As in the previous three years, the Travel Compass 2025 by PayPal and Dr. Fried & Partner once again provides exciting insights into the German holiday travel market this year. The study, which is being published for the fourth time this year, examines changes in the demand and booking behaviour of German holidaymakers. For this purpose, analyses by Travel Intelligence based on real booking data from online and offline sales channels (data source: Travel Data + Analytics) as well as qualitative expert interviews are used for evaluation in context. This year’s focus topic deals with an issue that is becoming increasingly important: the unbroken increase in online and mobile bookings and the associated need for tour operators to optimise the customer journey. In addition to an end customer survey, qualitative in-depth interviews were conducted with experts from the fields of management, marketing, finance and technology.
The German holiday travel market is flourishing
Germans’ desire to travel remains high and the holiday travel market once again closed the past tourism year 2023/24 with significant growth and record sales. The fact that Germany’s third-largest tour operator FTI had to file for insolvency shortly before the summer holidays ultimately only left its mark on the growth curve. The tourism year 2023/24 exceeded the previous year in terms of sales by 12 percent, and the tourism year 2021/22, which was still partly characterised by the pandemic, even by 36 percent. In contrast to the previous year, growth in 2023/24 was no longer predominantly price-driven but mainly demand-driven. The new tourism year 2024/25 has started with even better early booking sales and promising growth. Both the current winter season and the upcoming summer season have recorded early booking sales that once again significantly exceed the previous year’s level. Together, they represent cumulative sales growth of 11 percent.
The booking behaviour of German holidaymakers continued to normalise over the course of last year. The proportion of early bookers increased again compared to the previous year. However, the insolvency of FTI shortly before the start of the summer also resulted in strong short-term business. As a result, the share of early bookers in the 2023/24 tourism year was only 26% instead of the 33% possible in “normal” years. Without exceptional circumstances, however, the trend is clearly towards holidays booked longer in advance.
Online and mobile continue to be fast-growing sales channels in the German market for holidays organised as packages or modules. Many travel agencies are also pushing ahead with digitalisation and are pursuing a two-pronged approach to sales. The new year 2025 is starting at a similar level to the previous one. In online travel sales, new bookings in the first five weeks of the year after the holidays exceeded the record figures of the same period last year by three percent. In over-the-counter sales, they were unable to keep up with the sensational figures of the previous year and fell by four percent. An end to online growth is not in sight.
Customer-orientation in payment processes pays off
With the increase in online bookings, processes, requirements and customer wishes in the customer journey are becoming increasingly important. The booking platforms, regardless of whether the customer accesses them on mobile or desktop, have one goal: to make it as easy as possible for the customer to finalise the booking. Conversion and convenience are the key terms that travel companies should be aiming for.
However, the topics that companies are focussing on in order to make the customer journey as successful as possible are very diverse. They range from increased personalisation and individualisation to measures aimed at signalling expertise to customers and creating trust. Technological developments, for example to increase online bookings on mobile devices, also play a role. A further shift towards the mobile sector is recognisable as a trend. Many companies are therefore focusing on optimising the “mobile journey” or, more precisely, a “seamless” customer journey that ensures simple, fast searching and booking of travel services at all times
The importance of the topic of payment is viewed differently. While some companies consider payment and the choice of payment methods in the customer journey to be less relevant, innovative travel provider and intermediary platforms in particular are focusing on customer centricity – including in the payment process. A strong customer focus also pays off when it comes to payment: companies that offer a wide range of payment options can avoid booking cancellations and increase the conversion rate. This is because payment options are an important criterion for most customers. A survey of end customers shows that a third of all customers cancel a booking if their preferred payment method is not offered. It will therefore be even more important in future to offer a sufficiently large range of simple payment solutions that reduce cancellations during the booking process. Increasing conversion is a fundamental focus in the digital sales environment and a direct indicator of customer satisfaction in the booking process.
Conclusion
The Travel Compass 2025 by PayPal and Dr. Fried & Partner shows the changes in demand and booking behaviour in the German holiday travel market. This year’s focus topic examines the aspects of convenience, conversion and payment as part of the customer journey.
You can download a free copy of the Travel Compass 2025 by clicking here.
Download