Hospitality and travel - IHK: Tourism industry looks to the future with concern
The tourism industry in Northern Germany looks at the future with concern again. The hospitality sector in particular assesses the business situation in this spring much worse than in the autumn of last year, according to the new tourism report of the IHK Nord. In addition to the persistent issues of costs and labor shortages, businesses also cited economic policy framework conditions.
Correspondingly, the business climate index in the hospitality industry has dropped by almost ten points to 89 points, and in the travel industry by nearly six points to 111 points. The index ranges from 0 to 200 and reflects the mood of the industry. Approximately 560 businesses from the tourism and travel industry participated in the survey of the northern German Chambers of Industry and Commerce (IHK).
One third of the businesses in the hospitality sector expect unfavorable development
In the hospitality sector, 77 percent of the businesses evaluated the current business situation as good or satisfactory, 23 percent as poor. Twelve percent expected a favorable, 34 percent an unfavorable development. The biggest risks identified by the hospitality sector were energy, food, and raw material prices (73 percent) and labor costs (70 percent). Following that were economic policy framework conditions and a lack of labor (both 60 percent). Domestic demand was also mentioned more frequently (35 percent).
In the travel industry, the mood has also slightly deteriorated, but remains overall positive. After the boom with the end of the Corona pandemic, the mood of travel agencies and travel organizers is now stabilizing at a satisfactory level. So, only 14 percent of them evaluated their current situation as poor. However, nearly 23 percent of the businesses expected less favorable business development than the previous year.
IHK: EU plans for package tours alarm the industry
"Many businesses are alarmed by the EU commission's plans to revise package travel law at the European level," said the chairman of the IHK Nord, Bernhard Brons. The EU Commission intends to introduce new rules for package tours. For example, advance payments should not be able to exceed 25 percent of the total price - unless the organizer can justify higher costs. Travelers, who receive a voucher in the event of cancellation, should be informed that they can insist on a refund of the price. If the vouchers are not redeemed before expiration, they should be automatically refunded.
In addition, travel organizers should receive a refund from airlines or hotels within seven days, so they can pass it on to travelers within 14 days. From the perspective of IHK chief Brons, these proposals are not feasible. "We will fight vigorously in Brussels to prevent travel organizers from being held liable for every risk to which a traveler is exposed."
The IHK Nord is a merger of the 133 northern German Chambers of Industry and Commerce in Lower Saxony, Bremen, Hamburg, Schleswig-Holstein, and Mecklenburg-Vorpommern.
The economic situation in Northern Germany's tourism industry is causing concern for the future. The hospitality sector in particular is assessing this spring's business situation more negatively than autumn last year, according to the IHK Nord's tourism report. Over a third of businesses in the hospitality sector expect an unfavorable development.
The IHK Nord survey revealed that while 77% of hospitality businesses evaluated their current situation as good or satisfactory, 34% anticipate an unfavorable future. Energy, food, and raw material prices, as well as labor costs, are identified as significant risks for the hospitality sector.
In the travel industry, the mood has also slightly deteriorated, but remains overall positive, with only 14% evaluating their current situation as poor. However, nearly 23% of travel businesses expect less favorable business development than the previous year.
The EU Commission's plans to revise package travel law have alarmed the industry, according to Bernhard Brons, the chairman of the IHK Nord. The proposals, such as limiting advance payments and refunding vouchers if not redeemed, are seen as not feasible by IHK Brons, who pledged to fight against travel organizers being held liable for risks.
The IHK Nord is a merger of the 133 northern German Chambers of Industry and Commerce in Lower Saxony, Bremen, Hamburg, Schleswig-Holstein, and Mecklenburg-Vorpommern, contributing to the overall economic situation and business climate in Northern Germany's tourism and hospitality industry.
Associations in regions like Hamburg, Schleswig-Holstein, and Mecklenburg-Western Pomerania play a crucial role in addressing the challenges faced by the tourism and hospitality industries. They work towards improving the business environment, addressing issues like costs, labor shortages, and economic policy framework conditions.
In the current economic climate, attracting tourists to northern German cities like Bremen and promoting tourism and business opportunities within the region becomes even more essential. Efforts to stimulate tourism, such as cooperative ventures between associations, local businesses, and governments, can catalyze the recovery of the hospitality industry, aiding economic growth and strengthening the local economy.
