With preliminary figures for the first half of 2019 showing that visits to the USA by German travelers were flat (actually, they were negative, down by one-tenth of a percent vs. last year), tour operators have been working on moving 2020 packages off the shelf. And German retailers, fortunate to have had a good year so far with recovering Mediterranean destination traffic, are trying to salvage the rest of the year.
Perhaps the authoritative source on the condition of the market, TUI, Europe’s largest tour operator, which is headquartered in Hanover, German, had this to say in its just-issued (August 3) quarterly report: “We expect improvement in summer trading as we lap the height of last year’s heatwave. Bookings and margins have improved year-on-year over the most recent weeks, however pricing remains behind cost inflation, therefore we continue to anticipate margins to be lower than prior year.”
Sales revenues remained negative in July, with the Tats-Reisebüro-Spiegel (Tats = Travel Agency Technology and Services) reporting that the invoiced total turnover of German travel agents was minus 1.9 percent in the month of July 2019 compared to the same month of the previous year, and that billed tourist sales showed a minus of 5.5 percent in July.
The German travel trade publication FVW, said however that activity should return to the “plus zone“ later this year. It also noted that some travel companies have launched late season offers to stimulate end-of-season sales.
Part of the challenge for any industry sector this year is the emerging evidence that the country is about to enter—if it has not already entered—an economic recession. As the Washington Post put it a week ago: “The German economy shrank 0.1 percent in the second quarter after anemic 0.4 percent growth at the start of the year. Two consecutive quarters of negative growth is the technical definition of a recession, and Germany is nearly there, sparking fears of an official recession by the end of the year.”
Meanwhile, the latest data posted by the U.S. Department of Commerce’s National Travel and Tourism Office (NTTO), showed the following numbers on German travel to the United States so far this year: