Market Update - 11.07.24

CURRENT MAJOR TOPICS WITH THE TOURISM INDUSTRY IN THE DACH REGION

• NUMBER OF TRAVEL AGENCIES DECREASES SIGNIFICANTLY IN GERMANY: In 2023, eleven travel agency organizations specializing in leisure travel generated a turnover of just under 17 billion euros. This represents an increase from 14 billion euros in 2022 but remains below the 19 billion euros reported in 2019. At the top of the list is the TSS group with revenues of 3.31 billion euros. Overall, travel agency turnover in 2023 is expected to reach around 90 percent of the 2019 level, despite the number of travel agencies falling to around 8,000. Meanwhile, the German travel market exceeds the 2019 figure for the first time, recording a turnover of 79 billion euros in 2023. Read more

• BUSINESS TRIPS ARE LESS FREQUENT BUT LONGER: In 2023, the number of business trips in Germany saw a significant rise compared to 2022, though it remained below the 2019 levels. A total of 9.9 million business travelers embarked on 116.7 million trips, marking a 55% increase from 2022. Despite this, corporate expenditures amounted to 46.2 billion euros, only 17% lower than the 2019 figure, reflecting higher costs and longer durations. The average trip length extended to 2.6 days, indicating a shift from day trips to multi-day journeys. This surge was primarily driven by medium and large enterprises, as well as the public sector. Overnight stays totaled 82.3 million, with 56.7 million within Germany and 25.6 million abroad. Read more

• TRAVEL WILL CONTINUE TO BECOME MORE EXPENSIVE: A new study by the Hamburg-based credit insurer Allianz shows that travel is continuing to become more expensive despite inflation and climate change. Demand for hotel accommodation and cruises is growing strongly, enabling companies to push through higher prices. Worldwide, air travel is expected to increase by around 10 percent, with Europe remaining the most important destination region thanks to the weak euro. US citizens are benefiting from the strong dollar, which is increasing their purchasing power abroad. At 68%, hotel occupancy reached its highest level since the pandemic in May 2023. Cruises are also recovering and are likely to exceed the passenger numbers and profits of 2019 in 2024. Read more

• HOW THE SWISS ARE TRAVELING THIS SUMMER: Summer travel by the Swiss shows a wide variety of destinations, as the incoming bookings of the Kuoni brands show. Greece and Spain are the most popular destinations, followed by the USA, Italy, the UK and Germany. Northern Europe with Norway, Iceland and the Baltic states attracts a total of 17% of travelers. The Norwegian Lofoten Islands and trips by mail boat are particularly popular. According to a survey by the market research institute Marketagent, 53% of Swiss people prefer new and unknown destinations every year. Family and friends have the greatest influence on the choice of vacation destination, but social media, travel blogs and traditional travel advertising also play a role. Read more

• HOW THE FTI INSOLVENCY IS AFFECTING THE MARKET: The insolvency of tour operator FTI has had a major impact on the market and led to an increase in bookings with other providers such as TUI, DER Touristik and Alltours. These companies are recording significant growth as holidaymakers are now switching to alternative providers. TUI was able to add 300.000 additional places to its program and is reporting particularly high booking figures for Mediterranean destinations. TUI's move from the London to the Frankfurt Stock Exchange, combined with a share placement of 46.5 million euros, strengthens the share's liquidity and index membership. Despite long waiting times for passports, demand for vacation travel remains high, which has a positive effect on TUI. The TUI share shows recovery potential, recently gained a good two percent and was one of the day's winners in the MDAX. Read more

• ARTIFICIAL INTELLIGENCE IS A GAME CHANGER IN TRAVEL AGENCY SALES: Various travel agencies such as Best-Reisen, RTK, Reiseland, TVG and Schmetterling have started to use artificial intelligence (AI) for their customer communication, particularly for automated mailings. This technology helps to maintain close contact with customers even in times of a shortage of skilled workers, as was demonstrated after the insolvency of FTI. RTK was able to automatically generate customized offers for former FTI customers with its AI-controlled digital employee Toni. Detlef Gambs from Reisebüro Hauns in Butzbach emphasizes how AI makes his work easier and how customers appreciate the personal service. Best-Reisen reports more customer contacts, higher sales and better Google ratings thanks to the " Best-Connect" technology. Read more

CURRENT TOPICS WITHIN THE TRANSPORTATION INDUSTRY IN GERMANY & EUROPE

• CONDOR ANNOUNCES NEW ROUTES FOR SUMMER 2025: Condor is expanding its 2025 summer flight schedule with two new destinations from Berlin and one destination from Düsseldorf. From April 2025, Condor will offer flights from Berlin to Rhodes four times a week and from May up to three times a week to Corfu. These flights will be operated with the Airbus A321 Neo, the airline's newest addition to its aircraft portfolio. Read more

