visitors to Saudi Arabia no longer must present proof of vaccination or negative PCR tests when entering the country. Quarantine requirements would be lifted completely. Even visitors from countries currently on the red list would be allowed to enter the country again.
  • Aruba: As of March 19, 2022, proof of vaccination or testing will no longer be required for entry. The online entry card must still be completed.
  • Seychelles: Effective immediately, PCR testing is no longer required for fully vaccinated or recently infected visitor.
  • South Korea: The prerequisite for being allowed to enter the country without the need for isolation is complete vaccination. Persons are considered to be fully protected if the second vaccination took place at least 14 days and a maximum of 180 days ago. Alternatively, the booster vaccination is recognized as sufficient protection.
  • Philippines: As of April 1, there will no longer be a limit on the number of international passengers arriving at all ports of entry in the country. In addition, instead of the originally required PCR test, the Philippines now alternatively allows the submission of a negative laboratory-based antigen test performed within 24 hours of departure.
  • Namibia & Kenya: Fully vaccinated travelers no longer need negative proof of testing for entry.
  • New Zealand: Foreigners are to be allowed to travel to New Zealand again as early as May 1. Originally, this step was not planned until July.
  • UK: The government will remove the remaining COVID-19 international travel restrictions for all passengers from Friday 18 March.


Just read on and enjoy! And if you have any doubt, or would like to talk to us about how to approach these markets better, just get in touch with us. We’ll be delighted to help you.