Financial impact

Tourism industry calls for state support

"Tourism within Europe needs a clear perspective," urges TUI CEO Fritz Joussen.
TUI / Christian Wyrwa
"Tourism within Europe needs a clear perspective," urges TUI CEO Fritz Joussen.

The hard-hit German tourism industry is seeking state support to cope with a near-€11 billion Covid-19 financial hit amid continued booking cancellations and disappearing hopes for a voucher scheme to prevent large-scale customer repayments.

Travel agencies and tour operators in Germany now look set to lose €10.8 billion worth of revenues by mid-June, according to new estimates by the German Travel Industry Association (DRV), following the government’s decision to extend its global travel warning until June 14 and further subsequent booking cancellations by tour operators.

"The business of travel agencies and tour operators has virtually completely collapsed on state orders. There is no improvement in sight," declared DRV president Norbert Fiebig.

The DRV is calling for an "instant aid programme" with direct payments to companies in financial difficulties. Two out of three travel firms are now threatened with insolvency, according to the association.

Politicians suggest industry fund

With the chances of a voucher scheme to enable tour operators to retain customer payments now looking increasingly unlikely, diverse politicians, including economics state secretary Thomas Bareiß who is responsible for the tourism industry, are now calling for a state-backed €10 billion fund to save travel companies from insolvency.

This would initially be funded by the government and later by a 1% contribution from package holiday sales turnover. The idea of a fund has already been backed by several top figures in the German tourism sector.

Operators cancel bookings to mid-June

Meanwhile, more leading tour operators, including FTI, Alltours and Schauinsland-Reisen, have followed TUI and DER Touristik by cancelling all foreign holidays with departures due by June 14.

However, the moves do not cover domestic trips within Germany which might become possible again within the next few weeks. TUI generally expects tourism destinations and regions to start easing visitor restrictions in the near future, so that customers can start travelling again to some areas from next month.

Joussen calls for 'European travel roadmap'

After TUI Group relaunched domestic travel offers within China last week, CEO Fritz Joussen also urged: "Tourism within Europe needs a clear perspective. The EU and the member states should develop a roadmap for travel within Europe and make holidays possible in 2020.

"This includes opening up with tourism and air travel to countries and regions of Europe that have made good progress and are actively promoting the return of holidaymakers, such as Greece, Cyprus, Portugal, the Balearic Islands, Austria or Bulgaria.

"Holidays at home are an offer but should not be the only answer for Europe and Europeans," he emphasised.

German tourism executives are in detailed discussions with various European destinations about options for resuming travel once restrictions are lifted. Both TUI and DER are working intensively on new hygiene and social distancing measures that would be used in their hotels this summer.