January was a catastrophe for holiday bookings on the German market with a 12% decline but experts are still hopeful that the summer season can be saved.
Normally the strongest month for summer holiday bookings, January showed a 12% year-on-year fall in sales, according to the monthly GfK Travel Insights representative survey which analyses some 340,000 bookings made at 1,200 travel agencies. This represents €260 million less in revenues for tour operators and travel agents than in January 2015.
The figure, which follows an 8% drop in December, confirms comments from tour operators and travel agents in recent weeks about the slump in demand following terror attacks in major travel destinations and as worried consumers hold back with bookings due to fears about safety and security.
Summer 2016 sales are now 8.6% behind last year on a cumulative basis and all months are showing negative trends, the GfK survey showed. August is the worst hit with a 22% drop in bookings compared to the same time last year, although July has a moderate drop of only 1.1%.
Demand for winter holidays was also weak last month with a similar 12% drop in sales year-on-year, leaving low cumulative growth of 1.7% for the winter 2015/16 season.
Yet there are some positive signs amongst the “depressing” figures, according to GfK. Last month travel agencies reached 40% of the previous year’s total summer season revenues, just three percentage points lower than the figure achieved in January 2015. Moreover, the current summer season sales volumes are still higher than at the same time two years ago, the market researchers pointed out.
“Even though there are no signs of a changing trend based on the weekly sales figures in January, the losses can still be compensated or at least reduced,” GfK wrote. “The condition is that German holidaymakers abandon their current caution with bookings. In terms of the consumption climate, there is nothing to stop this.”
Unsurprisingly, German travel agents remain cautious about sales prospects for the coming months. As many as 40% had lower revenues in the last 2-3 months and only 27% increased sales, according to the latest monthly fvw ‘sales climate index’.
Just one third describe the current sales situation as good, nearly half as satisfactory and the rest as bad. Looking ahead, an optimistic 22% of agents surveyed expect sales to improve in the coming months while 53% expect stable demand.
