When it comes to spending on holidays, Germans are traditionally among the world leaders but the boom times are over for tour operators in Europe’s largest economy after uninterrupted growth since 2009.
Last year’s revenue exceeded €27 billion, or $29.2 billion, for the first time ever, almost a third higher than at the end of the financial crisis. But there’s a shortfall of almost 1 million holiday bookings for this summer, according to a survey among households and travel agents by market research firm GfK.
Since the beginning of the new business year last October, tour operators and travel agencies have sustained revenue declines of 8 to 9 percent while online firms are reporting stagnating sales, the survey released on Tuesday showed.
Bookings for destinations in the eastern Mediterranean have fallen particularly sharply. Terrorist attacks, war in the Middle East and the refugee crisis have left many German holidaymakers wondering where it’s safe to spend their vacation.
“Terrorism targeting holiday resorts and innocent tourists as well as unsolved economic issues have led one in five German citizens to refrain from planning a holiday for 2016,” said Ulrich Reinhardt, scientific head of the Foundation for Future Studies, which is funded by British American Tobacco and has conducted a study of tourist trends.
Tour operators have been reporting a downturn in the sector since shortly before Christmas. January, traditionally one of the strongest months for holiday bookings, was a flop partly because on January 12, 10 German holidaymakers were killed in a suicide bomb attack in Istanbul.
Market leader TUI said last month its bookings for Turkey had slumped by 40 percent. The company’s bookings are also down in other holiday destinations and it had to shut down its hotel operations in the Egyptian resort of Sharm el-Sheikh after a suspected terrorist attack brought down a Russian passenger plane in late October, killing all 224 people on board.
Germany’s transport minister, Alexander Dobrindt, took the unprecedented step of banning German passenger aircraft from carrying luggage to the Egyptian Red Sea resort. Holidays in other Egyptian locations were also down, said TUI.
We simply don’t have any bookings for trips to the eastern Mediterranean anymore. Aida Cruises, spokesperson
One finding in the survey by the Foundation for Future Studies is causing tour operators particular concern: it’s mainly people aged 55 and over who are staying at home. They’re a prized clientele because they are more affluent and like to travel.
As a result, cruise line operators are frantically trying to redirect holidaymakers to supposedly safer destinations. Aida Cruises, a British and American owned German line based in Rostock, has taken ports in Tunisia, Algeria as well as Istanbul off its schedules and has moved its ship Aida Stella from the eastern into the western Mediterranean. Its sister ship Aida Aura has been sent out of the Mediterranean and will now be sailing from German ports to Norway and the Baltic. “We simply don’t have any bookings for trips to the eastern Mediterranean anymore,” said a company spokesman.
Cruise line rival MSC has also reacted and will not be docking in Egypt, Turkey or Ukraine. Instead, it will be stopping in Malta, Cyprus and Bulgaria as well as northern ports.
TUI Cruises hasn’t rerouted its ships yet but its parent company has secured large holiday capacities in Spain, Greece and in long-haul destinations. TUI chief executive, Fritz Joussen, said rising demand was boosting prices for holidays in those new locations, but investors aren’t convinced and TUI stocks have declined almost 18 percent.
It’s a similar story at British tour operator Thomas Cook, the parent company of German brands Neckermann and Condor, which said many customers had postponed their holiday planning. All hopes are now pinned on last-minute bookings. The downtrend is particularly galling for Thomas Cook because its Öger subsidiary specializes in Turkish holidays. If a large German chain of travel agents is to be believed, Öger bookings have collapsed by 70 to 80 percent. Thomas Cook has not given any figures for its Turkey business.
The big hotel chains are also suffering stock market losses. Share prices fell sharply in early summer and then again after November. Accor, Hyatt and Hilton have seen their share prices tumble by between 22 and 33 percent since the end of May 2015.
There are even setbacks in Greece, where tourism has started to flourish again as a result of the security crisis in neighboring Turkey.
Booking for the Greek islands of Lesbos, Samos and Kos, major entry points for refugees making the short but hazardous sea crossing from Turkey, are reported to have slumped as much as 90 percent in the case of Lesbos and 40 percent for Samos.
Tour operator Alltours, one of the biggest providers of Greek holidays in Germany, confirmed those figures in general terms.
However, demand for other Greek destinations is up. “Next to Spain and the United Arab Emirates, Greece will be the big winner in 2016,” Dietmar Gunz, founder of Germany’s fourth-largest tour operator FTI, told Handelsblatt.
“The Greek mainland, as well as the islands of Crete, Corfu and Rhodes, are selling very well at the moment. Lesbos and Samos are niche markets.”
Mr. Gunz said he didn’t expect terrorism fears to have a fundamental impact on the holiday market. “Mobility is increasing, flying is cheaper than ever before and available to everyone, and the range of offers is increasing. Customers know that a certain residual risk can’t be regionally or geographically contained or ruled out.”
Amid the refugee crisis and the terror fears, there’s a clear winner, according to the GfK survey: bookings for summer holidays in Germany are up 12 percent.
Christoph Schlautmann covers the travel and tourism industry for Handelsblatt. To contact the author: [email protected].