At the symposium and anniversary event of the Frankfurt University of Applied Science on October 7, 2022, with the topic “Travel agency of the future – the challenge of digitalization and the wishes of Generation Y and Z”, Dr. Markus Heller, Managing Partner of Dr. Fried und Partner, gave an outlook on the changes and challenges in travel distribution and derived the resulting opportunities based on current booking levels in the tour operator market. His comments are based primarily on data collected by Travel Data + Analytics from Nuremberg on the German package tour industry.
Status quo in the German tour operator market
The mood in the travel industry has been clearly positive since the start of 2022, especially as booking levels in calendar week 6 had already exceeded the pre-crisis level compared to the same period in the 2018/19 tourism year. At the end of September, booking levels were 86% full compared to the overall booking level for the 2018/19 tourism year. Online travel sales are performing above average, with a current booking volume 46% higher than in the 2018/19 tourism year. Looking at the booking levels for the coming 2022/23 winter season, the market is at around 67% of the pre-crisis level. Overall, this shows that travellers are currently booking at shorter notice and at higher prices.
Current challenges in travel sales
As in other areas of life, the Covid19 pandemic has intensified the process of change in the travel industry. For example, more than half of the travellers already obtain information exclusively online as part of their travel preparations and the trend towards online bookings, which has been observed for years, has intensified with the pandemic. So that more trips are now booked online than in person. Consumers cite the constant availability of booking channels, convenience, greater choice, better comparability and time savings as reasons for this.
In addition to the general increase in digitalization, the individualization of offers is the order of the day, meaning that digital offers and services that are tailored to the needs of individual customers will continue to gain in importance. However, the massive increase in content and sources of information is gradually overwhelming customers. While almost 70% of travellers use the internet to obtain information before booking their trip, studies in recent years have shown that 42% of millennials, for example, feel overwhelmed by vacation research.
Opportunities for travel sales
The last two years have shown us that challenges always bring opportunities. For example, brick-and-mortar travel agencies are now also managing to retain their customers using digital communication and booking channels and bring them closer to the benefits of individual, digitally supported advice. Picking up customers at various touchpoints on their digital customer journey will be an important task for both small and large players in the tourism industry to assert themselves in the competition for travellers.