1 Relaxation in the tourism industry
Now that most of the restrictions to contain the corona pandemic have been loosened, there are still major restrictions for many sectors. For example, there are still travel restrictions in many countries that prevent or severely delay a return trip from the respective country to Germany. For this reason, the Federal Foreign Office advises against non-essential tourist travel until 14 June 2020.1
In addition, checks are still carried out at the internal EU borders. Although the Federal Interior Minister Horst Seehofer decided that border controls should be gradually relaxed from 16 May 2020, he also warned that citizens should continue to refrain from unnecessary travel. If the number of Corona cases remains low, border controls will be lifted by 15 June 2020.2
Despite these circumstances, some airlines have already announced the resumption of some flight routes, although not all of them. Ryanair, for example, announced that it would resume 40% of its operations from 1 July 2020, subject to the easing of restrictions. Around 1,000 flights are then to be able to take off daily from most of its locations in Europe, after previously being restricted to 30 flights between Ireland, the UK and the EU.3
Lufthansa, SWISS and Eurowings have announced an expansion of their flight operations already for June and will be flying to a total of 106 destinations in Germany and Europe, including holiday destinations such as Mallorca, and 20 intercontinental destinations. By the end of June, the offer is to be increased to 1800 flights per week.4 For this purpose, the fleet would be doubled from the current 80 to 160 passenger jets. 5
Tui is also currently preparing to resume tourism operations. In an interview, CEO Fritz Joussen assumed that although flight, hotel and cruise operations would remain restricted - in addition to hygiene measures, reductions in room allotments and reduced or modified sports and leisure facilities, more days at sea instead of on land should be spent on cruises - they could be resumed as soon as the EU restrictions are relaxed.6 Tui plans to resume domestic tourism operations from 25 May 2020.7
2 Prospects for the tourism industry
At different times, but usually from the middle to the end of May, the federal states allow accommodation in hotels and lodgings for tourist stays as long as conditions such as distance regulations and hygiene measures are met and controlled. Dormitories, swimming pools, sports areas and saunas must usually remain closed. In most federal states the restrictions will probably remain in force until mid-June at the latest, but in Lower Saxony the restrictions are expected to remain in force until the end of August.8
At the end of April, the Federal Competence Centre for Tourism published forecasts of optimistic, realistic and pessimistic scenarios for the further economic development of the tourism industry. The developments in the individual scenarios relate strongly to the presumed duration of the travel restrictions.
According to the report, tourism would continue to record only low turnover until the onset of easing measures, after which turnover could rise again quickly. It is possible that the phase of relaxation in domestic tourism could end in August 2020, so that the lifting of further travel restrictions could be expected. While domestic tourism could already have returned to normal by Easter 2021, the analysis currently assumes that the situation at a global level will only ease by the same time.
Expressed in figures, the scenarios assume that, in the best case, domestic tourism could already return to 60% of the booked turnover of the same period last year by mid-June. In the worst case, the easing phase would continue until the end of the year, resulting in booked turnover of only 30%. In the best case, a revival in tourism could occur from mid-June to the end of September and result in booked turnover of 80%. The industry would thus return to normality between October and December this year. However, if the easing period actually lasts until the end of December, the industry could not experience a revival until 2021 as a whole, with booked turnover of around 50%. The industry would then only return to normality between January 2022 and October 2023.
International tourism could record between 20% and 40% booked turnover during the relaxation phase, experience a revival between October 2020 and July 2022 with between 30% and 70% booked turnover and then, depending on the scenario, return to normality either between January and September 2021 or by October 2024.9
However, the actual development in the tourism industry depends on the further course of the pandemic. Prof. Jürgen Schmude, President of the German Society for Tourism Studies, notes that tourism could also lead to a new wave of infection and thus cause renewed restrictions. While hotels and restaurants or even beaches are able to establish methods for keeping physical distance, day tourism and thus larger gatherings of people in tourist locations cannot be controlled. In his mind, a further danger for the tourism industry is the possible emergence of competition. If a price war were to take place to attract tourists, this could be just as devastating for the industry as the actual lockdown itself.10
For the hotel and restaurant industry, the easing of the rules seems to be vital for survival. At the end of April, the President of the German Hotel and Restaurant Association (DEHOGA Bundesverband) Guido Zöllick spoke of a rise in unemployment in April in the German hotel and restaurant industry of 208.2 percent compared to the same month last year, of more than one million employees on short-time work and of the fact that the liquidity support provided so far was not sufficient, had not been granted or that the reimbursement of the short-time work allowance for March had not yet taken place for most companies.11
On May 6th, the DEHOGA Federal Association therefore commented positively on the relaxation: "We welcome the fact that there are finally concrete opening perspectives for the hotel and restaurant industry in the individual federal states. [...] Most establishments are in the eighth week of closure with zero turnover and continuing high fixed costs. [...] It is therefore right and fitting that the Minister Presidents act now in a balance between responsibility for the health of the people in this country, but also responsibility for the economy", said Zöllick. However, the industry continues to demand state support, as many companies would only have a chance of survival with this support.12
Despite the cautious optimism, the further development of the German economy and the survival of individual companies continues to depend on the course of the corona pandemic. If renewed increases in the number of infections do not force a reversal of easing measures, it can be assumed that the sectors will slowly recover when the easing measures come into force. However, the emphasis remains on slow for sectors such as gastronomy, accommodation and tourism, because on the one hand their capacities will remain well below 100% for the foreseeable future and it remains to be seen how sympathetic customers will react to the hygiene and protection measures or whether they will accept them at all.
For more information also see the report on general effects of the corona crisis on the German economy.
1 Auswärtiges Amt; Weltweite Reisewarnung für nicht notwendige, touristische Reisen (last viewed on May 20, 2020)
2 ZDF Nachrichten; Grenzen öffnen - aber nicht für Urlauber (last viewed on May 20, 2020)
3 Ryanair; Ryanair to restore 40% of scheduled flights from 1 July (last viewed on May 20, 2020)
4 Lufthansa; Lufthansa Group baut Angebot mit Juni-Flugplan deutlich aus (last viewed on May 20, 2020)
5 Frankfurter Allgemeine Zeitung; Lufthansa plant deutlich mehr Flüge ab Juni (last viewed on May 20, 2020)
6 TUI Deutschland GmbH; Interview mit Fritz Joussen (TUI Group CEO) (last viewed on May 20, 2020)
7 TUI Deutschland GmbH; Aktuelle Reiseinformation: TUI Info Coronavirus (last viewed on May 20, 2020)
8 DTV Deutscher Tourismusverband; Länderverordnungen zum Verbot touristischer Vermietungen (last viewed on May 20, 2020)
9 Kompetenzzentrum Tourismus des Bundes; Recovery-Check #2: Binnentourismus erholt sich deutlich früher als der internationale Tourismus (last viewed on May 20, 2020)
10 Wirtschaftswoche; „Tourismus wird nach Corona nicht derselbe sein“ (last viewed on May 20, 2020)
11 DEHOGA Deutscher Hotel- und Gaststätten Bundesverband; Aktuelle Zahlen zu Kurzarbeit und Arbeitslosigkeit - Corona-Schock im Gastgewerbe (last viewed on May 20, 2020)
12 DEHOGA Deutscher Hotel- und Gaststätten Bundesverband; DEHOGA begrüßt konkrete Öffnungstermine für Restaurants und Hotels (last viewed on May 20, 2020)