Tourism industry booms despite tax burdens | Business| Economy and finance news from a German perspective | DW | 07.03.2012
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Tourism industry booms despite tax burdens

The best weeks of the year are when we're on vacation. Germans are spending more and more on travel - and they are not alone. Tourists have become something that many economies simply cannot do without.

"We've brought the sun with us to Berlin," jokes the Egyptian tourism minister Mounir Fakhry Abdel Nour and points to the sky. And he's right. A bright blue sky has descended above the exhibition center at Funkturm Berlin (Radio Tower Berlin). Once again, it's host to the biggest tourism trade show in the world - ITB Berlin - which opened Wednesday.

Egypt is this year's partner country and the minister from Cairo has come to fulfill his advertising duties. And he's got it down to a fine patter.

The Egyptian tourism minister Mounir Fakhry Abdel Nour

The Egyptian tourism minister Mounir Fakhry Abdel Nour

Egypt is, according to Abdel Nour, a rare destination. Seldom do countries offer tourists so much culture, beaches and adventure… and 360 days of sun in the year.

"Tourism has been one of the most important pillars of our economy for over a decade," says Abdel Nour, "and with income of about 12.5 billion dollars (9.5 billion euros), it was the second largest source of foreign currency in 2010."

Tourism, he says, will remain a priority for Egypt - no matter who is in government.

"And we plan to create the infrastructure we need to meet our goal of 30 million tourists per year by 2017."

Fully booked

It's an ambitious goal. The number of holiday-makers would have to double the number seen in 2011 for that to happen.

And there is plenty of competition.

The industry is booming - so much is clear at the ITB. More than 10,000 exhibitors from 187 countries have crammed themselves into 26 - filled to capacity - exhibition halls. Greece is well represented. Given its desperate financial state, it is in great need of income from tourism. But the ongoing protests in the country continue to scare tourists away.

A beach at the Greek island of Corfu

Sun, sea and surf on Corfu still draw in the crowds

But despite the debt crisis across the eurozone, German tourists are again destined to be big travelers. They, for instance, are heading to Spain, Croatia, and Turkey - rather than Greece.

German Travel Association president Jürgen Büchy, however, says it is too early to draw any conclusions about summertime business for Greece.

"Greece can rely on the loyalty of its regulars and it remains in summer one of the 10 most popular holiday spots," Büchy says, "and I should stress there's no evidence of the political unrest on the islands and at the beaches of Peloponnese, which is where the tourists tend to be."

Germans are "traveling world champions"

Last year, Greece benefitted from the fact that fewer tourists traveled to North Africa. Although since its recent elections, Tunisia has become attractive again and tourist numbers are rising. Jürgen Büchy says this summer looks good for Tunisia. Other destinations can similarly look forward to cashing in on Germany's unrelenting passion for travel. In 2011, Germans spent about 61 billion euros on foreign travel - including to destinations such as the Caribbean, the United States, and increasingly Asian countries.

That said, Germany is still most Germans' favorite destination. The number of overnight stays in Germany rose last year by four per cent, reaching a new record. Foreign visitors contributed to the rise - accounting for 16 per cent, according to Klaus Laepple, president of the National Association of Tourism Economics (BTW). Laepple believes this year will see even a bigger record, with 400 million overnight stays. The hospitality industry predicts revenues will rise by between two and three per cent.

Aerial view of German holiday destination Saxon Switzerland

Saxon Switzerland (Sächsische Schweiz) remains the most popular holiday destination for Germans

"Things are also looking good for events in 2012 and we expect German airports will service around 200 million passengers," says Laepple.

The state cashing in

These are all sunny prospects, but some say the tourism industry feels like it's been left in the lurch by governments while it chases new records. Citing, among other things, an airline tax of between eight and 45 euros per passenger, communal taxes on overnight stays, and increased tax charges on river excursions, Klaus Laepple says politicians seem "overtly happy" to burden the industry and its customers. He says the profit margin is already small enough.

Jürgen Büchy of the German Travel Association also says the industry would be hard pushed to shoulder any more strain.

"This is a very stable industry and one that is - even in times of political crisis - financially successful, but it needs peace on the political and fiscal front," says Büchy. "We represent a large proportion of Germany's economic product and we are concerned that if this trend continues, we will lose this success."

About three million people - or seven per cent of the job market - are employed in the tourism industry, according to Büchy. And it is one, which he says, contributes more to the economy than car manufacturing, making it a key to Germany's future success.

Author: Sabine Kinkartz / za
Editor: Gregg Benzow

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