British American Tobacco presents the 18th German Tourism Analysis of the Leisure Research Institute

The tourism boom is coming to an end
Losses yes - collapse no

With tourism, the growth market in Germany is losing its last bastion. It was not so much the consequences of 11 September as the deepening recession that hit the travel industry in 2001, which can no longer escape the pull of the general economic development. Nevertheless, Germans' desire to travel seems largely unbroken. Travel intentions for 2002 show only a slight downward trend compared to the previous year (2001: 49% - 2002: 47%), while the proportion of those refusing to travel remains unchanged (2001: 24% - 2002: 24%). These are the findings of the 18th German Tourism Analysis conducted by the Leisure Research Institute of British American Tobacco, in which 5,000 German citizens aged 14 and over were asked about their holiday behaviour in 2001 and their travel intentions in 2002.
"German holidaymakers are definitely aware of the crisis," says Institute Director Prof. Dr Horst W. Opaschowski, "but they don't think much of hysteria. Even if no growth rates are expected for 2002, the trembling feared by the tourism industry is obviously not taking place. The impression is being created: The travel industry is more insecure than the travellers themselves." Of the German citizens surveyed in the period from 8 to 23 January 2002, only 29 percent (previous year 2001: 27%) are still "unsure" whether they want to or can travel this year. Four months after 11 September, the level of uncertainty among the population is therefore no higher than in the years 1998 to 2000 or at the time of the Gulf crisis in 1991.
German citizens demonstrate cautious optimism. According to a B.A.T survey conducted in early to mid-December 2001, they were still very much under the impression of the terrorist attacks in New York: one in three respondents (33%) were unsure and wanted to fundamentally change their holiday plans - from choosing a different means of transport to not travelling at all. During the Gulf crisis ten years ago, when the B.A.T Institute conducted a similar survey, this proportion was only 18 per cent.
In the meantime, New York and Afghanistan have receded into the background as current crisis reports. As a result, the crisis of confidence among the population with regard to the safety of travelling is also subsiding. The feared conflagration of almost global proportions is not taking place in tourism. Moreover, the experience of recent years has taught us that "tourists have a chronic short-term memory and do not grieve," says Professor Opaschowski. "This protective and valve function is necessary in order to keep life worth living and to save the holiday idea of ‘nice holidays".
Experience over the last thirty years has proven this: International crises or terrorist attacks have not been able to permanently change the travel behaviour of holidaymakers. At most, there have been temporary changes in the direction of travel flows (e.g. away from Egypt, Florida or Turkey). Those who intended to go on holiday continued to do so even in times of crisis - sometimes with different destinations. The desire to travel was neither stopped nor permanently curbed.
The current impact of the crisis and recession on tourism is therefore quite manageable and predictable - provided that neither escalates further. The feared "travel cancellations like sand on the sea" will not occur. Holiday plans will only change temporarily - but travel intentions will remain stable for most German citizens. The tourism industry will have to be prepared for temporary restraint on the part of customers as well as rebookings and rescheduling, but will not have to fear a catastrophic slump. Opaschowski: "As was the case during the Gulf War, local destinations at home are benefiting more from the uncertain global political situation."

Review of the 2001 travel season
Skid marks in travel behaviour

Looking back, the 2001 travel season was dominated by 11 September. The international crisis left its mark, even if it was only partially responsible for the development of the year as a whole. The travel intensity of German citizens who travelled for at least five days on holiday reached its lowest level since German reunification (1991: 53% - 2000: 52% - 2001: 51%). This decline can also be seen in longer holidays lasting more than two weeks (1991: 44% - 2000: 42% - 2001: 41%), while interest in short trips of 2 to 4 days increased slightly (2000: 4% - 2001: 5%). The uncertainty on the travel market, but more so the economic development, had a significant influence on the declining travel intensity and the trend towards shorter trips.

