06.03.2020 – 13:14
GCE news mail: German market news week 10
German market news week 10
Good morning and hello,
today, our weekly newsletter starts a bit different than usually. First of all, I would like to let you know, that not only I but many other colleagues from our team traveled within Germany and we met media and trade partner to receive a good impression about their opinions. Many are unhappy about the cancellation ot the ITB, but do not see an impact on the business by this decision. Certainly, Corona itself is influencing our business.
I had the opportunity to meet the President and the Managing Director of the DRV - the German travel and tourism association – in Berlin: They think that the people will be back in the travel agencies and start again booking their holidays quite soon after the media hysteria has calmed down, we only need to be a bit patient, because any short-term activities now will not generate success. They expect that the situation will develop positively end of March.
The leading German business newspaper Handelsblatt commented today: “Citing the title of German filmmaker Rainer Werner Fassbinder, Fear Eats the Soul, the weeks of Covid-19 have shown exactly this. Human fear has been eating away at the overall welfare of the people, as many Germans are hoarding day-to-day items such as toilet paper and disinfectants. Along with the fact that trade fairs, large public events and trips are being cancelled. Fear of Corona is like fear of terrorism, according to behavioral economist Dan Ariely. Even though more people die every day due to traffic related accidents than from the Coronavirus, which is the new media plague, people continue to get back on a bicycle and behind the wheel. According to German Psychologist Gerd Gigerenzer: ‘People driven by fear will put themselves in even more danger.’ As was the case with SARS, the swine flu and the bird flu, in a few weeks the whole thing will be forgotten, but not the recession that everyone will have to deal with.” This reflects, what many people think
76% of Germans are not afraid of the Corona Virus: Infratest dimap, a German institute and company that offers political research, stated that the latest representative opinion poll by the 1st German television yesterday showed that 76% of Germans are not afraid of the Corona Virus. At the same time, 75% are more attentive to everyday life and wash their hands more often. 43% said they would be attending fewer major events during these weeks and limit travel. Crisis management in Germany continues to be viewed positively by the citizens: According to two thirds, the German authorities and health institutions have the situation under control. With the spread of the coronavirus, economic worries have grown. Corona has been missing from the front pages of the daily newspapers since Wednesday. The dominant theme of the major media, including television news, is the war in Syria, the wave of refugees and, above all, the decision by Turkish President Erdogan to open the Turkish border to Greece for refugees to Europe. Since last weekend, thousands of refugees have been on the Greek-Turkish border to enter the EU.
- ITB: After the late cancellation of ITB Friday evening, it’s still in discussion if that was the right decision or not. It is unclear who will cover the different costs resulting from the cancellation of ITB. Messe Berlin will have to refund stand rental fees to exhibitors, while exhibitors have been left all kind of other costs, such as for travel and accommodation, staffing and events. Many ITB visitors booked hotels rooms at non-refundable rooms at non-refundable rates, for example. - Messe Berlin launches 'virtual ITB' website: ITB Berlin is going online with the launch of a new platform under www.itb.com (http://www.itb.com) to offer news, networking and an ITB Virtual Convention to the global tourism industry. The ITB Virtual Convention kicked of yesterday (March 5) and runs until March 11, 2020 with more than 20 exclusive live streams and videos on demand. Messe Berlin announced yesterday morning that despite the cancellation of the ITB Berlin trade fair it will offer digital services 365 days a year by launching itb.com as a completely new networking platform for the world’s travel industry. This global website spans a bridge between real-life meetings and digital networking, and features innovative tools for business, networking and exclusive content. “In these very difficult times the tourism industry needs ITB more than ever,” said Dr. Martin Buck, Senior Vice President, Travel+Logistics, Messe Berlin GmbH. “By launching this new website we are establishing a key platform and travel network which has no parallel and which can be made use of in every market around the world. The aim is to ensure business, content and networking availability 365 days a year.” In the ITB Virtual Convention, leading speakers will be discussing how the world’s travel industry can harness intelligent strategies to make sure it remains future-proof even in a challenging environment. In the wake