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Germany Market Profile

In Germany, where traditional tour operator bookings outnumber travel online travel agency bookings four to one, Visit California’s dollars invested in travel trade go a long way. Despite the projected slow in travel in the short term, potential for growth still exists in a country that promotes vacation as a priority and where workers enjoy extended time off. Brakes on German trade due to Brexit are not expected to last after mid-2017, when overall market growth projects more travelers.


MAJOR TAKEAWAYS

  • Planning ahead is believed to be important among German travelers, who book vacations well in advance
  • Safe and secure travel destinations are sought out
  • Germans have 25 to 30 days of paid vacation per year, which leaves them with enough time to combine different travel experiences during a single trip

  • Germans prefer to explore what other travelers have not seen
  • Travel agents are still key force in the market, and the majority of bookings in Germany are still made via classic travel agencies

Germany Profile

430,000
In-Person Trips, 2017
$754 Million
Visitor Spending, 2017

Market Conditions

GDP Annual Growth Rate

Germany is the largest national economy in Europe, the fourth largest by nominal GDP in the world. The German economic upturn has gained in terms of strength and breadth. In addition to consumer spending, external trade and investments are now also contributing to economic expansion. Germany is Europe’s leading economic power and the world’s second-largest exporter after China. The very high economic momentum in the first half of 2017 will slow slightly. As a result, overall capacity utilization will increase, with economic output exceeding potential output. GDP is likely to grow by 1.9 percent in 2017 and by 2.0 percent in 2018.

Exchange Rate

  • 1 Euro Equals 1.20 U.S. Dollar
  • The euro/U.S. dollar exchange rate has gained close to 13 percent in 2017, which partly reflects earlier weakness in the United States, but also underlines the scale of the shift in fortunes the currency bloc has undergone in the year to date.

Travel & Planning Methodologies

Airlift

  • 35 weekly nonstop flights
  • 13,622 weekly nonstop seats
  • An additional three flights to Southern California were added in 2017, and one in 2018.
  • Germany, Austria and Switzerland have four gateways to California: San Francisco, Los Angeles, San Jose, San Diego.

Booking

  • Planning timeframe: up to six months
  • Booking timeframe: November to March
  • More than 60 tour operators package California in German-speaking markets.
  • 10 tour operators control 80 percent of long-haul travel.
  • The ratio of traditional tour operators still surpasses online travel agency bookings.
  • Figures from the market research company GfK show that in the summer of 2017, sales through online travel portals in Germany rose by 9 percent compared with the previous year, while bookings in classic travel agencies increased by 3 percent.

Market Barriers & Risk Factors


Competitive Landscape


Other Market Insights

MARKET

  • Despite various external circumstances, German enthusiasm to travel remains unaffected. This is mainly due to the low-consumption framework conditions such as rising real wages, low unemployment and low saving propensity. Long-term projections estimate a reliable, stable holiday travel demand.
  • The package holiday remains the most important form of holiday organization. However, the structural change in favor of individual bookings, accommodation providers and online portals has been observed for years. Stationary travel agencies have proven to be resilient, with the number of travel agencies at almost 10,000.
  • Online travel planning has a large influence with regards to destination choice. 60 percent of German intercontinental travelers said the internet was the main driver in choosing their travel destination, followed by personal recommendations from family and friends (45 percent), information in printed travel guidebooks (37 percent) and personal advice from travel agents (27 percent).

AUDIENCE

  • German employees have 25 to 30 days of paid vacation per year, which allows travelers to combine different travel experiences.

PRODUCT EXPERIENCE

  • The United States continues to be the No. 1 overseas travel destination for German travelers, with “Fly & Drive” packages booming.
  • With Germans taking more (shorter) trips, domestic travel and short-haul beach/sun destinations, as well as destinations in Western Europe, are currently benefiting. New emerging travel destinations in the Asia-Pacific region and in South and Latin America are entering the market with considerable investments in product development, marketing and air connectivity.

COMMUNICATION

  • 76 percent of Germany’s population are internet users, and 56 percent are mobile internet users.
  • 37 percent of Germany’s population uses Facebook.
  • 39 percent of all travel purchases are made online with airlines, tour operators, travel portals and online travel agencies.
  • 26 percent of purchases are made online via phone (compared to 55 percent in South Korea, 33 percent in the U.S., 37 percent in the U.K., and 19 percent in France).

 


Sources

  • DIW - German Institute for Economic Research
  • RWI - Rheinisch-Westf. Institute for Economic Research
  • Deutsche Bundesbank – Federal Central Bank Germany
  • xe.com
  • DIIO
  • U.S. Department of Commerce
  • Tourism Economics
  • CIC Research, Inc.
  • DRV Federal Association of the German Tourism Industry
  • ADAC Reisemonitor 2016/17
  • ARD/ZDF Media Perspektiven
  • Brand USA
  • BTW Tourismus Index
  • GfK Travel Scope
  • RA Reiseanalyse
  • Stiftung für Zukunftsfragen Tourismusanalyse
  • UNWTO
  • Federal Statistics Office Germany