Domestic destinations 2001
High in the north: Baltic Sea before North Sea and Bavaria

Holidays in their own country became more attractive again for German citizens last season (2000: 31% - 2001: 34%). Many travellers have made a virtue of necessity and rediscovered local destinations that can be reached without a flight. The high in the north continues. The Baltic coast (2000: 6% - 2001: 8%) in Schleswig-Holstein and Mecklenburg-Western Pomerania is the most popular of all holiday regions in Germany and the holiday regions on the North Sea maintained their strong position (2000: 6% - 2001: 6%).
There are tentative signs of a renaissance in mountain and Alpine tourism. The Bavarian holiday regions have been able to halt the almost landslide-like losses of recent years (1996: 9% - 1999: 8% - 2000: 5%). Eastern Bavaria/Upper Bavaria/Allgäu were able to gain ground again slightly in 2001 (6%). The battle for market share within Germany is tending to shift: now it is more a case of "Baltic versus North Sea" and "Mecklenburg-Western Pomerania versus Schleswig-Holstein". The waves here could rise even higher in the coming years.

Destinations abroad 2001
Spain continues to lose market share

More and more Germans have felt ready for a holiday in the Mediterranean in recent years. Spain seemed to be programmed for double-digit growth rates. The holiday destination had an unrivalled track record (1993: 10% - 1995: 11% - 1997: 15% - 1999: 17%). Since then, however, Spain has suffered losses (2000: 16% - 2001: 15%). The Spanish growth market can no longer deny its downsides. Opaschowski: "In many centres of Spanish mass tourism, the price-performance ratio is no longer right. In many cases, the level of previous years cannot be maintained or further increased." Psychological saturation limits set in when the quality of life and the experience value of the trip are impaired by overcrowding on site.
Spain is also increasingly feeling the effects of the growing attractiveness of Turkish destinations in particular (1999: 3% - 2000: 5% - 2001: 6%). By contrast, other classic holiday destinations such as Italy (1999: 7% - 2000: 9% - 2001: 8%) and Austria (1999: 5% - 2000: 7% - 2001: 7%) continued to hold their own.
The long-haul market remains - for financial reasons alone - only an attractive supplement (and not an alternative) to Mediterranean holiday destinations. The big breakthrough is still a long time coming. Only the Caribbean, in particular Cuba and the Dominican Republic, showed a slight upward trend last year (2000: 1% - 2001: 2%). Trips to the USA are also stabilising again (1990 - 1999: 2% - 2000/2001: 1% - 2002: 2%). The pent-up demand is recognisable. In the long term, however, USA and Caribbean destinations will not be able to compete with the Mediterranean holiday destinations of Germans.

Crisis-conscious travel behaviour
What does that actually mean?

Travelling in times of crisis has a long tradition: from the oil/energy crisis in 1972 to the Gulf War in 1991 and the Afghanistan crisis in 2001, German holidaymakers have learned to live with temporary or latent crises. In this respect, last year's developments can be attributed more to the general economic situation. In 2001, Germans reacted in three ways. They travelled closer, less and for shorter periods:

• They chose more short-haul destinations. Compared to the previous year, significantly more domestic trips were in demand (2000: 31% - 2001: 34%). Fewer trips were made to neighbouring European countries (2000: 59% - 2001: 56%), while non-European countries (2000: 9% - 2001: 9%) did not suffer any noticeable losses over the year as a whole.
• The proportion of holiday trips lasting more than five days fell slightly from 52 per cent (2000) to 51 per cent (2001). At the same time, the proportion of short trips of 2 to 4 days rose slightly from 4 per cent (2000) to 5 per cent (2001).
• On a statistical average, there was also a slight decrease in the average duration of journeys (2000: 14.8 days - 2001: 14.2 days).

