Market Update - 01.08.24

CURRENT MAJOR TOPICS WITH THE TOURISM INDUSTRY IN THE DACH REGION

• DERTOUR RECORDED 22% MORE BOOKINGS FOR SUMMER HOLIDAYS COMPARED TO THE PREVIOUS YEAR: This increase is attributed to the increased desire to travel and the insolvency of tour operator FTI. Beach holidays in Greece, Turkey, Egypt, Majorca and the Canary Islands are particularly popular. Long-haul destinations such as Dubai, Thailand, the Maldives, Mauritius and North America are also very popular. The United Arab Emirates recorded the highest growth at 96%. Moderate price increases and longer lead times for bookings have also contributed to the strong demand. Read more

• HOW THE GEN-Z TRAVELS: Generation Z (18-25 years old) travels differently to their parents: shorter, more frequent and often on a smaller budget. According to the Simon-Kucher Travel Trends Study 2024, which surveyed 982 German consumers, young adults prefer solo travel and value sustainability, activities and loyalty programs. They are tech-savvy and find budget-friendly options, although their travel budget is expected to shrink by 14%. With an average of 6.5 travel days, Gen Z has the shortest vacation time, with the traditional two-week summer vacation becoming less important. The travel industry should adapt to attract this new, experience-oriented target group. Read more

• TUI ANALYSIS SHOWS THE TOP TRAVEL DESTINATIONS FOR BEST AGERS: The TUI analysis shows that the Azores are the most popular destination for best agers, followed by Tenerife, Madeira and Gran Canaria. German pensioners attach great importance to “cost and affordability” and “local history and culture” when planning their trip. The Maldives, Fuerteventura and Gran Canaria are particularly popular with all-inclusive tourists. Safety is also an important factor, with Madeira and the Azores rated as the safest destinations. Read more

• FACEBOOK, TIKTOK, LINKEDIN &CO: WHICH AGE GROUP PREFERS TO USE WHAT?: A recent YouGov survey shows that social media is used differently by different age groups in Germany. Facebook remains the most popular among Generation X (born between 1965 and 1980), while Generation Z (born between 1997 and 2006) favors platforms such as Instagram, YouTube, Snapchat and TikTok. LinkedIn, on the other hand, is mainly used by millennials (born 1981-1996). Overall, women use social media more frequently than men, with the exception of YouTube, which is used by more men. Gen Z spends the most time on social media, with a significant number spending more than 20 hours per week on platforms such as YouTube, TikTok and Instagram. Read more

• VIRTUAL CONFERENCES ARE NO LONGER THE RULE: Berlin experienced an impressive recovery in the congress and conference business in 2023, with over 70,000 business events and 7.6 million participants, 20% of whom came from abroad. The number of event guests increased by 29%, bringing international success to the capital despite limited long-haul flight connections. Revenue from the MICE segment (Meetings, Incentives, Conventions, Exhibitions) rose to 1.4 billion euros. According to Visit Berlin Managing Director Burkhard Kieker, the ‘corona dent has been completely ironed out’ and virtual conferences hardly play a role anymore. The support provided by the Berlin Senate's ‘Restart Programme’ and the ‘Berlin Convention Fund’ contributed significantly to the industry's revival. With major events such as the IFA and the European Football Championship, 2024 is also expected to be a successful year for Berlin's congress business. Read more

• BOOKERS INCRESINGLY OVERWHELMED: A recent study by Travelport shows that 56% of travellers find airline offers more difficult to understand today than 10 years ago. The variety of options, such as economy, business and different fare types, has increased from around 500 in 2010 to over 10,000 in 2024, an increase of 1900%, according to Travelport. 58% of respondents feel overwhelmed by the variety of choice, while 66% say there are too many hidden costs. Many travellers are unsure whether they have got the best deal after booking. More than 80% find comparing air fares time-consuming and the majority prefer to see all options on a single page. Travel agents could play an important role here by providing clarity and facilitating the booking process. The survey included 1659 people from Germany, South Africa, the UK and the US. Read more

• THE INFLUENCE OF CONTENT CREATORS ON PURCHISING DECISIONS IS DECLINING: The influence of content creators on purchasing decisions fell in 2024 for the first time since the coronavirus pandemic. According to the Social Media Atlas by PER Agency and Toluna, 29% of users stated that they had already bought something because of a Youtuber or Instagrammer, which represents a decrease compared to the previous year. However, young users in particular remain receptive to content creators recommendations, especially when it comes to fashion, cosmetics and beauty. The study is based on a survey of 3,500 German internet users from January to February 2024. Read more

