Market Update - 20.06.24

CURRENT MAJOR TOPICS WITH THE TOURISM INDUSTRY IN THE DACH REGION

• HOLIDAYMAKERS ARE MAINLY LOOKING FOR PEACE AND RELAXATION: A survey by MSC Cruises has revealed that holidaymakers are mainly looking for peace and relaxation, followed by spending time with relatives, sightseeing and experiencing nature. Getting to know new countries is important for just under half of them. Water fun on a beach holiday is relevant for 29 percent, while wellness is crucial for 20 percent of respondents. Meeting new people, shopping, sports and hobbies play a role for 10 to 20 per cent. Read more

• GERMANS WANT TO SPEND MORE MONEY ON HOLIDAYS: A study by Hyatt shows that 73 per cent of Germans want to maintain or increase their travel spending. Two thirds of travellers from Europe and the Middle East also plan to spend more money on travel or maintain last year's travel budget. For Germans, accommodation costs (53%), weather conditions (50%) and transport costs (42%) are decisive factors when choosing a destination. Read more

• MORE AND MORE EXPENSIVE, DIFFERENT DESTINATIONS: HOW GERMAN'S TRAVEL BEHAVIOR HAS CHANGED: Germans attach great importance to their holidays and are spending more and more money on them. After the pandemic, many are tending towards "revenge travel". Most book online, preferably via Booking.com and TUI. Package holidays, especially around the Mediterranean, are popular. Favourite destinations are the northern German coasts and islands such as Rügen and Mallorca. Long-haul holidays often go to South East Asia. Despite the growing shame of flying, many people are travelling by plane. Hotels are the preferred accommodation. Spending on holidays is at a record high, with an average of 1538 euros per trip. Read more

• THESE TOURISTS SPEND THE MOST MONEY ON TRAVEL: The World Tourism Organisation has analysed the travel flows for 2023 and presented exciting results. Tourists from China spent the most worldwide with 196.5 billion US dollars, followed by the USA with 150 billion US dollars and Germany with 112 billion US dollars. Particularly noteworthy is the increase in travellers from India and Italy, which moved up significantly in the top 20. France was the most popular destination in 2023, welcoming 100 million international tourists. Spain was in second place with 85 million, followed by the USA with 66 million. Italy, Turkey, Mexico, Germany, Austria, the UK and Greece also made it into the top 10 most-visited destinations. Read more

• EIGHT OUT OF TEN START-UPS USE AI: Eight out of ten start-ups use artificial intelligence (AI), according to a Bitkom analysis. This is a significant increase compared to the economy as a whole, where only 13 per cent use AI. Generative AI is widespread in two thirds of start-ups, often to support business operations (45 per cent) and in products (37 per cent). AI is considered a key technology of the future by 80 per cent of start-ups, with clear advantages such as easier access to financing (75 per cent) and essential importance for products (38 per cent). Read more

• FTI CANCELS ALL TRIPS: FTI has now cancelled all trips. The decision affects around 175,000 booked package tours that were to take place after 6 July, with a total value in the high three-digit million range. Despite intensive efforts, Axel Bierbach, the insolvency administrator, was unable to find a solution that would allow the booked trips to be taken over by other providers. As a result, all affected customers must now expect cancellations of their travel plans, including those who have booked individual services such as flights or hotels via FTI. Read more

• FTI FLIGHT SUBSIDIARY ALSO GOES BANKRUPT: The insolvency of the FTI flight subsidiary Flight Trading GmbH on 14 June 2024 has hit the FTI Group hard. In addition to FTI Touristik GmbH and Big Xtra Touristik GmbH, Flight Trading GmbH also filed for insolvency. Airlines such as Sun Express, Eurowings and Condor, which had contracts with Flight Trading for charter flights, are affected. These contracts are now null and void and the airlines have to reorganise their flight capacities. Despite the challenges posed by the insolvency, Eurowings is showing strong growth in bookings for its own holiday packages. Read more

• ALLTOURS WANTS TO CONQUER THE FTI MARKET IN EGYPT THIS WINTER: Alltours plans to take over FTI's market share in Egypt next winter as the company experiences a booking boom with double-digit growth rates. The insolvency of FTI has further boosted demand and Alltours expects growth of over 20 per cent. The offers for Egypt in particular, including Nile cruises from Luxor with stays on the Red Sea, are to be expanded. Owner Willi Verhuven is considering withdrawing from day-to-day operations, while Alltours has significantly expanded its capacity in Turkey and Egypt and offers exclusive packages such as the Hotel Akeah Broncemar on Gran Canaria. Read more

• BOOKING ABOLISHES BEST PRICE CLAUSES ACROSS EUROPE: Booking has removed the best price clauses across Europe, which obliged hotels to offer prices on the platform that were at least as favourable as those on their own website. This decision was made as part of the Digital Markets Act, even before the EU ruling was finalised. The Federal Court of Justice had previously ruled that the clauses were unlawful in Germany, and the Advocate General of the ECJ had expressed similar concerns. Booking emphasises that this is a measure to comply with the DMA requirements for gatekeepers and is not in response to a claim for damages. Read more

• TOUR OPERATORS FEAR IMAGE DAMAGE DUE TO FTI BANKRUPTCY: According to a survey by Reise and Counter vor9, around half of the tour operators surveyed expect their company to benefit from the redistribution of the market. At the same time, however, two thirds of those surveyed fear that the industry's image could be damaged among customers. Other tour operators have reacted quickly and are enticing customers with special offers, waiving advance payments and offering flexible cancellation options in order to attract former FTI customers. Despite the short-term opportunities, there is scepticism about the long-term effects: Many believe that the second major bankruptcy of a tour operator within five years could shake confidence in the economic stability of tour operators. Read more

