Strong demand for vacation travel

Tourism - Strong demand for vacation travel

Business with the best weeks of the year is back in full swing after the tough coronavirus years. Tour operators are reporting strong bookings so far. German airlines are reasonably relaxed about the new year, even if seats remain scarcer than in other European countries. However, holidaymakers should not hope for price reductions. "Ticket prices will remain high - just like other prices," announced Lufthansa CEO Carsten Spohr recently.

According to the German Travel Association DRV, prices for package tours are likely to rise only moderately - if at all. However, the increase in air traffic tax planned by the German government could make summer vacations significantly more expensive for many millions of people in Germany, warns association president Norbert Fiebig. Before the plans were announced, several major tour operators were expecting average price increases in the mid-single-digit percentage range. The German Tourism Association expects similar increases for trips between Rügen and Mittenwald.

According to the DRV, travel agencies and tour operators have recorded a normal travel year for the first time since coronavirus. "Driven by an excellent summer season, tour operator sales exceeded those of the record year 2019. Early bookers are back and so are package tours," reports DRV President Fiebig.

Guest numbers are still lagging behind

However, not everyone was able to afford a tour operator trip due to high inflation. According to data from the analysis company TDA, the number of holidaymakers in the past tourism year 2022/2023 was still 15 percent lower than in 2018/19.

In view of strong demand for the coming summer season, the industry is confident that it will also catch up in terms of guest numbers. Industry leader Tui expects the number of its customers in the current travel year to climb back to the 2019 level.

Industry runner-up DER Touristik is particularly optimistic about the summer season. "With Dertour and its sister brands ITS and Meiers Weltreisen, we are currently heading for the best summer we have ever had in terms of customer numbers," said Ingo Burmester, Head of Central Europe at DER Touristik Group, recently.

Schauinsland Managing Director Gerald Kassner expects the package tour business to be strong. "The demand for vacations remains high," he said at the end of November. Alltours boss Willi Verhuven takes a similar view: "People want to get away from their everyday lives. They want to travel, despite and precisely because of the many crises." This trend is likely to continue in the coming year.

Confidence also prevails in German tourism. "The mood and booking situation for 2024 is very good so far," reports Norbert Kunz, Managing Director of the German Tourism Association.

Airline association predicts increase in profits

German airlines are reasonably relaxed about the new year, even though the traffic light coalition chose an increased ticket tax as an additional source of funding shortly before the end of the year. This will make air travel even more expensive, although details are still lacking. According to forecasts by the airline association IATA, profits will continue to rise moderately both globally and in the individual European market. For 2024, IATA chief economist Andrew Matters expects European airlines to make a profit of 7.9 billion dollars (7.3 billion euros) after 7.7 billion dollars in the current year.

In the German market, the supply of seats remains tighter than in other European countries, but prices are not falling on a global scale either. Although tourism providers in particular are launching more flights, the overall supply in Germany remains significantly below the figures from the last pre-corona year 2019. According to an analysis by the German Aviation Association (BDL), the number of seats available up to and including May 2024 will only reach 84% of the 2019 level. In the rest of Europe, on the other hand, 102% is expected.

The Lufthansa Group, by far the largest provider, wanted to increase its capacity by around 10 points to 95% of the pre-crisis level in 2024, but will have to cancel flights again due to a lack of personnel, aircraft and handling capacities in order to keep operations stable. After sharp price increases in 2023, CEO Spohr has already prepared the public for constantly high ticket prices because supply continues to lag behind demand. The higher ticket tax will now be added on top for all passengers departing from a German airport.

Return of the low-cost airlines

At best, the large direct airlines such as Ryanair, Wizz and Easyjet, which tended to avoid German airports with their high fees last year, could ensure more flights. Industry leader Ryanair wants to increase its passenger numbers from the current 184 million to more than 300 million by 2034 and will not be able to do without the German market.

Air traffic control chief Arndt Schoenemann therefore expects the low-cost airlines, which are currently limited to a few German airports such as Nuremberg, Cologne and Hahn, to return soon. For the time being, however, the Irish are struggling with the consequences of the delivery problems at US manufacturer Boeing and, like most airlines, have fewer aircraft than they would like.