13.12.2019 – 15:32
GCE news mail: German market news week 50
German market news week 50
Please find hereby the weekly market news:
- Travel remains highly popular for Germans: At their annual conference this week in Hamburg, the German Travel Association (DRV) presented the final results of the tourism year 2018/19. The 2018/19 German tourism year ended 31. October, 2019 and had a sales growth of 2 percent, based on evaluations done by the market research company Travel Data Analytics (TDA). The statistics include: holiday packages or travel components, booked in stationary travel agencies as well as through online portals and tour operator websites. "The extraordinarily good results of the previous year were not only held level but there was also a slight increas - despite the numerous challenges", DRV President Norbert Fiebig said while presenting the results. In 2019, sales in stationary travel agencies remained on the same high level as the previous year, whereas online travel sales achieved a minor single-digit growth. However, revenue shares for the higher priced segments are growing for stationary travel agencies and are only of minor importance for the online segment. This shows that personal consultations at stationary travel agencies remains extremely valuable for fulfilling individual holiday wishes. In general, demand for long-haul trips was strong throughout the year, with a 4 percent increase in turnover. Cruises were also quite popular: a growth in turnover of 9 percent was recorded for the entire 2018/19 tourism year and 8 percent for the summer season. This year's summer season, was driven by strong demand for holiday trips to Turkey. Revenues in sales (stationary and online) went up by 24 percent compared to the previous year. Therefore, Turkey is - followed by Spain - the most booked destination of the summer months. Greece fell to third place but remained a strong performer based on the previous year. Egypt showed a high single-digit increase in sales and also Tunisia recorded a growth during the summer. For Spain, the most popular destination abroad, reported single-digit declines for the summer. Especially the Canary Islands have to cope with greater losses than the Balearic Islands. Concerning the long distance destinations, the United States (+7%) and Mexico (+10%) in particular had a great upward development in the summer season. Asia and Australia/New Zealand combined, make up for about 38 percent of the long-haul sales, with a minimal growth and below last year's numbers. When choosing their winter destinations, Germans rely on popular holiday regions that promise mild temperatures: Egypt is currently the most popular winter destination followed by the Canary Islands. This means that the Canary Islands are recovering after their steep sales decline during this past summer. Turkey also enjoys growing popularity as a winter destination. With respect to long-haul trips, the Maldives, South Africa and Cap Verde are in high demand this winter. - German bookings for Mediterranean hotspots drop in November As reported by FVW, Germany's leading travel trade magazine, German bookings for top holiday destinations fell more than 7percent last month. Only Hurghada and Fuerteventura evaded the general downward trend, according to the latest monthly booking figures shown by Amadeus. The 7.2percent drop in package and online bookings, through Amadeus systems, for the top ten destinations follows a 3.7percent drop in October. The figure is also similar to the overall booking figures as of January, which were down by 7.4percent, the travel reservations company said. In November, bookings for the top destination Antalya dropped by 7.1percent after a 9percent fall the previous month. However, the Turkish Riviera gateway airport remains the best-performing destination of the year to date with a minor decrease of 1percent in bookings between January and November. Second-placed Hurghada, which passed Palma due to its role as a top winter sun destination, continued to grow with a 4.4percent rise last month, although it is down by 7.2percent over the first 11 months of this year. The much smaller Egyptian destination Marsa Alam slumped last month, with a 40percent drop in bookings compared to the same month last year. Last month, the interest in Spain weakened even more for the German market, according to the Amadeus figures. There was a double-digit decline for Palma (-16percent) for the second consecutive month and the Majorcan capital was down by 11.1percent from January to November. In the Canaries, Fuerteventura (+5.6percent) remained on an upward path, indicating better demand for winter sun holidays. But the other three main holiday islands all generated lower bookings: Las Palmas (-12.3percent), Tenerife South (-6.2percent) and Lanzarote (-7.3percent). In terms of booking channels, online sales are generally performing better than travel agents for the top ten destinations, although both channels have lower sales than last year. However, travel agents continue to generate higher prices than online portals as they sell more full-priced holiday packages. The average price of a booking for a top ten destination through a German travel agency last month, was EUR999 per person compared to EUR734 for an online booking. The overall average was EUR870, according to the Amadeus figures.
Tour Operator News
- German government forced to step in and promise compensation to holidaymakers hit by the insolvency of Thomas Cook German government will repay customers of Thomas Cook: The German government has been forced to step in and promise compensation totalling EUR237 million to holidaymakers hit by the insolvency of Thomas Cook Germany. Their insurance protection was far below the levels required under EU law, as reported by FVW. The total financial damages from the collapse of the country's second-largest tour operator at the end of September are now estimated at EUR347 million, according to its insurance company Zurich Gruppe. This includes EUR59.6 million paid out by the insurers to bring back 140,000 Cook customers who were on holiday at the time of the bankruptcy announcement. The remaining EUR287.4 million represents advance payments for further 525,000 customers whose bookings were cancelled by the insolvent company and who are legally entitled to full compensation under EU law. But Thomas Cook Germany only had insolvency insurance for a maximum of EUR110 million under the country's tour operator protection scheme, which has been widely criticised as insufficient. Following the returnee costs, the Zurich insurance company only has EUR50.4 million left for compensation payments. This means there is a gap of EUR237 million between the total damages and the insurance protection sum. - TUI delivers a strong operating performanceTUI Group reports an operating result of 893 million Euros in the financial year of 2019 "At an operating result of 893 million Euros, TUI Group delivered a successful financial year 2019. Even in a challenging year for the tourism sector, TUI delivered a strong operating performance, a robust balance sheet and growth in its Hotels & Resorts and Cruise core businesses," said CEO Fritz Joussen. Excluding the impact of the 737 MAX grounding, TUI would have reported underlying EBITA of 1.186 billion Euros, matching the prior year's high level, the best result in the history of the company. However, due to the grounding of the 737 MAX aircraft ordered in March 2019, underlying EBITA comes to 893 million euros, down 25.6 percent from the previous year (1.183 billion euros), in line with expectations and the announcement made in the course of the financial year. Holiday Experiences, the core business with hotels, cruises and destination activities, again had a strong performance and an increase in underlying EBITA, now accounting for 74 per cent of TUI's underlying result. The Markets & Airlines business comprising the traditional tour operators, by contrast, continued to face a very challenging market and competitive environment. Apart from the grounding of the 737 MAX, the challenges included a continued Brexit uncertainty, airline overcapacities in Europe and changes in customers' booking behaviour in the traditional tour operating business.
Best regards and enjoy your weekend,
your GCE Team
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