Fewer agencies and stagnating sales

More travel agencies in Germany are going out of business due to stagnating sales and lower commission payments. But online sales are booming, an FVW survey found.

As many as 773 German travel agencies closed down in 2006, according to the latest annual survey by FVW. There are now only 11,866 full-time travel agencies in Germany compared to 15,000 eight years ago. They are competing in a stagnating market with falling commission payments and more competition from online retailers and direct sales. German travel agents increased their combined revenues by only 0.7% to €20.83 billion in 2006, according to the annual FVW survey of German travel agencies. The average profit margin lies between 0.5% and 1%. For 2007, German travel agents are targeting sales growth of up to 3%, although this was also the target figure last year.

Rewe Touristik, with its agency chains Atlas, DER and Derpart, remained the largest German travel distribution organisation last year with turnover of €4.3 billion. Number two was the QTA consortium with sales of €3.7 billion, ahead of rival consortium TMCV (turnover: €2.5 billion). TUI Leisure Travel (turnover: €2.4 billion) was number four ahead of business travel agency BCD Travel (the former TUI division) and Lufthansa City Center. FVW surveyed 22 organisations accounting for 97% of total travel agency sales.

Online travel sales of the top 30 portals grew to €2.4 billion last year from €1.7 billion in 2005, according to the FVW survey. The clear online market leader was Deutsche Bahn ahead of Expedia and Opodo.