The headlines said it all. Coming off the 2016 edition of ITB at the beginning of March, the vibe among German travel agents and tour operators seemed to be all right. Then, from the leading German travel trade publication, FVW, came a post-ITB edition with this—“TUI Group: Low growth as destination switching continues” and this—“THOMAS COOK: Hoping for late bookings”
As if the terrorist bombings that killed German tourists in January in Turkey weren’t enough, March 22nd came and so did the suicide bombings of ISIS supported terrorists that killed more than 30 people in Brussels—some at the city’s airport and others inside and about a major subway stop. The Brussels attacks, taking place not too far from Germany’s northwestern border with Belgium, seemed to dash whatever optimistic tone had been sounded in the tour and travel industry’s consensus notion that German travelers would shift their holidays to other European destinations, including Germany itself and avoid Turkey and the Middle East.
At TUI, Europe’s largest tour operator, CEO Fritz Joussen came across as fruit vendor trying to polish an apple before putting it in a fruit stand, explaining to FVW that his company is experienced a 2 percent, year-year-increase across all source markets and a three percent increase in revenues, due to a one percent improvement in average selling prices. And while he cited an increase in long-haul demand, he quoted no figures to attest to such demand.
For Thomas Cook Germany, the company’s latest trading update was not encouraging. The company is hoping for a wave of late bookings to boost summer sales, which are currently 5 percent behind last year, with declines in both Germany and the UK. At the time of the update, TUI had sold 40 percent of its overall summer 2016 program, which was 2 percent lower than at the same time last year.
“Thomas Cook continues to operate in a volatile market environment,” CEO Peter Fankhauser told FVW, adding, “We know that customers want a summer holiday but we can see that some are leaving it later to book this year as they consider their options.”
What this Means for the USA: There are no readily available data—and there won’t be for some time—that can tell us if the expected destination switching in Germany will have an impact on travel to the United States. However, the feedback picked up by the Inbound Report following ITB indicated that the United States could expect an increase in business from Germany, mostly because the exchange rate between the U.S. dollar and the euro had leveled off during the past two quarters and some segments of the market were ready to switch to long-haul product that includes the U.S.
The last official forecast for travel to the United States from abroad issued by the U.S. National Travel and Tourism Office (NTTO) had projected a slight, two percent increase in Visit USA traffic from Germany to the United States from 2015 through 2016. Measuring the accuracy of this projection is problematic since NTTO has been unable to get the raw data it uses to make its forecasts from the U.S. Department of Homeland Security, which processes the information. Delivery of the data is more than a half-year behind and it will likely be late summer of this year before NTTO gets its full-year data for 2015 from Homeland Security
