GERMAN tour operators are predicting that the devaluation of the euro can turn the tide for Asia, especially if sellers play their cards right and are level-headed about pricing.
While the impact of the falling euro is not being felt yet, as the big tour operators have hedged the exchange rate and are able to sell their packages at the rate of last summer, pricing will be a big issue for 2016, they said.
Asia could seize the opportunity to grab back German tourist flow to the west – Caribbean, Mexico, Latin America – which has been going on since last year, they added.
“Latin America, for example, is running well but we feel it has reached its pricing limits and, with the US dollar being more expensive, it is getting more difficult to sell,” said Holger Baldus, managing director of Marco Polo Reisen.
“In this price-conscious market, (German travellers) may defer their trip there to two or three years later and shift to value-for-money countries.”
This could cause a flow back to destinations such as Vietnam, Thailand and Sri Lanka, said Baldus, pointing out that land costs for a similar tour in Vietnam are half that of Latin America, while airfares and connections are better to the Far East.
Michael Frese, CEO of DER Touristik, which operates DERTOUR, Meier`s Weltreisen and ADAC-Reisen, said German tour operators, not just his company, have seen a tremendous increase to the West, possibly due to incidents such as the coup in Thailand and the Malaysia Airlines accidents, aside from those destinations themselves being affordable.
“We all have seen big increases – 50 per cent or so – to the Dominican Republic, Cuba and even smaller places like St Lucia and Barbados. As well, the Indian Ocean – Sri Lanka, Seychelles and Mauritius. But this can easily change in the coming winter when the price relation between, say, Thailand and the Caribbean, then becomes much bigger (due to the devaluation).
“If hotels in Asia are not increasing rates too much, if the Asian destination has no or small inflation only, and if there are no big currency fluctuations – say the Thai baht falls against the euro – then there could be a shift (back to Asia),” said Frese.
Read the full story in TTG Asia-ITB Berlin 2015 Daily
