For many, it is the first long-distance trip after the Corona pandemic, but holidaymakers have to dig deeper than ever into their pockets for package tours and even more so for flight tickets in the current holiday season. The Federal Statistical Office registered significant price increases for these services in the first half of 2023 – well above the already high rate of inflation of 7.5 percent. In view of the high level of advance bookings and tight capacities on the German market, the airlines expect well-utilized jets and thus high prices per seat in the coming months.
For international flights, the average price premium in the first half of the year was 24.9 percent, as reported by the Federal Statistical Office on Tuesday. Prices for destinations in Asia and Australia grew particularly strongly, although there was still very weak demand there at the beginning of 2022. The smallest increases were in domestic flights, to Africa and South America, which are not so relevant to tourism. The European flights, which are particularly interesting for tourists, were almost 32 percent more expensive.
In a recent study by credit insurer Allianz Trade, the aviation industry is returning to profitability earlier than expected, despite higher kerosene prices. In the second quarter of this year, the Lufthansa Group, which had just been rescued by the state, expected 25 percent more sales for each seat offered and, as a result, a record summer. Because all airlines sell their tickets according to the basic principles of supply and demand.
The airlines have set up complex systems in order to optimally utilize every flight with the highest possible revenue. In addition, the prices of the competition are observed just as closely as the interests of the customers. At the very beginning of the booking process, the prices are still at their lowest and rise steadily the more fully booked the plane is and the closer the start gets. Within the comfort classes, the tickets are divided into so-called booking classes, each of which represents a price level.
Despite all the climate concerns, many people in Germany want to go on vacation by plane again, but at the domestic airports they are faced with a reduced offer of around 85 percent of the level before the pandemic, reports the industry association BDL. As a result, seats are scarce and correspondingly expensive. Reasons are a lack of staff for handling, delivery problems with new aircraft and high additional costs, which allow low-cost airlines such as Ryanair or Easyjet to switch to other markets in Europe.
According to their boss Michael O’Leary, the Irish are also avoiding Lufthansa’s strong market position in German-speaking countries. The result of their ticket prices was that “the Germans paid the highest airfares in Europe on short-haul routes,” the Ryanair boss told “Manager-Magazine”.
After the end of the Corona travel restrictions in spring 2022, package tours have also risen significantly in price, albeit not as much as air travel. For domestic destinations, the tour operators added 14.5 percent, while abroad an average of 10.0 percent was required. Popular destination regions such as Greece and the Balearic Islands are even more expensive, each with a price increase of 13.5 percent.
The price comparison portal Check24 only sees an average price increase of eight percent for package tours, close to the general level of inflation. “The increased operating costs of airlines and hotels are passed on to the travelers,” says the responsible managing director Martin Zier. Cheap offers can be found at short notice.
However, bargain hunters shouldn’t rely on last-minute bargains like in previous years, says Ingo Burmester, head of Central Europe at tour operator DER Touristik. He also refers to the scarce seats on the plane: “In the short term there are not so many top offers from airlines because they have reduced capacities.”
The organizer is not giving holidaymakers hope for falling prices for the time being. “We expect price increases in Europe within the inflation corridor of around five percent for the winter,” said Burmester. The trend towards higher-quality travel is continuing. “A small proportion of guests are currently not booking, possibly because they cannot afford it due to inflation.” For many others, on the other hand, the trend is towards higher-priced trips with higher hotel categories and high-quality all-inclusive packages.
Industry leader Tui is also benefiting from people’s renewed desire to travel, with increasing booking and sales figures. Sales in Germany are already back at the pre-corona level, said a Tui spokesman in Hanover. “In terms of the number of guests, we assume that we will close the gap this year.”
Recently, travelers also had to dig deeper into their pockets for package tours: they cost 10.2 percent more than in the first half of 2022. Within Germany, prices rose more here (14.5 percent) than for package tours abroad (ten percent). Overall consumer prices in Germany rose by 7.4 percent in a half-year comparison, the statistics office said.