of the latest developments, discussions on how the industry can deal with the coronavirus will play a key role. The AI-based Travel Network is a self-teaching system which continually offers users relevant travel industry contact information. All registered attendees at ITB Berlin 2020 may access the Travel Network. - Don't panic travellers, tourism chiefs urge: Global tourism leaders are calling on governments and consumers not to panic and over-react to the coronavirus crisis as more and more destinations ban visitors from countries or areas affected by the rapid spread of the coronavirus. Israel has banned all visitors from Germany, Austria and Switzerland with effect from Friday unless they go into self-quarantine for 14 days. In the US, many travel agency customers are reportedly cancelling international trips to Europe (mostly Italy) and Asia. Tourism chiefs in big destinations are preparing for the worst. Italy, for example, has been hard hit by cancellations, especially to Venice, Milan and other parts of the north. New York City fears a 26% drop in Chinese visits this year. The US Travel Association warned that inbound international travel could plummet 6% over the next six months. President and CEO Roger Dow said: “It’s important to keep in mind that the restrictions and warnings are highly specific to countries where there have been pronounced outbreaks. Right now, there is absolutely no official guidance that people need to be reconsidering travel in the U.S.” In Europe, tour operators and travel agents called for “proportionate” measures to protect travellers. ECTAA president Pawel Niewiadomski said: “Travel restrictions going beyond what’s required to control the spread of the virus may cause unnecessary reductions of international travel.” - Coronavirus costs tourism at least 20 billion euros: The analysts from Boston Economics are forecasting this on the basis of experience with the Sars virus, but only in the best case. Should the crisis last as long as with sars, more than twice as much would be due. In the worst case, the experts put the costs at more than three times the amount. In an interview with the Spanish newspaper "El Mundo", the president of the World Travel & Tourism Council (WTTC), Gloria Guevara, warned against an overreaction that could make the situation worse. If, for example, ten communities in northern Italy are affected by the virus, as is currently the case, there is no reason to warn against travelling to Italy in general. "90 percent of the cost is not caused by the outbreak itself, but by panic reactions," Guevara told the newspaper. She advised people to base their travel plans on the recommendations of the World Health Organization, the WTTC president continued. On Thursday, the Word Travel & Tourism Council and the World Health Organization (WTO) issued a joint statement calling for appropriate and consistent measures to control the spread of the virus while maintaining the global flow of travel. The interaction of private, public, global and local organisations is crucial in this respect.
- Tourism chiefs see "challenging" year ahead as demand weakens: As stated by fvw, the German travel industry is facing a tough year with summer holiday sales already 3% down on last year and the coronavirus outbreak now starting to impact on travel demand, according to industry chiefs. German consumers are holding back with their bookings, according to the latest figures from market researchers Travel Data + Analytics (TDA). Sales revenues for both the current winter season and summer 2020 are 3% lower on a cumulative basis, as of end-January. Bookings for summer 2020 are down by 9% but average spending per package holiday is 3% higher, TDA said. The big question now for the German travel industry is how the rapid spread of the Covid-19 virus from China to parts of Asia, Europe and the Americas will impact on bookings over the coming weeks. “We can certainly observe a rising uncertainty among holidaymakers and business travellers,” admitted Norbert Fiebig, president of the German Travel Industry Association (DRV), at a pre-ITB press conference last week. “This is creating an additional need for advice from travel agents and tour operators.” - German holiday bookings slump: According to fvw, summer holiday bookings in Germany have slumped dramatically over the past few weeks as consumers worry about whether their destination will be safe. Sales crashed by a third alone in the final week of February, affecting destinations worldwide, new figures show. Bookings have tailed off since the beginning of February, when the Covid-19 virus had already hit large parts of China and was starting to spread internationally. Figures from market researchers TDA showed a clear drop in new bookings through travel agencies and online portals in the continent’s biggest outbound market. The TDA sales index rose from 100 points in the first week of January to 180 in the third week of the year but dropped back to 85 points at the end of February. Bookings crashed by 37% in the final week of February compared