The coronavirus crisis is clearly affecting Germans’ holiday plans for the summer of 2020. Several recent, steady trends may come to an end. Over the last few years, almost 80% of the Germans regularly made holiday trips lasting five days or longer (2019: 78%). This percentage might drop to less than 75% in 2020. In April 2020, 14% of survey participants had already cancelled their summer holidays. More than 30% had not made any travel plans yet, and just above one-fifth had postponed booking due to the coronavirus pandemic. There are both demand-side and supply-side reasons for the decline in travelling in 2020. First, the recession has led to unemployment or short-time work and income losses; some households reduce their travel budgets in these circumstances. Second, some parents had to use up part of their holidays to care for their children during school and kindergarten shutdowns, which means that they do not have any free days left for holiday trips. Third, some people are not in the mood for a holiday or do not want to use mass transport due to coronavirus-related risks. Fourth, several popular holiday concepts cannot be realised (or realised only to a very limited extent) in 2020, so people prefer not to go on holiday at all. Fifth, package holidays (for example group tours) may be cancelled due to low numbers of participants or bankruptcy of tour operators. Sixth, flights to numerous destinations will be suspended this summer owing to insufficient demand or travel restrictions. And seventh, the Foreign Office has warned against travelling to most countries outside Europe during the summer. Still, we do not think that people are going to travel even less for their holidays; after all, the coronavirus situation has become much less severe in many European countries since April. Many of those who were undecided back then may be willing to take at least a short holiday. Some of those who cancelled their holidays early on may have decided on another trip to another destination by now. Nevertheless, people are likely to travel less for their holidays this year than in the preceding years. Most popular foreign destinations of German tourists: Spain in the lead
Most popular foreign destinations of German tourists: Spain in the lead
Most popular foreign destinations of German tourists: Spain in the lead
The car was losing ground as a mode of transport before corona
The car was losing ground as a mode of transport before corona
Germany: Deficit in international travel spending
Germany: Deficit in international travel spending
Sources: UNWTO, Deutsche Bank Research
International tourism: Tremendous corona breakdown
International tourism: Tremendous corona breakdown
Sources: UNWTO, Deutsche Bank Research
Sources: UNWTO, Deutsche Bank Research International tourism is one of the sectors hit hardest by the coronavirus crisis, both in terms of the extent and of the length of the crisis. Compared with the pre-crisis level, countries which generate a large share of their GDP from tourism will have to cope with losses for some quarters or even years. It will take considerably more time for tourism to recover and return to a growth path than after earlier exogenous shocks (09/11, SARS, terrorist attacks at holiday destinations). In the end, the coronavirus crisis cannot be overcome in full until a vaccination is available. Nevertheless, tourism will remain a global growth sector. People clearly want to travel and discover the world. Holiday trips are a superior good. As incomes rise, people spend disproportionately higher amounts on travelling. As soon as health risks from the coronavirus are minimised and ultimately eliminated, tourism will return to the growth path seen over the last few decades. Once the coronavirus crisis is over, climate and environmental regulation (in particular for the transport sector) will return as the main structural challenge for tourism. Better technological solutions for climate-friendly travelling will need to be developed. For now, command-and-control legislation to restrict travelling on climate grounds or attempts to make travelling considerably more expensive by hiking taxes or fees are unlikely to get a democratic majority.