The ongoing weakness of the Euro vs. the U.S. dollar is beginning to sink in—to the point at which the travel trade in Germany, which is the largest inbound source market in the Eurozone, is beginning to talk about it in tones that acknowledge its impact. It in its first publication following US Travel’s ipw show in Orlando, the German trade publication Touristik Aktuell (TA) cited reports from tour operators that seem similar to what INBOUND suggested following ITB two months ago in Berlin.
Now, says TA: “…what one must not forget is that the good prices for trips to the USA have come this season only about because the organizers were able to purchase in the past year still to a favorable exchange rate. That will be definitely different now.”
Robin Brückner, product manager for TUI, Europe’s largest tour operator, told TA, “it is expected that there will be significant price increases.” Meanwhile, Timo Kohlenberg (pictured here at ipw with Jake Steinman, founder and CEO of the NAJ Group, publisher of INBOUND), president and CEO of Hannover-based America Unlmited, predicted price hikes of up to 35 percent.
As a result, German operators are now negotiating more intensely with U.S. suppliers, who are sensitive to the price issue, by incorporating savings elsewhere, such as inclusion of additional services in their products.
There are, however, those who dismiss the notion that the outlook is negative. According to TA, “only a few Germany-based U.S. supplier representatives are worried.” For instance, Martin Walter, managing director of Brandmasters America, the agency that represents Brand USA in Germany, said “The influence of the exchange rate on the travel decisions overestimated.” And Hans Gesk, president of Germany’s Visit USA Committees, said that he does not expect a major breakdown of the German source market next year: “Our experience shows that many long-term (travelers) plan their trip and are willing to invest anything.”