Germany – A giant of a market

  • Germany is Ireland’s third largest source market for visitors, headed only by the US and the UK.  Last year 436,000 Germans visited here, up just 4% on the previous year, and up a more impressive 44% on 5 years ago.  But up just 100,000 visitors, or a less impressive 43% on the numbers who came back in 1999.
  • There was no growth in visitors between 1997 and 2004, due primarily to the strains on the German economy brought about by unification.  Growth has been good since 2005, but the real question is, what is the true potential of this vast market?
    RTEmagicC_berlin.jpg
  • But first, a little bit about Germany itself.  Over 4 times the size of Ireland, it has a population of over 82 million.  As Europe’s largest economy and most populous nation, Germany is a key member of the Continent’s economic, political and defence organisations.  It is the third largest economy in the world, producing cars, precision engineering products, electronic and communications equipment, chemicals and pharmaceuticals, and much more besides.

    Frankfurt Skyline
    Frankfurt Skyline
  • European power struggles immersed Germany in two devastating World Wars in the first half of the 20th century and left the country occupied by the victorious Allied powers of the US, UK, France, and the Soviet Union in 1945.  With the advent of the Cold War, two German states were formed in 1949, the western Federal Republic of Germany (FRG) and the eastern German Democratic Republic (GDR).The democratic FRG embedded itself in key Western economic and security organisations, the EC, which became the EU, and NATO, while the communist GDR was on the front line of the Soviet-led Warsaw Pact.  The decline of the USSR and the end of the Cold War allowed for German unification in 1990.  Since then, Germany has expended considerable funds to bring Eastern productivity and wages up to Western standards.

    Munich
    Munich
  • Germany’s affluent and technologically powerful economy grew by 2.6% in 2007, but negative growth in 2008 is a possibility given the current global economic morass.  The modernisation and integration of the eastern German economy continues to be a costly long-term process with annual transfers from west to east of about €80 billion.
  • Germany has brought some wonderful music to the world through it’s many great composers including, Johann Sebastian Bach, Ludwig van Beethoven, Johannes Brahms, Georg Fredrick Handel, Gustav Mahler, Wolfgang Amadeus Mozart, Robert Schumann, Richard Strauss, Richard Wagner and many others.
  • And of course we must not forget the great Engelbert Humperdinck.  What? I hear you say.  Well, he was born in Siegburg in 1854 and worked as a teacher of composition until his death in 1921.  His fame and immortality are based on a single work, the fairytale opera Hansel and Gretel.  And you thought all along that Gerry Dorcey composed this?  Tut tut.

    Composer Engelbert Humperdinck
    Composer Engelbert Humperdinck
  • The Germans really like to travel.  They make about 75 million outbound trips each year, more than the French, Italian and Dutch markets combined.  70% of these trips, or 52.5 million, are for holiday purposes.
  • Almost half the outbound trips are to the Mediterranean.  The most popular destinations for German holidaymakers are Spain (17%), Austria (15%), Italy (13%), and France (7%).  3.4 million, or 4.5%, visit the UK, while Ireland’s share stands at just over half of one percent.Ten years ago Germany generated 28% of Continental European visitors to Ireland, but today this share has dropped to 17%.  In terms of holiday visitors from Europe the decline is less marked, dropping from 29% to 24%.  Almost all of the growth in recent years has been in the holiday segment.  Three out of four Germans who visit are here purely on holidays.
  • The West and the Southwest are by far the most popular regions to visit for German tourists, though Dublin has gained greatly in popularity in recent times.
  • There is a wide range of air services available to Dublin, Cork, Shannon, Kerry and Belfast Airports from Berlin, Bremen, Cologne/Bonn, Duesseldorf, Frankfurt, Frankfurt-Hahn, Friedrichshafen, Hamburg, Karlsruhe/Baden Baden and Munich.
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  • Interestingly the long-term trend is for the first and last quarters to gain share of annual traffic, and the peak to grow more slowly.
  • Hotels have trebled their share of bednights over the past 10 years, and for the first time ever in 2007 were more popular than B&B’s with German visitors.
  • Value for money has troubled an uncomfortably large number of these visitors, with over 30% of the view that they did not receive good value, a little more than the number who did believe that they got good value.  While in no way wishing to be sanguine about this issue, 2007 did see some improvement in this respect.  Let’s hope that trend has accelerated in 2008.
  • In summary, Germany is a large powerful and successful economy with a vast market of citizens who love to travel.  Discount the large numbers who head for the warm climes of the Mediterranean, and it is still a vast market.  It is bigger than the French, Italian and Dutch outbound markets combined.  Almost 3.5 million visit the UK, less than 450,000 visit Ireland.  And that’s only up by 100,000 in the last 10 years.  That’s a disappointing performance, and would appear to be well short of potential.  And what is that potential?  A 1% share of the German outbound market does not seem like an unreasonable target, that would be almost three quarters of a million visitors.  Unlike our two main markets, the UK and the US, there is no currency issue to worry about, so Germany should be targeted to deliver greatly enhanced performance in the coming years.
  • For much more information on this market of great potential, click here to visit the Tourism Ireland website.
  • Next up – the USA.
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