• LUFTHANSA'S ACQUISITION OF ITA AIRWAYS HAS BEEN APPROVED BY THE EU: The takeover initially comprises a minority stake of 41 percent in return for a capital contribution of EUR 325 million. The transaction is expected to close in the fourth quarter of 2024, subject to the implementation of concessions to the European Commission and the approval of other international competition authorities. ITA Airways will be integrated into the Lufthansa Group as the fifth network airline, retaining the brand and leveraging synergies in sales and the Miles & More frequent flyer program. Rome-Fiumicino will become the Lufthansa Group's sixth hub and will be directly connected to the Group's other route networks on a codeshare basis once the transaction is completed. This will create more than 1.000 new connecting flights, especially to destinations in South America, North Africa and the Middle East. ITA Airways currently operates 96 Airbus aircraft, including 23 long-haul and 73 short-haul aircraft. Read more

• SUMMER VACATION AIR TRAFFIC: GERMAN AIRPORTS WELL PREPARED FOR HIGH PASSENGER NUMBERS: A significant increase in passenger traffic is expected at several airports in Germany during the coming summer vacations, including Hamburg, Frankfurt and Düsseldorf. The airport operators say they are well prepared for the expected rush. Hamburg is expecting up to 55.000 passengers per day, especially on the first day of the vacation. The airport has invested in personnel and process optimization to make handling more efficient, including new technologies such as tagomats for baggage drop-off. Similar measures are also being implemented in Frankfurt and Düsseldorf, where modern CT scanners and self-service offerings are intended to speed up processes at security checkpoints. Despite the high volume of passengers, the airport operators are not expecting chaotic conditions and recommend that passengers arrive at the airport around two to two-and-a-half hours before departure in order to reach their flight safely. Read more

DESTINATION NEWS

• ST. MAARTEN: St. Maarten is attracting vacationers with free overnight stays and discounted excursions. The promotion runs until the end of August and is being organized in cooperation with the St. Maarten Hospitality & Trade Association and other tourism partners. Further information and offers can be found on the website of the St. Maarten Tourist Office. Read more

• PERU: Peru has launched a new tourism campaign, 'Peru Wow', which aims to showcase the country in a very positive light. The campaign features two astronauts inspired by images from space to explore Peru's stunning landscapes. As well as Cuzco, the Sacred Valley and Machu Picchu, the main attractions include the Amazon rainforest, Lake Titicaca with its floating islands and the Huacachina oasis near Ica. Activities range from hiking and cycling in the Andes to spotting condors in the Colca Canyon. Now that the protests are over, it is easy and safe to travel to Peru again. Visitor numbers from Germany are increasing, but are still below pre-corona levels. A roadshow and training courses are planned to promote the German market. Read more

• AFRICA: The African tourism sector is experiencing strong growth. Turnover is expected to reach almost 30 billion US dollars by 2028, with annual growth of just under five percent. This is expected to create more than 18 million new jobs, especially in up-and-coming destinations such as Ghana, Senegal, The Gambia and Zimbabwe. Companies such as TUI are opening new hotels in The Gambia and Senegal, while Zimbabwe recorded an increase in international arrivals of more than 150 percent in the first quarter of 2024. African airlines are expected to carry around 98 million passengers by the end of 2024, an increase of 15 percent compared to the previous year. Read more

• COPENHAGEN: This summer, Copenhagen is rewarding environmentally conscious tourists with the CopenhagenPay pilot project. Participants receive discounts and free activities for environmentally conscious behavior, such as traveling by bike or collecting waste. The aim is to promote sustainable travel and enrich the cultural experience. Attractions such as free city tours, windsurfing courses and vegetarian meals attract visitors who want to make an active contribution to environmental protection. Read more

• CROATIA: Croatian tourism recorded positive growth in the first half of 2024 with over 7.2 million arrivals and 28.1 million overnight stays according to the E-Visitor system. This corresponds to an increase of six percent in arrivals and two percent in overnight stays compared to the same period last year. Overnight stays rose by two percent to 25.8 million, particularly on the Adriatic coast, while the mainland and Zagreb recorded increases of seven and eight percent respectively. Croatia is consolidating its position as a year-round destination, supported by government investments to improve the quality of the offer outside the summer season. The regions of Istria, Split-Dalmatia and Kvarner were particularly popular, with Dubrovnik, Rovinj, Zagreb, Split, Porec, Umag and Zadar recording the highest numbers of visitors. German tourists dominated with 5.7 million overnight stays, followed by domestic and Slovenian guests. Read more

• BRITTANY: Brittany is presenting itself for the first time with a B2B roadshow in Germany. Together with numerous hotels and three incoming agencies, the Brittany Tourist Office will be presenting new products, excursion tips and sights. The roadshow will take place on October 9 in Cologne and one day later in Düsseldorf. Read more

• SANTORINI: The mayor of Santorini, Nikos Zorzos, warns of a collapse in tourism on the Greek island. He is calling for a ban on new hotel beds and apartments for short-term rentals as well as new buildings in general on the island. Zorzos argues that the infrastructure is not designed for the increasing number of tourists. In addition to the holidaymakers, 10,000 day tourists come to Santorini every day during the high season. The mayor is calling for help to cope with the increasing numbers. He also criticizes the fact that the fees for cruise guests are far too low. Read more