So: less wanderlust, more holidays in your own country. Otherwise, take it easy, wait and see and standby tourism.
Accidents cause traffic jams, as do crises and recessions. The backlog of demand in the travel business will soon ease. There are many indications of an early booking boom next year. Experience shows that one year after the Gulf War, the travel intensity of Germans rose abruptly from 52 per cent (1991) to 58 per cent (1992), giving the tourism industry a new record year. Consumers tend to make up for lost time. By then at the latest, the industry will be able to hit the ground running again.

Destinations 2002
Germany and Italy on the upswing

Holidays in Germany could be the winner of the tourism crisis in the coming season. Last year, 20 per cent of Germans who wanted to travel opted for a holiday in their own country. This year, the figure is 23%, which corresponds to an extrapolated growth rate of around 1.9 million holidaymakers.
For over thirty years, Spain, Italy and Austria have topped the German hit list of holiday destinations. This will not change in the coming 2002 season: Spain (13%) ahead of Italy (9%) and Austria (7%). However, Greece (6%) and Turkey (6%) are pushing ahead. Opaschowski: "The winners in the coming season will primarily be Germany and Italy, which are close and easy to reach by car."
Spain remains the undisputed leader among foreign travel destinations for the time being. However, the travel intentions here also show restraint compared to the previous year. At the beginning of 2001, 15 percent of those surveyed said they intended to travel to Spain; at the end of the year, 15 percent of German holidaymakers had actually been there. This year, only 13 per cent mentioned this desired destination. The downward trend in favour of Spain that has been observed since 1999 may continue in the coming season.

Indulge more than experience
German citizens change their consumption habits

In the 1960s to 1990s, the principle of private consumer behaviour in Germany was that holidays were the last thing to be saved on. Holiday travel was dear and expensive to Germans. In terms of consumption priorities, the "quality of life holiday trip" ranked before the "status symbol car" as a matter of course. Are the signs of the times now pointing in a different direction? Germany is on the brink of recession, the economy is in the doldrums in many sectors, unemployment continues to rise and, last but not least, consumer confidence has been unsettled since the terrorist attacks in New York. The consequences are a declining willingness to spend in private households combined with the search for security ("fear savings") and safe investments.
The travel industry is also suddenly facing increased predatory competition because Germans' financial room for manoeuvre is becoming significantly smaller. The travel industry is now feeling the effects of this development in two ways - as a crisis and a recession. How is the gloomy mood among consumers affecting the importance of holidays? Is a rethink taking place in which the quality of life at home (home, food and drink, clothing, car) is becoming more important? A comparison of the years 1998 and 2001 shows that eating and drinking (+3 percentage points), housing (+4), clothing (+2) and cars (+5) are among the winners of the economic crisis, while holiday trips (-3) and going out (-2) are temporarily losing importance. Germans are currently finding it less difficult and less painful to cut back on holiday spending. This is the result of the representative survey on consumer priorities conducted in December 2001.
Indulge more than experience: This is the positive response from consumers in uncertain times. Well-being that comes from within is being chosen as a viable path to well-being. Wellness is the order of the day and the formula for success for holiday providers who no longer just sell "travel", "transport" and "accommodation", but are also supposed to guarantee enjoyment of life and well-being for a while: Service, cleanliness and safety, climate, culture and cuisine, hospitality, cosiness and a sense of security. The desire for loud events, quick adventure trips and limitless adventures is limited for the time being. Professor Opaschowski: "The tangible and perceptible are becoming more important than the presentable and demonstrable. We are seeing a shift from affluent tourism to feel-good tourism." Seen in this light, the travel industry will remain a growth sector if it knows how to read the signs of the times correctly and uses appropriate motivation and marketing campaigns to make people really "want to go on holiday". A great opportunity for Germany as a holiday destination

Technical data of the TA 2002 survey, results of the 18th German Tourism Analysis

Number and representation of respondents: Germany; 5,000 people aged 14 and over
Survey period: 8 to 23 January 2002
Survey institute: INRA Germany; Gesellschaft für Markt- und Sozialforschung mbH, Mölln
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