Following what the German travel trade news media called the “Lost Year” of 2016, when outbound travel to the United States dropped by more than 10 percent over the previous year, the market began a recovery in 2017—as confirmed by the recent release of full-year figures for the year from the U.S. National Travel and Tourism Office—and, on the basis of the latest figures by German travel agencies through last month, sales for 2018-19 winter holidays (which usually have a sizable long-haul component) are outstripping those for last year.
Image: GfK/FVW
Part of the optimism that one detects in demand from German lay in the fact that more than a much-feared “Trump Slump” in 2017 due to German distaste for U.S. President Donald J. Trump, there was a comfort level on the part of the consumer driven by the fact that the exchange rate between the U.S. dollar and the euro has been stable for the last year—at or near $1.17 for the past 12 months. This has meant stable prices for all parts of the distribution system, including the German consumer, German travel agencies, German tour operators and U.S.-based receptive tour operators who sell product to Germany.
As reported by FVW, some highlights of the latest monthly report put out by the Nuremberg market research organization GfK (Gesellschaft für Konsumforschung, or Society for Consumer Research), which analyzed sales by 2,000 representative travel agencies, include the following:
- German travel agents and online travel agencies (OTAs) had a good month in August, with total sales up by 6 percent compared to the same month last year thanks to solid demand for all three seasons (summer 2018, winter 2018/19, summer 2019) that are currently on sale. There were diverging sales trends between online and offline sales channels, however.
- Total sales revenues for summer 2018 trips grew by 3 percent in August. Overall, summer 2018 is 12 percent ahead of last year in revenue terms while the number of bookings is 7 percent higher than last year’s total. With two months still to go, this means that summer 2018 will clearly close showing strong growth compared to 2017.
Summer sales last month were clearly driven by OTAs selling late holidays while travel agents’ revenues for the summer season declined.
- Summer bookings made up 73 percent of OTA revenues in August but only 44 percent of travel agency sales.
- In contrast, travel agents were busy selling winter holidays as well as taking early bookings for next summer. Sales covering the forthcoming winter season (November to April) made up 40 percent of their revenues last month while summer 2019 accounted for 16 percent, according to GfK.
- Overall, winter 2018/19 accounted for more than one third of total sales in August, pushing cumulated growth up to 9 percent. In terms of departure months, more than half of winter sales revenues to date are for trips in November (+8 percent) and December (+11 percent).
- With Easter in April next year (Easter Sunday is April 21), there is a typical seasonal trend in the relatively low booking numbers, with April revenues up by 7 percent but March is down by 11 percent.