to the same week last year. Nearly all destinations have been impacted by weaker demand, according to TDA figures. Worst-hit is the Western Mediterranean (-42%) followed by Central and South America (-40%), North America (-37%), Asia/Australia (-34%), Eastern Mediterranean and Africa (both -33%) and the Caribbean (-30%). Even bookings of self-drive holidays to nearby European destinations are down by a third. These figures were confirmed by the latest monthly travel agency sales figures from IT services firm TATS. These showed a 23.3% drop in sales revenues for February with flight ticket sales crashing by 37%. More positively, leisure travel sales were up by 1%, including a 5% increase in cruise bookings. Europe’s biggest tour operator, TUI Group, already confirmed that it had a sharp drop in bookings last week. - South-East Asia tackles virus crisis: Destinations in South-East Asia are urgently drawing up plans to combat the spread of coronavirus and the resulting slump in international tourism, especially from China. Several countries, including Singapore and Malaysia, have already announced investment programmes to stimulate their economies, while Thailand and Indonesia may follow. Thailand reportedly had a 40-60% fall in international arrivals in February. The Tourism Authority of Thailand (TAT) emphasised to fvw that the Thai tourism industry is doing “everything possible” to strictly implement preventive measures to protect visitors and Thais from being exposed to the virus. International media reported on Thursday that visitors from various countries, including Germany, Italy, France, China, South Korea and Japan, had been advised to stay in their hotels for two weeks after arriving in the country. But TAT clarified: “Thailand does not recommend any travel or trade restrictions against China or other affected areas. Also to date, the Thai government has not made any official announcement regarding self-quarantine for travellers from affected areas”. The Singapore Tourist Board (STB) has announced a package of measures to support the tourism sector, including wage support for tour guides and reduced training fees. Chief Executive Keith Tan said: “While this is a tough time for tourism, we must position ourselves for a strong recovery. I urge tourism businesses not just to retain their workers, but also to take advantage of the support measures to help them build new skills and capabilities. With the industry’s support, I am confident we will be quick off the blocks when the situation improves.” In its most recent Covid-19 update, Tourism Malaysia highlighted: “Tourist attractions in Malaysia are safe to be visited. All tourist attractions in Malaysia are operating as usual.” Authorities in Indonesia are also working hard to reassure travellers that the country is safe to visit. - Balearics suffer visitor slump: As stated by fvw, The number of international tourists visiting Majorca and the other Balearic Islands has fallen dramatically, according to regional tourism authorities. Fear of the coronavirus but also the consequences of the Thomas Cook insolvency are being blamed. The number of foreign tourists on Majorca, Menorca, Ibiza and Formentera dropped by 27% in January, figures from the Spanish statistics office INE showed. German visitor numbers declined by 22%, although they still made up more than half of all foreign tourists. A spokesman for the Balearic Islands tourism ministry blamed tourist fears following the outbreak of the Covid-19 virus for the decline along with fewer flight connections following the collapse of Thomas Cook and also the impact of hurricane Gloria on the Spanish mainland. However, the number of Spanish tourists on the islands went up by 10% in January. Regional tourism minister Iago Negueruela was due to travel to Berlin this week to meet the major German tour operators and discuss the latest developments.
Tour Operator News
- German tour operators offer flexible cancellations: According to fvw, leading tour operators in Germany are offering customers flexible options to change summer holiday bookings or make cancellations in the next 6- 8 weeks. TUI Germany, DER Touristik, FTI, Alltours and Schauinsland-Reisen have all announced similar measures for customers who do not want to go on their booked holidays because of coronavirus concerns. Customers can change bookings up to 14 days before departure but with deadlines up to the end of April. TUI Germany said customers could re-book or cancel free of charge up to 14 days before departure up to April 30. This applies to all bookings between February 29 and April 18. DER Touristik customers can re-book or cancel bookings made between March 2 and April 30 with planned departures between March 2 and October 31 free of charge up to 14 days before departure. At FTI Group the option applies for bookings between March 1 and April 18 for departure between March 1 and October 31. Changes or cancellation must be made by April 30 at the latest. Alltours and Schauinsland-Reisen have similar offers with slightly different deadlines.
