Once again this year, the Travel Compass 2024 by PayPal and Dr. Fried & Partner presents exciting insights into the German vacation travel market. The study, which is being published for the third time in a row, examines changes in the demand and booking behavior of German holidaymakers. To this end, Travel Intelligence analyses based on real booking data from online and offline sales channels (data source: Travel Data + Analytics) and qualitative expert interviews are used for evaluation in context. This year’s main topic is dedicated to an extremely controversial subject: the increase in cases and methods of fraud in the travel industry and the resulting challenges for fraud prevention. In addition to a retailer survey in the DRV network, qualitative in-depth interviews were conducted with experts from the field of fraud prevention.
Travel industry back on course for growth
In the past tourism year 2022/23, vacation travel sales exceeded the pre-corona level for the first time again with an increase of 9 percent, and the new tourism year 2023/24 is also optimistic with strong advance bookings. While growth in the past travel year was largely characterized by a significant increase in prices in some cases, vacation bookings so far in the new travel year indicate that demand is also rising more strongly again. Nevertheless, the number of people booked on tour operator trips is still below the pre-corona level. Inflation and the tight financial situation of many households are not leaving the vacation travel business completely unscathed.
The booking behaviour of German holidaymakers has continued to normalize over the course of the past year. Early bookers are back in their old strength for the new travel year. The proportion of vacation trips booked more than six months in advance is once again as high as in the 2018/19 tourism year, but the proportion of particularly last-minute bookings is still higher.
Online and mobile continue to be fast-growing sales channels in the German market for vacations organized as packages or modules. The online booking trend has increased significantly during the pandemic. Measured by monthly new bookings, the proportion of new bookings made online is now between 30% and 40%, with fluctuations over the course of the year depending on which products are the seasonal focus of German holidaymakers’ travel bookings. With the return of more advice-intensive products such as long-distance and round trips as well as cruises, over-the-counter sales have also become more important again.
Increasing cases of fraud require stronger prevention measures
The significant increase in the volume of bookings is once again raising awareness of an explosive issue in the travel industry: the fight against fraud, which is estimated to cause millions in losses in the travel industry. With millions of transactions resulting from the large number of individual travel bookings, increasing digitalization and a sharp rise in the proportion of online bookings, fraud attempts are also increasing massively. There seems to be no limit to the criminal energy and creativity of fraudsters.
Travel companies are confronted with a wide variety of fraud schemes and methods. They range from payment fraud, fake identities and account takeovers to complex fraud schemes using technologically advanced methods and manipulation of fraud prevention systems. Effective measures are required along the entire process chain, from product to distribution and payment, in order to decisively counter the wave of fraud. Some tourism companies have already achieved a great deal in terms of fraud prevention by investing in specialized fraud teams, tools and techniques, while others are still at the very beginning. Fraud prevention is a topic that is becoming increasingly important in the travel industry. Digital solutions and cooperation with external service providers and payment providers such as PayPal play an important role in preventing fraud.
Conclusion
The Travel Compass 2024 by PayPal and Dr. Fried & Partner shows the changes in demand and booking behavior in the German vacation travel market. A deep dive also sheds light on the relevance of fraud, fraud patterns, challenges in preventing payment fraud and preventive measures in the tourism industry.
You can access a free copy of Travel Compass 2024 by clicking on the button below.
DOWNLOAD