Wobbly” is a word one does not often find on the business news websites to describe an economic situation or outlook, but it seems to fit when one contemplates or discusses the condition of the outbound tourism industry in Germany and, in particular, its Visit USA business.
On the one hand, it appears that there are some savvy marketers—both the international tour operators in Germany, as well as the receptive tour operators within the United States—who’ve managed to keep the inbound traffic from Germany coming at a healthy pace.
On the other hand are the numbers. For the whole of the German tourism industry—including those who market and serve travel by Germans taking their holidays within Europe and Germany itself—it has been a challenge to find product and destinations not tainted with the penumbra of terrorist attacks; the numbers are holding up vs. 2015. But for those who sell USA product, what numbers there are have been awful. The latest data from the U.S. National Travel and Tourism Office (NTTO) for April 2016—the latest month for which figures are available—indicate that arrivals to the U.S. from Germany in April were down 15 percent over 2015 and down 7 percent year-to-date (through April 2016) for the same period in 2015.
Now, for the first time since the wake of the 2008-09 economic recession, there are news reports of insolvency among German tour operators—though none involve any company that sells Visit USA product—that suggest that not all is well in the German travel industry. Following are narrative snapshots gleaned from various news sources, including the German travel trade publicans, FVW and Touristik Aktuell.
—Insolvency proceedings against the Berlin-based Asia specialist Suntrips will open on Oct. 31. Meanwhile, the dynamic packing provider LMX Touristik plans to take over parts of the insolvent specialist and to maintain the brand. LMX Touristik had taken a lot of the trips for already booked customers of Suntrips. Meanwhile, all journeys have been completed, according to Mario Krug, LMK’s managing director. Suntrips filed an application for insolvency August 5th.
—Angelika Vogel, CEO of Dusseldorf-based Ibero Tours, has written customers asking for asks for an understanding of the company’s situation and patience with outstanding funds. It is also “in the interest of the customers” that the company’s long-term efforts “reach a complete creditor satisfaction with the avoidance of the insolvency.” The company’s high level of debt led to travel cancellations, cancellations and unpaid hotels, news reports indicate.
Vogel said that Ibero Tours’ investors have assured the company “that no later than January 2017 sufficient capital will be available to compensate all liabilities of the company without any deduction.” Until then, she wrote customers, it is “unable to make binding payment promises,” adding,” I would be very much obliged if you would give us the time to be able to comply with all our obligations. According to the shareholders of our company, this is currently not possible.”
—Alltours, Germany’s fifth-largest tour operator, reported pre-tax profits of €52 million ($56.6 million) for the year ending October 2016 even though customer numbers are likely to fall by 241,000 to 1.63 million. The company said that it maintained its profits by sharply cutting back on full charter flights.
“Despite lower customer numbers, the Alltours Group is very satisfied with the financial results,” said managing director Markus Daldrup.
The decline in volume was largely due to an overall loss of 260,000 bookings for Turkey, Tunisia and Egypt. For the near-term, is targeting a 4.5 percent increase for both customer numbers and revenue in the 2016/17 year. Winter bookings are currently “going (according) to plan,” although demand for Turkey remains below last year.
—The Munich-based tour operator Studiosis—a large cultural holiday specialist which also operates the Marco Polo brand— increased its revenues this year by 2 percent to nearly €263 million ($286 million) but customer numbers fell to 100,150 from 103,509 in 2015.
Owner Peter-Mario Kubsch said he was very satisfied with these figures given the many crises and incidents around the world during the year. Destinations with strong growth this year included Japan (+40 percent), Cuba (+31 percent), Iceland (+21 percent) and Southern Africa (+18 percent) while the number of Russia bookings nearly doubled to 1,861 guests. In general, the tour operator saw a trend towards European and long-haul destinations.
Bookings of city trips declined by up to 60 percent following the terrorist attacks in Paris, Brussels and Nice. Even demand for Rome, which celebrated a Holy Year, remained well behind expectations. The company expects a similarly difficult year in 2017 with no significant improvement in demand. Tours for families, smaller cities and short trips will be expanded following good demand.
—The family owned tour operator Schauinsland-Reisen—it is headquartered in Duisburg, in the western part of Germany—reported that it had flat revenues and customer numbers this year, but still says that it increased its market share. Owner and managing director Gerald Kassner announced figures for revenues and customers in 2015/16, with turnover of €1.1 billion ($1.2 billion) and nearly 1.4 million guests, which showed little change from the previous year. Kassner admitted that the company’s profits have fallen this year, but he declined to indicate by how much.
He was nonetheless positive as the company presented of its summer 2017 program, however, saying, “We’re very happy that we can close this competitive, turbulent year without any drop in volumes or revenues. That means we are ahead of the market.”
Looking ahead, Kassner is cautiously optimistic for the forthcoming year. In 2016/17 as a whole, he is aiming to “increase customer numbers and turnover and achieve growth on a solid, healthy basis,” although he declined to make any precise forecasts “at this stage.”