The other day a customer came to Tamara Behrens’ travel agency and greeted her with the words: “I would like to have a job like you too – nice to sit on the cell phone during working hours.” “You have to see the negative side too,” the 29-year-old replied to her visitor. “Namely, that I haven’t made any money for a year and a half. Do we still want to trade?”
The German travel agencies have had tough months. At the end of the summer season in September, many shopkeepers are more optimistic about the future than they were in August. At the same time, only 8.4 percent of the owners rate the current situation as good, more than half (55 percent) still speak of a bad situation. That is the result of the 200th tourist sales climate index of the Munich-based management consultancy Dr. Fried & Partner, a heart rate monitor for the travel industry inspired by the Ifo index.
How directly tourism depends on the developments of the pandemic and the resulting political decisions can be seen in the booking volume, as a survey by Travel Data + Analytics shows. At the beginning of the year, the travel agencies had to remain closed due to the lockdown, exactly when it is usually busiest. The business was shattered. With the third wave subsiding at the end of May, there was hope for a normal summer – and numerous bookings. But a short time later, Spain was declared a high incidence area and warned against the spread of the delta variant in Italy and Greece. The result was a wave of cancellations. In addition, there are customers who require intensive advice who have significantly more change requests than before, and organizers who have to constantly reschedule. “I now touch every booking that I make at least three to five times,” says Behrens.
Travel agencies earn their money with commissions from tour operators when they sell their offers. The amount of these commissions is usually between six and twelve percent of the total price. The money does not belong to them until the customer actually starts the trip. “If I sell a trip for December 2023 today, I won’t earn a single cent for two and a half years,” says Behrens. In the past, she was still happy about every booking. Today she can no longer do that – there is too great a concern that something will come up due to the pandemic, for example a travel warning from the federal government.
Politicians keep the travel agencies alive with bridging aids
On the one hand, political decisions this summer dampened business for tourism professionals. On the other hand, politics is keeping a large number of travel agencies alive with bridging aid and short-time work benefits. Many of them were under great pressure even before the Corona crisis because many people now prefer to book their trips online.
“For me, the big question is how the cake will be distributed in the future,” says tourism expert Markus Heller from Dr. Fried & Partner. He estimates that around 20 percent of travel agencies in Germany will not survive the coming year. “Before the crisis, we had around 11,000 travel agencies, and I’m assuming it’ll go down to 9,000, maybe just 8,000,” says Heller.
Marija Linnhoff, the chairwoman of the Association of Independent Independent Travel Agencies, also expects many bankruptcies, at the latest in spring 2022, when the bridging aid has been used up. But this is also in the interest of those travel agency owners who do a good job. “We need a market shakeout so that we can finally earn money again,” says Linnhoff, whose association currently has around 7,000 members.
There is a lot of debate in the industry about how stationary travel sales should position itself for the future. Some travel agency owners ask themselves whether they should continue to act as intermediaries or sales representatives between customers and tour operators or whether it might be worthwhile for them to organize their own trips with self-calculated margins. However, the number of those who feel they are well equipped for this step has so far been low. According to a survey conducted by the Centouris research institute at the University of Passau among 265 travel agencies, 57 percent want to maintain their commercial agent status. They justify this on the one hand with legal concerns regarding the tour operator’s liability and expensive insolvency insurance, on the other hand with concerns about a high organizational effort and lack of experience with self-organized trips.
Another hotly debated topic is the charging of consulting fees in order to be less dependent on commissions. According to tourism expert Markus Heller, people need an average of eight to nine hours if they plan a vacation independently and book it online. “Travel agencies can help optimize their customers’ valuable time budgets here,” he says. In many other countries it goes without saying that good service costs something. Heller is convinced that this knowledge will also prevail in Germany in the foreseeable future. The DER Touristik group, for example, introduced consulting fees for its 500 branches a year ago, and Tui followed suit in May of this year. But the service fees are controversial – and that they are not a solution on their own is shown by the fact that the employees of the 400 Tui travel agencies will be sent back to short-time work from October onwards.
The entire industry must become more digital
And last but not least, the discussion about the future of travel agencies is also about the question of who succeeds in seeing the Internet not only as an annoying competition, but also as an opportunity. According to the management consultancy Dr. Before the pandemic, Fried & Partner booked around 60 percent of package holidaymakers’ vacations in stationary travel agencies. This value is likely to be significantly lower in the future. It is therefore all the more important that the owners develop strategies on how they can also win customers over online. A fancy website alone is not enough. Some offices already offer advice via video telephony or Whatsapp. “I think online consulting with a familiar customer base will be indispensable in the future,” says tourism expert Heller.
Travel agency owner Behrens already advises customers from all over Germany in this way. She has also had good marketing experiences with social media. In the Corona crisis, she invented the “wanderlust Friday”: At the weekend, she posts photos of her own trips on Instagram in order to arouse a desire for vacation and to address a younger target group. “That also distracts me a little from my personal worries,” says the 29-year-old. She recommends that older travel agency owners, who are not familiar with social media, entrust their trainees with it. “They can really let off steam there.”
However, it is questionable whether there are enough trainees who can take on this task. According to the statistics of the German Chamber of Commerce and Industry (DIHK), only 621 young professionals began their training as tourism clerks in 2020. That was 1,000 trainees fewer than in the previous year – an unprecedented decrease of 62 percent. No figures are yet available for 2021, but a recovery is considered unlikely.
Travel agency owner Tamara Behrens would choose her profession again despite everything. Many acquaintances asked her if she didn’t want to sell something other than travel in the future, but that was out of the question for her. “My heart and soul is in tourism,” says Behrens. “My office is my baby, I can’t just give that up.”