• HIGHER GROWTH FOR TRAVEL YEAR 2024?: The German Travel Association (DRV) is raising its forecast for the 2024 travel year, as sales and guest numbers are rising more strongly than expected. The DRV expects total expenditure of 80 billion euros for holidays and private trips in 2024, which corresponds to a 6% increase in turnover compared to the previous year. Originally, an increase of 4% and 78 billion euros had been forecast. The increase in the number of holidays is estimated at 2%. Cruises and self-organised tours are developing particularly positively, while the tour operator market is growing more moderately. The demand for trips within Germany and to neighbouring countries is rising, and international trips are also increasingly being self-organised. Early booking business was strong and the insolvency of FTI, Europe's third-largest tour operator, led to an increase in last-minute offers. Nevertheless, the sales volume of the last-minute business is not yet sufficient to compensate for the cancellations caused by the FTI bankruptcy. Read more

CURRENT TOPICS WITHIN THE TRANSPORTATION INDUSTRY IN GERMANY & EUROPE

• LUFTHANSA AIRLINES IS NOW TO SHRINK: Lufthansa Airlines is planning to reduce its fleet as the half-year results of CEO Carsten Spohr and CFO Michael Niggemann fall short of expectations. The main reasons for this are strong competition and sluggish fleet renewals, especially in the core business. Lufthansa Airlines provides 60 per cent of the seats in the Group, but only generates 40 per cent of revenue, which leads to high unit costs. The planned turnaround programme comprises five points: Commercial, Operation-Quality, Partnership Management, Efficiency in Flight Operations and Fleet. A key objective is to focus the intercontinental network on more profitable routes and to transfer parts of the European route network to the lower-cost subsidiaries Discover Airlines and Lufthansa City Airlines. Some of the Airbus 320 short and medium-haul jets are to be transferred to these subsidiaries or wet-lease partners by 2028. Lufthansa also plans to use wet-lease partners to better cushion seasonal and capacity-related fluctuations. The delays in the delivery of new aircraft cause high costs, and Lufthansa is currently negotiating compensation with the manufacturers Airbus and Boeing, although this does not fully cover the financial damage. Read more

• PRICES FOR LONG-HAUL FLIGHTS HAVE FALLEN: Prices for international flights fell by 3.1% in the first half of 2024, as reported by the Federal Statistical Office. Prices for economy class tickets to Central America fell particularly sharply by almost 16%, as well as to Asia and Australia (-12.3%), North America (-7.4%) and South America (-3.8%). In contrast, prices for flights to Africa rose by 4.1% and to Europe by 2.7%. Despite the decline, however, international flight tickets remain almost 21% more expensive than before the coronavirus crisis. Read more

• EUROWINGS AND SUN EXPRESS BECOME INTERLINE PARTNERS: Lufthansa subsidiary Eurowings and Sun Express have agreed an interline agreement for selected routes. Travellers going to Turkey and vice versa will benefit from extended flight options. As part of the cooperation, both partners are currently working on a codeshare agreement, as Eurowings also announced. This is to be implemented in the course of the summer. Read more

• HALLE/LEIPZIG: CLIMATE ACTIVISTS BLOCK AIRPORT: During the night from Wednesday to Thursday, climate activists at Halle/Leipzig Airport paralysed freight traffic for three hours. The ‘Last Generation’ group got stuck on the carriageway, disrupting operations. Two other activists were prevented from doing so. The blockade led to some delays in passenger operations in the morning, but cargo traffic was more severely affected. The police arrested all those involved and launched an investigation into trespassing, damage to property and interference with air traffic. This action follows similar protests in Frankfurt, Stuttgart, Zurich and London, during which air traffic was disrupted. Lufthansa has already demanded compensation for the disruption in Frankfurt, where 250 flights were cancelled. Read more

• UBER NOW ALSO TRAVELLING BY WATER: Uber is expanding its offering on the water: from summer 2024, new boat options will be available in cities such as Venice, Ibiza, Athens and Paris. In Venice, it has been possible to book a ‘limousine boat’ for 120 to 150 euros since 3 July. In Mykonos, Athens, Corfu and Santorini, Uber Boats have been available for excursions since 4 July, from 200 euros. Ibiza is offering day trips on a ‘Sunseeker’ yacht from August for 200 euros per person. In Paris, one-hour boat trips on the Seine are available from 12 July to 3 August. Prices and availability depend on weather conditions. Read more

