Three out of four Germans reduce or eliminate their vacations due to inflation

Rosalia SanchezCONTINUE
Updated: 06/14/2022 11:39 a.m.
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After two years of pandemic
the tourist sector rubbed its hands and celebrated the overdue hunger of vacations
in Central European markets. The German tour operator TUI had even advanced the "perfect season" for this summer, due to the increase in reservations on the Spanish coasts, even for stays slightly longer than before the coronavirus. But inflation is putting an end to this rejoicing. Three out of four Germans confess that this summer they will reduce or even eliminate beach holidays to adapt family budgets to inflation, which in Germany already amounts to 7.9%. This is confirmed by a study commissioned by the auditing and consulting firm PWC. "High inflation threatens to quickly dampen the burst of desire to travel," predicts Ingo Bauer, Head of Transport and Logistics at PWC Germany.

“We have experienced a boom in reservations since Easter, customers have been asking if there are no longer any restrictions on entering Spain and, when we inform you that you no longer have to present vaccination cards and all that, the reservation of the package used to be automatic. But for several weeks a part of those reservations have been canceled, ”confirms the Baden Agentur agency in Berlin.

The Austrian Secretary of State for Tourism, Susanne Kraus-Winkler, has reported that travel costs will increase by 10% to 15% this summer due to inflation, a percentage that forces many Austrians to rethink their plans as well. vacation. "Right now, I'm hearing that raising prices is not a big deal because the desire to travel is there, but I don't think it's a good idea," he told the industry, "I think all operators know their target group and they will adapt to the point where they don't overwhelm their clientele." Kraus-Winkler tries to reassure the operators and is sure that, as far as possible, Austrians will try to maintain their vacations this summer, but she does warn that trips will be significantly reduced throughout the year, especially in the area of "second vacations".

The sector is investigating in a hurry where the price increases that could ruin the summer campaign come from. The price comparison portal Idealo, consulted by many German tourists, notes that a summer flight to Alicante from Germany cost more than 71% in May compared to three years ago. In Mallorca the rise was 61%, Faro in the Portuguese Algarve 41%. The German aviation industry association justifies the price increases with rising kerosene prices. However, aviation expert Michael Immel criticizes that the share of fuel in flight costs is 30% to 40% for airlines. Lufthansa, the parent company of Eurowings and Eurowings Discover, explains to investors in a publication that the group was able to secure long-term low kerosene prices through so-called "hedging" and thus cushion about half of the price increase. In fact, according to Michael Immel, airlines have made losses in recent years and are now trying to cash in on rising demand.

According to Idealo, it is mainly the “hot water destinations” that are currently in greatest demand and where flight prices are skyrocketing. At the same time, there are also connections that have become cheaper despite higher kerosene prices: destinations for classic city trips or long-distance routes such as the Dominican Republic or the United States. Those who want to fly from Germany to Mexico City this summer paid 27% less in May than three years ago. Immel points out that competition plays an important role. “Classic hot water destinations like Mallorca used to be offered by Air Berlin and more recently by Ryanair. Air Berlin doesn't exist anymore, Ryanair doesn't fly from Frankfurt anymore, and that's really what explains the sky-high prices."

Holidaycheck reports for its part that the number of flight connections to Mallorca from Germany reached the pre-crisis level much faster than other destinations. Also, for the Canary Islands, for example, there are many airports with a smaller catchment area and consequently fewer flights. Package tour operators were able to secure cheap flights to destinations such as Mallorca in advance and are now able to pass this price advantage on to customers, although, in places where demand is high, these 'quotas' have already been exhausted, ticket prices Tour packages also go up.

In addition to inflation, the Central European sector points to the chaos at airports due to lack of staff as the reason why many customers are rectifying their summer vacation plans. “Over the past two summers, due to the pandemic, a national German market for vacation spots has emerged and gained quite a bit of traction,” reports the German Association of Travel Agents, “clients have been introduced to those destinations last summer or next. previous and, especially the older ones, find this trip easier and less stressful and prefer to repeat it». The same source points out that flight cancellations accumulate behind "a wave of problems, although we are very hopeful that they can handle it in some way."

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