2020 outlook and sizing for the German travel market

Amidst the travel stoppage, it became clear for the German population that their summer holidays would not be the same as they were in years past. Booked tours to foreign (sun and beach) destinations are subject to cancelations through the tour operators, as borders remain closed and available bed capacities are subject to local government rulings. For the summer season, Phocuswright expects that many of the main destinations will open their borders to receive German tourists. But the downside for tour operators will be limited supply (beds and air tickets) and risk-averse travelers, which will suppress revenue. As a result, domestic travel is expected to see an upswing that might prevent the worst for German hospitality according to Phocuswright’s latest travel research report Germany Travel Market Update 2020. However, it is primarily leisure hotels and hotels in urban tourist destinations that will reap the benefits. The major transportation mode will be by car, possibly providing the car rental segment some unexpected business.

The overall effects of the pandemic are projected to produce a 52% decline in total year-over-year gross bookings in 2020, reaching just €30.2 billion. Many travelers are likely to feel that booking via third parties (OTAs and tour operators) does not provide the security it once did (e.g., problems with cancelations and refunds). As a result, more people will book direct, especially because more detailed information on COVID-19 precautions is available on supplier websites (versus OTAs). This increased reliance on supplier websites will contribute to online penetration, while online supplier-direct bookings grow faster than OTAs. The recovery in gross bookings will be slow and see a slight upward tick in July during the summer holidays (see figure below). However, 2019 levels will not be reached before 2022.

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The full report presents a high-level overview of the German travel market in 2020, including the impact of the coronavirus on major players, key segment analysis, and sizing and projections through 2020. Key segments include: airlines, hotel & lodging, rail, car rental, tour operators, and OTAs. Get more information about the full report here.

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