The Revival of Package Tours

Critical discussions about the future of package tours are feeling as old as the ITB Berlin Convention itself. Pessimis seemed legitimate in recent years, also in view of the bankruptcies of the European heavyweights Thomas Cook in 2019 and FTI Group this summer as well as the rather cautios restart after the Covid pandemic compared to individual travel. A look at the current situation in the German tour operator market gives cause for optimism. Tour operators are among the winners in the current tourism year.

It was apparently the tragic end of FTI Group that gave the tour operator market fresh energy. The shares in the European tour operator market, especially in Germany, was simply redistributed. Almost all operators are recording growth. Business is running smoothly. "The Germans' travel mood remained unchanged in the summer. Many holidaymaker simplx rebooked their planned summer trips booked through FTI in June and July," says Alexandra Weigand, Director Sales & Consulting at the research company Travel Data + Analytics (TDA).

"The vacation travel market is definitely back on track for success despite FTI's exit from the market," says Weigand. By the end of August, German vacationers had spent around 14.5 billion euros on their summer vacation. Without the FTI insolvency, it would have been significantly more, says Weigand. It is remarkable that both early bird and last-minute bookings were at their highest levels in 2024. According to TDA, only the insolvency month of June left a minus in the sales statistics, just as a negative snapshot. According to TDA, tour operator sales at the end of August were ten percent higher than in the previous year. For the entire 2023/24 tourism year, the increase in sales is twelve percent (see Fig. 1). Advance bookings for the current autumn holidays are also encouraging.

There are currently few signs that growth in the German tour operator market is slowing down. Early booking business is also booming for coming winter 2024/25. According to TDA, 40 percent of the package tour volume for the previous winter season had already been booked by August. This means that advance bookings were 21 percent year on year.

Andreas Wulfes, managing director of the analysis company neusta Data Intelligence (neusta DI), is also optimistic about the new tourism year up from November. "Very much suggests that the development will be stable," says Wulfes. At the end of September, winter bookings for package tours for high-volume destinations in the short and medium-haul fwere just above the same period last year. Only long-haul trips performed slightly worse in winter 2024/25. Leading destinations in pre-bookings for the coming winter, which also includes the high-demand Easter business, is currently Turkey, followed by Spain, Egypt, Greece and Tunisia (see Fig. 2). According to neusta DI, on long-haul routes, Thailand has taken over the top spot from the Maldives, followed by the United Arab Emirates, the Dominican Republic and Mauritius.

Room for Improvement on the long haul

According to neusta DI, tour operator’s package holiday bookings from Germany are 5.3 percent lower than the same period last year in total. The relative reluctance of German holidaymakers on long-haul flights fits in with the generally increasing demands of travelers for climate-friendly travel, but is a challenge issue for long-haul destinations.

So far it seems unclear whether the decline in long-haul destinations will remain a permanent trend. Early countermeasures may help. However, tour operators and destinations should invest in marketing promptly. "We know that long-haul trips are booked much earlier," says Michael Nisnik, Senior Data Scientist at neusta DI. Last winter, only 16 percent of bookings were made in the last-minute period of one month before departure. For short and medium-haul flights, the figure was 27 percent.

However, the market analysts do not see any serious cause for concern. "We are also expecting 2025 to be a good year for package holidays, in which supply and demand will be more in balance again," says Markus Heller, managing director of the consulting firm Dr. Fried Partner and member of the ITB Berlin Convention Board of Experts, responsible, among other things, for the design of the Tour Operator Track, which will take place on March 5, 2025 at ITB Berlin.

The balance between supply and demand is important for stable price development for package tours. After travel prices have risen significantly more than the number of bookings for tour operators over the past two years, the situation for holidaymakers could ease in the coming year. There is much to suggest that package holidays will remain affordable in summer 2025. There is no sign of another "FTI dip" in sight, which will reduce supply in the short term and cause prices to rise. And in the exceptional case of turbulence, the tour operator market is proving remarkably resilient to it. A new record year is possible. We will know more precisely at ITB Berlin 2025 from March 4 to 6, 2025 by the latest.