German tourism market trends

Online travel bookings grow fast but travel agents stay top for revenues

Oliver Rengelshausen is head of tourism reservations IT firm Traveltainment
Traveltainment
Oliver Rengelshausen is head of tourism reservations IT firm Traveltainment

Online travel bookings are growing rapidly in Germany but travel agents also have solid growth and remain the top sales channel by revenue, according to tourism experts and market researchers.

2018 has started well for Traveltainment, the Amadeus IT subsidiary which operates Germany’s main travel agency reservations system ‘Bistro’ and other leisure travel sales products. The first two weeks of January normally generate the highest package holiday sales volumes of the entire year.

Looking at the bookings for 1 – 13 January, “it feels like a new record for Traveltainment”, said managing director Oliver Rengelshausen. “This is good news that fits into the picture of a smoothly running economy.”

The experienced tourism sales and e-commerce expert emphasised that both online and ‘offline’ bookings are growing and rejected recent claims that travel agency sales are stagnating.

In 2017, the number of package holidays and last-minute trips booked through Traveltainment increased by 9% compared to 2016. Bookings by Online Travel Agencies (OTAs) grew by 15% but mainstream travel agents also accounted for a 4% increase. There was a similar picture for all Traveltainment bookings, which grew by 11% last year. Bookings from OTAs increased by 20% and from travel agents by 6%. In volume terms, bookings by OTAs overtook those by travel agents last year.

“There’s no question that OTAs are growing more strongly than offline agencies. However, traditional agents are not making a retreat but are growing significantly,” Rengelshausen commented.

Moreover, traditional travel agents remain the most valuable sales channel for tour operators, he pointed out. Their value of their bookings was 50% higher than those of OTAs last year. Reasons for this sizeable difference, according to the Traveltainment chief, could include the fact that customers tend to book more expensive holidays in travel agencies where there is also a higher proportion of family bookings.

The Traveltainment figures follow a detailed sales analysis by market researchers GfK published in December, based on its representative monthly survey of travel agency and OTA sales. This found that tour operator holiday sales through OTAs and tour operator websites grew by 12% in revenue terms in the 2016/17 tourism year, while ‘offline’ travel agents generated only a low single-digit increase. Germans clearly tended to book more expensive holidays, such as long-haul trips and cruises, through travel agencies but increasingly booked cheaper holidays, such as Mediterranean packages, online, according to the sales analysis.

There were also big differences in terms of which destinations were sold through which sales channels, the GfK analysis showed. OTAs generated nearly 75% of their turnover from sales of Mediterranean holidays last year, with the Eastern Mediterranean more important than the Western Mediterranean with just over 38% of revenues. In contrast, the Mediterranean only accounts for 57% of the combined overall sales revenues of traditional travel agents and OTAs. The Western Mediterranean accounts for 32% and the Eastern Mediterranean for 25% of this latter figure.

In terms of individual destinations, Turkey performed much better online than offline last year, according to the GfK figures. Travel agency bookings for the destination dropped by 30% but online sales were down by only 5%. As a result, 39% of all Turkey holidays were sold online last year.

“This is an extremely high figure and an increase of seven percentage points compared to the previous summer,” commented Dörte Nordbeck, head of travel & logistics at GfK. With an average price of €608 per booking, OTAs clearly sold cheaper Turkey holidays than travel agencies, where the average price was €708, the GfK figures showed.

There was also a divergence in revenues for the top destination, Spain. Travel agency sales declined by 8.5% from the previous year’s record level while OTA revenues increased by 2%. In contrast, sales revenues from Greece bookings increased by an identical 29% both through travel agents and OTAs last year.

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