In the wake of dismal sales reports through the first quarter of 2016 and the expressed belief by many in the travel and tourism industry in Germany, travel agents in Germany are less confident than they’ve been since the trough of the economic recession of 2008-09. According the German travel trade publication fvw and its “sales climate index,” the combination of declining sales in recent months, as well as
the uncertain outlook for the next few months have driven the monthly index for April down by 11.5 percentage points to 83 points. This is the lowest level since April 2009, and down 19 percent from April 2015 when the index was at 103 points.
Conducted in mid-April by consultants Dr Fried + Partner with a travel agency panel, the index is based on: (a) mix of current sales trends, and (b) the short-term outlook. Both figures dropped to 83 points for April. Some specific findings from the survey that generates the index:
—More than half of the survey respondents reported a drop in bookings in recent months
—More than one third described the sales situation as “bad.”
—Just 11 percent believed that demand will improve in the next few months, nearly half expected it to remain unchanged, and 40 percent predicted that demand would continue to fall.
—Only 5.6 percent of those responding predicted rising profits in the coming months while 42 percent expected them to continue falling.
Fortunately, for U.S. travel suppliers and receptive tour operators, the dreary outlook seems not to have seriously affected prospects for Visit USA business. Driven largely by concerns for safety in the wake terrorist attacks in Turkey, northern Africa and the March 22 terrorist attack in nearby Brussels, most German travelers who have altered their travel plans seem to have chosen to take their holidays within Germany itself or elsewhere in Europe—essentially short-haul travel.
As some operators conveyed to the Inbound Report in early March following ITB in Berlin, the U.S. is largely perceived as a long-haul luxury destination, and one makes a decision to travel to the U.S. well in advance. Such a decision is not easily undone.
Also, even in the absence of the fear-of-terrorism factor, travel to the U.S. is projected to be flat or to register modest, single-digit year-on-year increases for the next five years. It is probable that a decline in visitation, year-to-year, would also be modest.