• THE HOTEL INDUSTRY IS BECOMING MORE SUSTAINABLE, BUT THE LABELS ARE CONFUSING: The hotel industry is increasingly focussing on sustainability, as can be seen at the "Change Maker Hotels", which are active in 44 locations in Germany, Austria and South Tyrol. However, the variety of around 60 different sustainability certificates in Germany is perceived as confusing. The Fairweg.de portal, which was developed by Ralf Hieke and Mark Schumacher, offers more clarity with its new 100-point system. Travel agencies can view the Fairweg score for bookings via platforms such as Ameropa and Olimar. In addition, the Stayfair button in Bistro provides information about certified accommodation and replaced the Green Leaf in summer 2023. Read more

• HOW THE SOCIAL MEDIA MARKET IS DISTRIBUTED: In 2023, the number of social media users rose by 5.6 per cent to over five billion people. While Facebook ranks ahead of YouTube, Instagram and Tiktok with a good three billion users worldwide, the situation is different in Germany. Here, YouTube ranks ahead of Instagram, followed by Facebook and Tiktok. Read more

CURRENT TOPICS WITHIN THE TRANSPORTATION INDUSTRY IN GERMANY & EUROPE

• AVIATION IS WELL PREPARED FOR THE SUMMER TRAVEL SEASON: According to the industry association BDL, around six per cent more seats will be available at German airports between May and October 2024 than in the previous year. Despite this increase, the industry hopes that there will be no chaos during the peak travel season as in previous years. Companies have worked intensively with authorities and police forces, hired additional staff and optimised processes. Read more

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• CONDOR: AIR FARES RETURN TO "NORMALITY": Condor expects that the significant price increases for flight tickets as a result of past crises will slow down, despite continuing cost pressure due to higher paraffin prices and personnel costs. Christian Lesjak, Head of Sales at Condor, emphasises that the price sensitivity of holidaymakers is increasing and a return to normal prices that are affordable for all customer segments is expected. However, he does not believe that ticket prices will fall permanently as a result of the increase in capacity following the FTI bankruptcy, although there are currently short-term special offers to attract customers. Read more

• MARABOU REARRANGES THE BASES: Marabu Airlines is apparently planning to say goodbye to its existing bases in Hamburg and Munich and open new ones in Cologne/Bonn, Stuttgart and Nuremberg instead. According to Aerotelegraph, these plans come from well-informed sources. Marabu has so far only confirmed the opening of a new base in Munich and plans to offer flights from Stuttgart and Nuremberg from winter 2024. From winter 2024/2025, Cologne will also become a new base and expand Marabu's route network. Flights from Hamburg are also planned for the coming winter, but whether the base in Hamburg will remain long-term was not clearly answered. The exact flight schedule and route network for summer 2025 have not yet been finalised, but Marabu is planning to open new bases at other interesting locations in Germany and strengthen its presence. Read more

DESTINATION NEWS

• THAILAND: Thailand has decided not to introduce the planned tourism fee of 300 baht for international air travellers. Prime Minister Srettha Thavisin made the announcement during a visit to Chiang Mai. The government hopes that the abolition of the fee will increase tourist spending in other areas and benefit the economy. The fee was originally due to be introduced in February 2023, but was met with strong resistance from the private sector. Thailand continues to rely on measures such as longer visa stays and a new marketing campaign for luxury and wellness holidays to increase the country's appeal. Read more

• THAILAND: Thailand has become the first Southeast Asian country to legalise same-sex marriages. The Thai Senate voted overwhelmingly in favour of the law, which grants all married couples full legal, financial and medical rights. The Thai king must now approve the law before it comes into force. Read more

• SPAIN: Spain wants to continue to be a leading tourist destination, but without expanding excessively. After four years, Horacio Díaz del Barco is handing over the position of head of the Spanish Tourist Board in Switzerland to Javier Piñanes. In a departure interview, he talks about the challenges of starting the pandemic period in his new position. Despite the virtual restrictions during the pandemic, the office recorded great successes, such as the highest spending by Swiss tourists in Spain and over 2 million arrivals. Spain's friendliness, beaches, culture and gastronomy are popular with the Swiss. Spain's future tourism strategy aims at sustainability to avoid congestion and price increases while maintaining its leading position in tourism. Read more

• CHINA: International tourism from China is recovering more slowly than expected, with outbound travel still 40 per cent below pre-pandemic 2019 levels. Rising costs and visa burdens are slowing the recovery, with Chinese travellers spending the most on international travel globally. Last year, 87 million outbound trips from China fell, meaning the pace has continued to slow since the Chinese New Year in February. The slowdown in Chinese tourists is particularly affecting countries such as France, Australia and the USA, which were popular destinations before the pandemic. Industry observers do not see a return to pre-pandemic levels for another five years. Read more

• GERMANY: The 2024 European Football Championship promises a strong boost for the German tourism industry. According to a study by the Ifo Institute, Germany could earn an additional billion euros from foreign visitors during the tournament. This corresponds to around 0.1 per cent of current economic output in the second quarter. Around 600,000 additional foreign tourists could be expected during the European Championships, generating around 1.5 million additional overnight stays. This development is likely to lead to higher accommodation prices and increased turnover in the hospitality industry. Read more

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