Economy may hit German holiday spending
Frankfurt, November 24, 2011
Uncertainties caused by the euro zone debt crisis and a stuttering global economy could hit spending next year on holidays by Germans, the world's top spenders on trips abroad, a German travel association said.
"Our market researchers forecast moderate market growth of between 2 and 3 percent," the DRV said on Thursday. "But this is dependent on economic development and the euro zone."
German travel agents saw sales rise 9.5 percent to 22.5 billion euros ($30 billion) in the fiscal year to the end of October 2011, as the market continued to recover from the slump seen in 2008, the DRV said.
Continued spending by Germans on trips to places such as Spain, Turkey and Greece has been a bright spot for tour operators this year.
"Holidaying is and remains an essential for Germans," DRV president Juergen Buechy said.
Thus far, the German economy has proven the most resilient in Europe but a poor German bond sale on Wednesday fuelled fears the crisis was beginning to threaten the region's biggest economy.
However, a survey on German business sentiment rose unexpectedly in November for the first time in nearly half a year.
Thomas Cook, the world's oldest travel company, on Tuesday asked banks to come to its rescue for the second time in five weeks, sending its shares into freefall and prompting customers to flood news websites to ask whether their holidays were safe.
The company has particularly suffered in Britain, where its core customer base of families with young children have less money to spend as a result of tough government measures to cut debt. Bookings were also hit by unrest in Egypt and Tunisia, traditionally popular destinations for French customers.
Rival TUI Travel, controlled by Germany's TUI AG, is seen coping well even if trading becomes more difficult in the UK and Germany, given that TUI Travel performed better in the summer season.
"Discussions regarding Thomas Cook's solvency in the UK might additionally help TUI Travel to outperform its competitor," Silvia Quandt analyst Stefan Kick said. – Reuters