DESTINATION NEWS

• THESE DESTINATIONS ARE 'BURSTIN AT THE SEAMS': The Holidu analysis shows that many German travellers are now avoiding destinations that suffer from mass tourism. Data from the market research company Euromonitor International was used to determine the number of tourists per inhabitant in various cities. Dubrovnik (Croatia) tops the list with 27 tourists per inhabitant, followed by Rhodes (Greece) with 26 tourists per inhabitant and Venice (Italy) with 21 tourists per inhabitant. Other heavily affected cities are Heraklion (Greece) and Florence (Italy), where the overload of visitors is also noticeable. Other cities on the list are Reykjavik (Iceland), Amsterdam (Netherlands), Lisbon (Portugal), Porto (Portugal) and Dublin (Ireland), which also have a high number of tourists in relation to their population. Read more

• THESE ARE THE MOST ENVIRONMENTALLY FRIENDLY COUNTRIES: The Center for Environmental Law & Policy at Yale University has identified the most environmentally friendly countries in 2024, based on the Environmental Performance Index (EPI). The best results were achieved by Estonia with an EPI score of 75.3, followed by Luxembourg (75.0), Germany (74.6), Finland (73.7) and the United Kingdom (72.7). Other countries in the top ten are Sweden (70.5), Norway (70.0), Austria (69.0), Switzerland (68.0) and Denmark (67.9). Read more

• DUBAI: Dubai recorded a record 9.31 million international overnight visitors in the first half of 2024, an increase of 9% compared to the previous year. This positive development continues the strong tourism upswing that began in 2023. The Dubai Department of Economy and Tourism (DET) highlights that targeted campaigns and partnerships with over 3,000 global partners have contributed to this growth. The most important source markets are the Gulf Cooperation Council (GCC) and the Middle East (MENA), which together account for 26% of visitors, as well as Western Europe with 20%. The hotel industry in Dubai also performed well: Average occupancy rose to 78.7% and the average daily rate (ADR) reached AED 558. In addition, several new luxury hotels have opened in the last six months. In the 2023/24 cruise season, Dubai recorded over 132 ship calls and, together with other regional authorities, promoted the Cruise Arabia Alliance to strengthen the cruise sector in the Arabian Gulf. Read more

• TURKEY: Spain remains the most popular destination for Germans, but Turkey is rapidly gaining popularity. Turkey recorded an increase in air travel of over 20% compared to 2019, while the number of flights to Spain decreased. Turkey's market share among German travellers rose from 3.5% in 2019 to 5.3% last year, while Spain fell to 9.1%. Turkey benefits from cheaper prices compared to Spain, where travel costs rose by 35% between 2022 and 2023. In contrast, prices in Turkey only rose by 13%. Turkey also offers good value for money and less ‘overtourism’, as many tourists prefer all-inclusive holidays and large coastal regions are less frequented. Despite challenges such as the FTI bankruptcy and geopolitical uncertainties, Turkey remains an attractive destination, especially for tourists from Russia and other source markets. Read more

• SPAIN: Spain continues to dominate as a top holiday destination, both on the islands and on the mainland, despite the current challenges posed by local protests and the rising cost of living. Spanish national football team victories and growing concerns about mass tourism characterize media coverage. Local authorities are responding to the negative effects of tourism by taking action against binge drinking and illegal holiday home rentals. Nevertheless, Spain is recording high booking figures and remains a popular summer destination. Tour operators are reporting strong growth and Anex is planning to further expand its mainland offering in winter. Read more

• CRETE: Greece's government wants to build a new airport on the island of Crete. Crete currently has two airports, Chania and Heraklion, but the latter is overloaded with a predicted 9.2 million arrivals this year and is to be replaced. The new airport is due to be completed by February 2027 in Kastelli, south-east of Heraklion, and will be able to handle up to ten million, and later 18 million guests per year. Read more

• SANTORINI: Santorini is under pressure due to massive numbers of cruise ship tourists. Municipal president Panos Kavallaris called on locals to stay at home on days with 17,000 tourists, which led to a shitstorm. Mayor Nikos Zoros is planning an upper limit of 8,000 cruise passengers per day from 2025. The number of days with over 11,000 passengers has already been reduced for 2024. Prime Minister Kyriakos Mitsotakis supports these measures in order to curb overtourism. Read more

‍