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06.03.2020 – 13:14

Global Communication Experts

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.

Corona update

- 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. 

Market News

- 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. 

Aviation News

- 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. 

Best regards,

Dorothea

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