The “Travel Compass 2026” by PayPal and Dr. Fried & Partner, now in its fifth edition, examines changes in the demand and booking behaviour of German holidaymakers. To this end, Travel Intelligence analyses based on real booking data from online and offline sales channels are utilised via Travel Data + Analytics. The key topic “Disruption and innovation in the online travel market” was examined using a representative end-customer survey and supplemented by in-depth qualitative interviews with eight experts from the tourism industry.
The holiday travel market: between price trends and digital transformation
The German holiday travel market continues to show a stable demand base, even though growth momentum has slowed slightly in recent times. In the 2024/25 tourism year, German travellers spent over 23 billion euros on pre-booked services in the tour operator market. This represents a six per cent increase in turnover compared with the previous year.
Demand remains largely stable at around 22.6 million holidaymakers – growth in the market is therefore primarily price-driven. The average price per person has risen by 11 per cent. Whilst the €80–€150 per person per night category remains the largest segment in terms of volume, revenue shares are increasingly shifting towards higher price brackets. The segments between €250 and €350 and above €350 are recording the strongest growth. This trend is less a reflection of a conscious ‘upgrading’ by customers and more a consequence of the rise in the general price level and the changed structure of supply in the market. Demand remains largely stable at around 22.6 million holidaymakers – growth in the market is therefore primarily price-driven. The average price per person is rising by 11 per cent. Although the category of 80 to 150 euros per person per night remains the segment with the highest volume, revenue shares are increasingly shifting towards higher price brackets. The segments between 250 and 350 euros and above 350 euros are recording the strongest growth. This trend is less a reflection of a conscious ‘upgrading’ by customers and more a consequence of the rise in general price levels and changes in the market’s supply structure.
Holidaymakers’ booking behaviour also shows that, since the coronavirus pandemic, the lead time for bookings has been shifting increasingly towards longer-term planning. Around 31 per cent of turnover now comes from bookings made more than six months before departure. In terms of sales, this trend is reflected in a steadily growing proportion of online bookings. Online sales now account for around 41 per cent of the German market for package holidays or holidays organised in modules.
Although figures for the 2025/26 tourism year show an increase in turnover compared with 2024/25 as of the end of January 2026, many travel companies experienced rather subdued demand at the start of the year and are keeping a close eye on developments in the travel market.
Artificial intelligence is driving change in the travel market
In 2026, the travel market will find itself caught between a steady appetite for travel, growing competitive pressure and technological change. Alongside trends in demand, prices and booking behaviour, many companies are increasingly focusing on fundamental strategic questions: How can capacity and prices be managed effectively, offerings clearly positioned, and internal processes made more efficient?In particular, issues such as automation, data quality and strengthening customer relationships throughout the customer journey are becoming increasingly important. The findings of the Travel Compass not only highlight market trends but also reveal how industry experts view the future market landscape.
Experts believe that competition in the travel market will continue to intensify. Among other things, the focus is on the division of roles between different market models: traditional tour operators, online portals such as OTAs, and ‘airline-holiday models’, which bundle flights and hotels directly into holiday packages. It is not yet clear which models will experience particularly strong growth in the long term. At the same time, parts of the industry anticipate a greater segmentation of the market: quality and luxury offerings, as well as price-oriented products, could gain in importance, whilst mid-range segments are likely to come under greater pressure.
Artificial intelligence is adding further momentum to the market. It is regarded as one of the key drivers of innovation in the travel sector and as an increasingly influential factor throughout the customer journey – particularly during the inspiration, comparison and search phases. Here, customers are making increasing use of AI-powered tools. Consequently, the demands on companies for structured data, high-quality content and a digital presence that also functions within new search and distribution logic are increasing. At the same time, this presents a major opportunity: AI can help make the customer journey more convenient, personalised and efficient. It opens up new potential for travel providers – for example, in service, CRM and data analytics, as well as in demand forecasting, pricing and capacity management. The real competitive advantage does not arise from the sporadic use of AI tools, but rather when AI is embedded strategically and across departments into structures, processes and the organisation.
Conclusion
The Travel Compass 2026, produced by PayPal and Dr. Fried & Partner, highlights key shifts in demand and booking patterns within the German holiday travel market. The analysis makes it clear that the growing prevalence of online sales and AI-driven innovations are shaping the future development of the travel market.
You can download a free copy of the Travel Compass 2026 by clicking here.
Download