- Lufthansa Group cancels all flights to Israel due to new en-try regulations: - All flights to Tel Aviv and Eilat will be cancelled as of next Sunday for the next three weeks - Lufthansa cancels about 7,100 European flights in March The extended refusal of entry of the Israeli authorities, which apply from 6 March among others also for travellers from Germany, Switzerland and Austria, will lead to a considerable drop in demand for flights to Israel. As a result, Lufthansa, SWISS and Austrian Airlines will cancel all their flights to Tel Aviv and Eilat as of Sunday 8 March 2020 for the remaining winter timetable period until 28 March. The Lufthansa Group sees itself forced to make this cancellation for economic and operational reasons, as many passengers are no longer entitled to enter the country. For operational reasons, some flights to Tel Aviv this Friday and Saturday have already been cancelled, as also flight crews are affected by these new restrictions. All airlines mentioned above usually offer a total of ten daily flights to Tel Aviv, in addition Lufthansa has one scheduled weekly service to Eilat. Lufthansa: 7,100 European flights cancelled in March Due to the exceptional circumstances caused by the spread of the coronavirus and the decline in demand, the Lufthansa Group has also decided by reducing capacity by up to 25 per cent. The route cancellations and frequency adjustments correspond to a calculated capacity of 150 aircraft, of which 125 are short- and medium-haul and are 25 long haul. The Lufthansa Group fleet currently comprises around 770 aircraft, including some 180 long-haul aircraft. Starting on 5 March, the route cancellations and frequency adjustments will be implemented successively and the passengers affected will be informed about the changes and rebooking options. Until the end of March, Lufthansa is cancelling a total of about 7,100 flights (including 3,750 flights from Frankfurt to 75 airports, and 3,350 flights from Munich to 65 airports). The focus is on domestic flights from the Frankfurt hub to Berlin, Munich and Hamburg as well as from Munich to Berlin, Hamburg, Düsseldorf, Cologne, Bremen and Hanover. These are high-frequency connections, some of which are operated up to every half hour by Lufthansa. This means that numerous rebooking options are available. A second focus of the route cancellations and frequency adjustments is Italy. This includes the destinations Milan, Venice, Rome, Turin, Verona, Bologna, Ancona and Pisa. Lufthansa passengers are advised to inform themselves about the current situation of the respective flight via lufthansa.com before departure. Guests who have submitted their contact details to Lufthansa will be proactively informed of the cancellations. This is because in addition to domestic German and Italian connections, other flights to Scandinavia, Great Britain, the Baltic States, Poland, Russia, France, Spain, Portugal, Great Britain, etc. are affected. When cancelling routes, Lufthansa has taken into account the fact that all European destinations will continue to be serviced, so that in most cases customers can be offered a suitable alternative. In addition, the airline had already decided last week to suspend flights from Germany to mainland China until 24 April inclusive. The connection to Tehran will remain cancelled until 30 April. Lufthansa is also reducing frequencies in its route network to and from Hong Kong and Seoul (Korea), among others. Flights between Munich and Hong Kong will be suspended between March 6 and April 24. Passengers will be rebooked via Frankfurt and Zurich if possible during this period. Between 5 March and 24 April, some frequencies will also be cancelled on routes from Frankfurt and Munich to Seoul. In addition, the Lufthansa Group has announced further cost-cutting measures in the areas of personnel, materials and project budgets. It is not yet possible to estimate the impact on earnings expected from current developments. The Group will publish key financial figures at its annual financial results press conference on 19 March 2020. - Lufthansa Group continues to suspend flights to China and Iran - Flights to mainland China are suspended until 24 April, to Tehran until 30 April - Frequencies to Italy, Seoul and Hong Kong are also reduced The safety of its passengers and employees is the top priority of the Lufthansa Group. After a thorough assessment of all currently available information on the Coronavirus, Lufthansa Group has decided to continue to extend the suspension of flights between Germany, Switzerland, Austria and mainland China by Lufthansa, SWISS and Austrian Airlines until 24 April. Flights to Tehran will remain suspended until 30 April. Additionally, Lufthansa Group airlines are reducing additional frequencies in their route network to and from Hong Kong and Seoul (Korea). Flights between Munich and Hong Kong will be suspended between 6 March and 24 April. Passengers will be rebooked via Frankfurt and Zurich as far as possible during this period. Between 5 March and 24 April, some frequencies will also be cancelled on routes from Frankfurt and Munich to Seoul. Italy is another focus of capacity reduction. Lufthansa is adjusting its services to Northern Italy to meet changed demand. Lufthansa is adapting its offer to the changed demand and will reduce frequencies on various routes to Italy in March. This includes the destinations Milan, Venice, Rome, Turin, Verona, Bologna, Ancona and Pisa. In addition, frequencies on domestic routes from Frankfurt to Berlin, Munich, Hamburg and Paderborn and from Munich to Berlin, Hamburg, Düsseldorf, Cologne, Bremen and Hanover will be reduced. SWISS will probably reduce flight frequencies to and from Florence, Milan, Rome and Venice until the end of April. Austrian Airlines is reducing its flight program to Italy in March and April by 40 percent. This includes reductions of flight frequencies on routes from Vienna to Milan, Venice, Bologna, Florence, Rome and Naples. Eurowings is reducing its flights to and from Venice, Bologna and Milan until 8 March. Eurowings flights to other destinations in Italy are currently not affected. For its Italian route network, Brussels Airlines has decided to reduce its flights to Rome, Milan, Venice and Bologna by 30 percent until 14 March. Passengers are requested to check their flight status on the airlines’ websites. Passengers who have provided their contact details will be informed by SMS if their flight is affected due to the Coronavirus. These scheduling changes are part of the capacity reduction announced by Lufthansa Group last Friday (28 February). Accordingly, the availability of short- and medium-haul flights may be reduced by up to 25 percent in the coming weeks depending on further developments in the spread of the Coronavirus. Lufthansa Group airlines are also continuing to reduce their long-haul flight program. Mathematically speaking, the number of Lufthansa Group long-haul aircraft not in operation will increase from 13 to up to 23. Lufthansa Group has also announced further cost reductions in the personnel area as well as for material costs and project budgets. It is not yet possible to estimate the expected impact on earnings from current developments. The Lufthansa Group will publish key financial figures at its annual press conference on 19 March, 2020. - Airlines slash flights and call for government help: As fvw reported, international airlines are cutting even more flights and appealing for aid as passenger bookings slump in response to the worldwide spread of the coronavirus. Flight bookings in Germany dropped by a third in February, according to figures from travel agency services provider TATS. Major carriers have suspended most flights to China and several are starting to scale back services to South Korea and Italy. Among big players, British Airways has cancelled 200 flights in March, including to European destinations and some US flights as demand tumbles. It is now offering free re-bookings to alternative routes. Ryanair will cut capacity to and from Italy by 25% for the next three weeks and Easyjet is also reducing services to Italy. Lufthansa has cut various short-haul and medium-haul services as bookings slow down. Lufthansa CEO Carsten Spohr said the airline, which has grounded 23 long-haul planes, expected to reduce short-haul capacity by 25% in the next few weeks. “The outlook depends heavily on developments in Europe in the next few days,” he warned. Ryanair chief Michael O’Leary said he expected very weak demand “in the next two or three weeks” but a normalisation by the summer. In response to this dramatic situation, IATA has called on authorities worldwide to suspend airport slot usage rules immediately and for the summer 2020 season to prevent airlines that have suspended flights from losing their traffic rights in the coming months. The association said on Wednesday that worldwide passenger traffic growth slowed to 2.4% in January. “January was just the tip of the iceberg in terms of the traffic impacts we are seeing owing to the COVID-19 outbreak, given that major travel restrictions in China did not begin until 23 January. Nevertheless, it was still enough to cause our slowest traffic growth in nearly a decade,” said Alexandre de Juniac, IATA’s Director General and CEO.
Global Communication Experts GmbH Hanauer Landstr. 184 60314 Frankfurt p: +49 69 17 53 71-00 f: +49 69 17 53 71-011 m: firstname.lastname@example.org w: www.gce-agency.com www.twitter.com/GCE_agency www.facebook.com/GCEagency www.instagram.com/GCE_agency GCE is member of Pangaeanetwork Geschäftsführer: Dorothea Hohn, Ralf Engelhardt Firmensitz: Frankfurt