It appears as if the weak euro is having a sustained impact on travel by Germans to the USA and, combined with a fall-off on outbound travel to short-haul destinations such as Turkey and northern Africa, the result is anemic activity by the overall German travel industry, according to latest reports on sales by German travel agents and tour operators.
First, a look at the state of the euro, vis-à-vis the U.S. Dollar. The following table shows that for the five year period from September of 2011 to September 2016, the exchange rate for the euro was near or above $1.30 in the fall of 2014 when tour operators were closing on U.S. product 2015. Then, the euro plummeted to as low as $1.05 in 2015 and has never really recovered. It has hovered just above or below the $1.12 mark for some time. What this translates to is a market two years ago in which German operators were buying a product that at a price that was 15 percent less expensive than it was worth.
Five Year Path of the Euro vs. the U.S. Dollar
This formula worked well until last fall, when German operators had to buy product that, because of the weak euro, was at a price that was 15 percent higher. This helps to explain, in part, the weak numbers for 2016. NTTO’s forecast for the year envisions a year-on-year increase of just 2 percent in arrivals from Germany. And the first quarter NTTO report for 2016 showed a year-on-year decrease of 10 percent for inbound arrivals from Germany.
The latest findings from inside Germany:
—As reported in the travel trade publication FVW, German travel agents saw a 7.2 decline in leisure travel sales last month, according to the latest monthly analysis of bookings by 1,500 travel agencies by the Nuremburg-based market research organization GfK. Last-minute summer bookings were weak, and early winter holiday bookings were also lower than this time last year. Other notes on the condition of the market:
—August figures left total sales to date for the 2015/16 tourism year down by 7 percent, with only 90 percent of last year’s total volume sold by the end of last month. “The accumulated losses can no longer be caught up on,” the market researchers declared.
—Last-minute bookings were weak last month, meaning that total departures in August (including all bookings in previous months) were a dramatic 18.1 percent lower than last year. July was the only month of the summer 2016 season to show positive growth—a mere 0.3 percent.
—Winter bookings dropped by 12 percent in August, and overall winter bookings are currently 8.1 percent behind last year’s levels. By comparison, winter bookings at the same time last year showed strong growth of 10.1 percent.
—In terms of departure months in winter 2016/17, all are showing declines compared to last year with the exception of April, which is due, says FVW, to the timing of Easter next year. April currently has a 38 percent rise in bookings while March is down by 20 percent, according to GfK.
—The latest monthly survey by the Frankfurt-based IT services firm TATS (Travel Agency Technologies & Services) showed similar trends. There was a 3.7 percent decline in overall travel agency sales last month, leaving sales for the first eight months of this year with negligible growth of 0.4 percent. Leisure travel sales fell by 7.8 percent.
—In terms of destinations, bookings for Turkey and Egypt again dropped last month while Spain, Greece and Bulgaria remained popular, according to figures from reservations provider Traveltainment for German package holiday bookings to leading destination airports.
—Greece maintained its good year on the German market, with a 14 percent rise for Rhodes and a 4 percent increase for Heraklion. In Bulgaria, Varna generated a strong 43 percent increase in bookings, indicating high late sales for holidays on the Black Sea coast.