For Operators, German Travel to Turkey, North Africa, Dropped 40-60 Percent in Past Year
Midst the dire tone of the news coming from the German travel trade—a tone made all the more woeful at last week’s annual convention of the German Travel Association (DRV) in Berlin—came the news from one of the nation’s largest tour operators that it was actually increasing capacity for the USA in 2017. Stefanie Berk, managing director Thomas Cook Central Europe & East announced that, in its long-haul program for next summer, Cook has expanded its Neckermann Reisen portfolio in the USA by a third to 664 hotels. Long-haul prices will be generally stable, she added, in a report that was issued on the occasion of the close of the business year ending Oct. 31st.
About the only positive note in Berk’s report, the development seemed to underscore what some receptive tour operators in the USA have suggested to the Inbound Report for much of 2016. That is, while business volume in German outbound travel is down—primarily because Germans are skittish about visiting destinations, such as Turkey and northern Africa, that have experienced terrorist attacks—it has not suffered nearly so much with the USA, which is considered a luxury destination. And as a luxury destination, its price point is not a key consideration when searching for, or booking, a long-holiday.
(Keep in mind that most in the industry expects arrivals to the U.S. for 2016 to drop vs. 2015. For Thomas Cook, 2016 has been a difficult year. Overall, it experienced a 4 percent drop in bookings, although customer numbers were up by 8 percent when excluding Turkey. The company said prices for Turkey will be 8 percent cheaper next summer.)
You can determine for yourself whether or not the price points for U.S. product in Neckermann’s online brochure qualify as luxury prices:
But, aside from the one high note regarding the USA, there was little to cheer delegates to DRV’s convention. Some highlights the event, as reported by the German travel trade publication, FVW, follow:
—German tour operators as a whole suffered their first revenue declines for years after dramatic sales declines for Turkey, Egypt and Tunisia outweighed growth for other destinations and travel products.
—Tour operators saw their combined revenues drop by 4 percent to €26.3 billion ($29.3 billion) in the tourism year ending October 31, which is about €1 billion ($1.14 billion) less than last year, according to figures released by DRV.
—Travel agency sales dropped by 2-3 percent to about €23 billion ($25.6 billion), with lower leisure travel sales and stable business travel sales at about €7.4 billion ($8.2 billion).
—The main reason for the market downturn—the first since 2009 in the aftermath of the global economic recession—is that package holiday bookings for Turkey, Egypt and Tunisia dropped by between 40 percent and 60 percent.
—DRV president Norbert Fiebig, who is also CEO of DER Touristik, said there was clearly “a switch in the travel flows of German holidaymakers from East to West” this year, citing GfK market research figures. Even so, strong growth for the Western Mediterranean, long-haul destinations and cruises “could not offset the declines for Turkey, Egypt and Tunisia”.
—On the positive side, Spain, and especially the Balearics and Canaries, saw strong growth this year on already very high volumes. In addition, Portugal, Greece and Bulgaria generated double-digit growth in travel agency bookings this summer.
—Germany and neighboring countries were also popular as consumers switched to self-drive destinations. However, most of these trips are self-organized with direct accommodation bookings rather than booked as tour operator packages.
Addressing some 650 conference participants, Fiebig urged the travel industry to pay attention to the increase in self-drive holidays to overland destinations (such as Germany, Austria and Italy). “The more demand for overland destinations increases, the more this business will be lost for tour operators and travel agents.”
Fiebig also wondered aloud: “Will the trend to overland destinations disappear next year or the trend to self-organized holidays also extend to simple air-based package holidays?” In response, he said, the German travel industry needed to promote its services better for this market segment, especially the security of a tour operator package holiday.
Under the circumstances, DRV did not make any overall forecasts for 2017. It noted that winter 2016/17 sales are so far behind last year’s level but said it is too early to make any forecasts for summer 2017 due to very low booking volumes.
Meanwhile, in Hannover… We posed the question “Do you believe that the USA/North America might benefit from the decline in visits by German travelers to Turkey and North Africa?” to Timo Kohlenberg, president and CEO of Hannover-based America Unlimited. “I do,” he responded, explaining, “Usually, the traveler to Turkey is not a long-haul client, but with the massive amount of people who were traveling to Turkey, I think there might be a few shifts.” As for his own business prospects for 2017, Kohlenberg, said that they were “very promising,” adding, “We are up around 10 percent, year-to-date, for 2017.”
Perhaps one reason for the success of America Unlimited is a result of what Kohlenberg has called “stunt marketing.” Last week, he unveiled the latest example of this sort of promotion with this 10-story banner on the side of a mixed-use, office-retail-residential high rise building in Hannover.