Whatever the cause—whether it was or is a strong U.S. dollar vs. the Euro; a disinclination to the travel to the USA because of a dislike of U.S. president Donald Trump; a severe disruption in holiday travel to traditional Mediterranean destinations due to terrorist; or a low birthrate that is shrinking the population of key travel age groups—visits to the United States from Germany have struggled to stay in place.

The above has pretty much turned into a generic description when one discusses or describes the German travel market, whether it involves overseas long-haul travel, travel within the Eurozone and its short-haul international destinations, or travel within Germany itself. The latest data for travel to the United States, even though it is just one measure of the health of the market, tend to confirm what seems to be happening in both wholesale and retail segments.

First, here is a look at German arrivals in the USA for the first six months of 2019, compared to the first six months of 2018. There is, essentially, no growth in that number, as the table below suggests.

Second, here are some points noted in the German travel trade publication FVW indicating that the retail sector of the industry more or less mirrors the performance of the tour operator sector—the latter being a more reliable indicator of long-haul travel than that serviced by travel agents. As reported by FVW,

—The German travel industry is staging a gradual recovery with more customers booking last-minute holidays in July–this according to the latest monthly Travel Insights sales analysis. *

—Bookings through travel agencies and online channels increased by 3 percent last month, meaning that summer 2019 revenues are now just one percent behind last year on a cumulative basis.

—July’s growth vs. the same period last year “was clearly driven by last-minute summer holiday bookings.”  One third of all bookings last month were for departures in July and August. As a result, the cumulative decline in July departures was reduced to one percent and for August a half percent.

—The overall 2018/19 tourism year is now up by one percent in revenue terms—a number driven primarily last winter’s higher sales. Overall, the summer of 2018 was a very strong season with bookings up by 13 percent vs. the same time last year.

—However, early demand for the coming winter season looks weak so far, said FVW, noting that sales revenues for winter 2019/20 are 5 percent less, on a year-on-year basis, and bookings are down for nearly all departure months.

*The data in the Travel Insights survey are a result of an analysis of sales by 2,000 representative travel agencies, OTAs and tour operator websites by Travel Data + Analytics. Founded earlier this year, Travel Data + Analytics took over the Travel Insights survey from the market research firm GfK. Both companies are based in Nuremberg, Germany.

 

With preliminary figures for the first half of 2019 showing that visits to the USA by German travelers were flat (actually, they were negative, down by one-tenth of a percent vs. last year), tour operators have been working on moving 2020 packages off the shelf. And German retailers, fortunate to have had a good year so far with recovering Mediterranean destination traffic, are trying to salvage the rest of the year.

Perhaps the authoritative source on the condition of the market, TUI, Europe’s largest tour operator, which is headquartered in Hanover, German, had this to say in its just-issued (August 3) quarterly report: “We expect improvement in summer trading as we lap the height of last year’s heatwave. Bookings and margins have improved year-on-year over the most recent weeks, however pricing remains behind cost ­inflation, therefore we continue to anticipate margins to be lower than prior year.”

Sales revenues remained negative in July, with the Tats-Reisebüro-Spiegel (Tats = Travel Agency Technology and Services) reporting that the invoiced total turnover of German travel agents was minus 1.9 percent in the month of July 2019 compared to the same month of the previous year, and that  billed tourist sales showed a minus of 5.5 percent in July.

The German travel trade publication FVW, said however that activity should return to the “plus zone“ later this year. It also noted that some travel companies have launched late season offers to stimulate end-of-season sales.

Part of the challenge for any industry sector this year is the emerging evidence that the country is about to enter—if it has not already entered—an economic recession. As the Washington Post put it a week ago: “The German economy shrank 0.1 percent in the second quarter after anemic 0.4 percent growth at the start of the year. Two consecutive quarters of negative growth is the technical definition of a recession, and Germany is nearly there, sparking fears of an official recession by the end of the year.”

Meanwhile, the latest data posted by the U.S. Department of Commerce’s National Travel and Tourism Office (NTTO), showed the following numbers on German travel to the United States so far this year:

 

According to the German trade publication FVW’s just published Travel Sales Dossier 2019, which contains a look a look at overall 2018 figures, travel agency sales lost momentum in the spring and closed the business year with moderate growth of just 2 percent to €26.9 billion ($30.2 billion), according to estimates by Werner Sülberg, head of the DRV market research committee. The estimates were based on figures in the fvw dossier and a survey of 40,000 consumers by the Nuremberg-based research firm GfK (Gesellschaft für Konsumforschung, or Society for Consumer Research). At the same time, the online sales market—it covers bookings made through online travel agencies (OTAs), tour operators and travel agencies grew by 13 percent to 13 percent to €29.3 billion ($32.9 billion). Online sales now account for about 43 percent of the total €67.9 billion ($76.1 billion) German leisure travel market, while “offline” sales have a declining 57percent (€38.6 billion/$43.3 billion) market share.

As the above table indicates, the top company is DER Touristik (which also claims, at times, to be the top seller of overseas or long-haul travel to Germans), which increased overall sales by 7.1 percent to €4.95 billion ($5.55 billion). Its leisure travel revenues grew jumped by 10 percent to €3.7 billion ($4.2 billion), while business travel revenues dropped slightly to €1.24 billion ($1.4 billion).

As far as one could tell—based on the trade and business news media coverage of this year’s ITB early last month—the outlook for the German tour and travel industry’s overseas outbound sector this year is one that is, at best, modestly hopeful. This was very much the same as it was last year and, if the forecasters at the U.S. National Travel and Tourism Office (NTTO) are on target (and they usually are), it is very likely what it is going to be for the next several years, insofar as arrivals in the U.S. are concerned. A recap from NTTO’s most recent long-term forecast for inbound U.S. visitor traffic from Germany shows the following.

In Germany itself, as reported by the travel trade publication fvw, bookings of summer 2019 holidays in travel agencies and online grew by 1 percent this February compared to February 2018. The cumulative decline for all bookings since last November was reduced to -1 percent as a result, the market researcher GfK’s analysis of sales by 2,000 representative travel agencies, OTAs and tour operator websites showed. Other points noted from the GfK report:

 —About one quarter of all bookings in February were for trips in May and June and a further quarter for July and August.

 —However, the two peak summer holiday months are still in negative territory overall. Bookings for July are currently 1.9 percent behind last year while August is 1.6 percent lower than at the same time last year.

 —The latest data should bring some relief to the tourism industry following three consecutive months of negative growth for summer 2019, including a 9 percent decline in January. However, it is still unclear whether the slight rise in February signals the start of a stronger recovery or just a brief respite.

                                                Source: GfK Travel Insights

 

 

—Meanwhile, there were strong late bookings of winter holidays in February with a 7 percent increase that cancelled out a 6 percent decline drop in January. Growth for winter 2018/19 remained at 4 percent on a cumulative basis