German Travel Buffeted by Strong Winds | Business| Economy and finance news from a German perspective | DW | 07.09.2002
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German Travel Buffeted by Strong Winds

The terrorist attacks on September 11 deeply shook the travel confidence of travellers worldwide and sank Germany's thriving travel industry by 12 percent over the past year. What's next in store for the battered sector?

Even this is not enough to prompt travel-shy Germans to pack their bags

Even this is not enough to prompt travel-shy Germans to pack their bags

The endless replays of two commercial jetliners smashing into the towers of the World Trade Center one year ago sent shockwaves through the world's travel industry.

The thought of civilian aircraft loaded with passengers being turned into suicide bombs caused many to reach for the phone and cancel their plane reservations.

The result was a devastating slump for the global travel industry. This usually robust sector, worth $4.2 trillion (4.26 trillion euro) a year, watched as the number of tourists worldwide fell by 9 percent.

Big blow to Germany's travel trade

The World Travel and Tourism Council (WTTC) estimates that the United States and Germany will in the end be the two countries most affected by the terrorist attacks, with tourism demand in Germany expected to suffer a decrease of $24.7 billion for the years 2001 and 2002 combined.

“The immediate consequences in Germany of the attacks were catastrophic,” Hanns Peter Nerger, Managing Director of Berlin Tourismus Marketing, told DW-WORLD. “We had a dramatic fall in the number of overseas guests.” In September and October, the German capital saw a 30 percent drop in the number of visitors from the United States.

The absence of Americans especially has badly hurt the German industry, since in just two weeks of vacation they spend as much as Germans do in the six weeks annual leave they enjoy.

But Americans were not the only ones staying at home after September 11. Germans, arguably the world’s most passionate travelers, decided to forego most trips. In a survey conducted by the Association of German Travel Agents and Tour Operators (DRV) just after the attacks, a full one half of Germans said they did not want to fly.

Economic Slowdown Adds to Woes

But travel experts are quick to emphasize that it isn’t just September 11 that has hurled the industry into one of its worst crises in years.

There have been several factors, including the new-found strength of the euro, which has suddenly made Europe ten percent more expensive for visitors from outside the eurozone. The biggest factor in the slowdown, however, has been the worldwide economic meltdown that had begun to weigh in on the industry even before the attacks.

“Of course the current crisis is still connected with September 11, but there were already problems beforehand with overcapacity and the failures of airlines,” Christian Boeger, head of communications at DRV, told DW-WORLD. “September 11th just sped up the whole process.”

He said the immediate effects of the attacks on the travel industry in Germany were basically limited to 2001. DRV repeated its survey in February 2002 on Germans’ willingness to fly and found that the percentages had returned to pre-9/11 levels.

But the industry hasn’t bounced back in the least. Used to double digit growth, the sector watched as bookings stayed stagnant, still off some 12 percent from the year before, and around 700 travel agencies around Germany closed shop. According to Boerger, it wasn’t so much a fear of terrorist attacks that were holding German travelers back anymore. It was the fear of losing their jobs in the middle of a floundering German economy.

“You know what our major competition is this year?” he asked. “People’s balconies. Uncertainty about unemployment and whether the country will see an economic upswing is keeping them at home.”

Cautious Optimism

According to tourism economists, the worldwide industry will not recoup all of its losses incurred as a result of 9/11 until February 23, 2004, 896 days after the attacks. The industry has already christened that day “Travel and Tourism Freedom Day.”

Here in Germany, travel experts are expressing guarded hope that the worst is over.

They say while the spring was bad, thanks to an early Easter and the World Soccer Cup that kept people at home in front of the television instead of on a Mediterranean beach, the late summer and fall seasons are looking better. They point to strong bookings in September that indicate the industry may be on the road to health. The world’s largest tourism company, TUI, says it expects European package tours to grow at a sound 4 percent over the next few years.

While the horizon is looking brighter, there is still one large black spot on it: a possible US-Iraq war. The tension between the Bush administration and Saddam Hussein is a danger that is weighing heavily on the travel industry, according to Christian Boerger of DRV, since it could push a recovery back years.

“If it comes to a military conflict with Iraq, our climb out of the valley we were in after September 11 will come to an abrupt halt,” he said. “In fact, we’ll just fall into a deeper one.”