Germany

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According to the DRV travel association, German travel management companies generated sales of €3.6 billion, around 46 per cent of the total sales generated by travel agencies. This is down from €4.9 billion euro (48%) in 2020 and 7.8 billion euro (29%) in 2018 which shows that business travel in the country has been helping to sustain the travel industry as a whole during the pandemic.

The association also reported that the number of business trips made by German companies slumped from 195.4 million in 2019 to 32.7 million in 2020, a trend which looks to have continued in 2021. The spending on those trips, not only including elements booked through TMCs, fell from €55.3 billion to €10.1 billion.

These ongoing shocks have caused ripples, dare I say tsunamis, in Germany’s TMC sector.

In March 2021, ATPI Group acquired Hamburg Süd Reiseagentur GmbH from Danish shipping conglomerate A.P. Moller - Maersk. The Hamburg-based agency specialises in the field of business travel management, leisure cruises, cargo ship trips and events.

At the time, Adam Knights, regional managing director Europe & Middle East at ATPI, said: “The Hamburg region has been a strategic priority for ATPI, and we are delighted to have found the right partner at the right time. Our Nordic marine businesses in Norway and Denmark, and Southern European marine businesses in Greece and Cyprus have all highlighted the need to be physically present in Hamburg. The agency staff and knowledge of those staff based on their historic ownership was a critical requirement for ATPI. We were particularly impressed with the corporate client base of Hamburg Süd Reiseagentur and believe existing clients will benefit from the expanded global reach of the ATPI footprint along with additional technology solutions.”

That same month, Oberhausen-based Baldaja, the online travel management company which had a partnership with BCD Travel, filed for insolvency. The company generated around €35 million in sales and employed 35. An attempt to diversify into virtual events with its baldaja connect platform within a few weeks of the start of the pandemic proved unsuccessful.

The biggest shock to the sector came in December when TUI announced it would discontinue the business segment of FIRST, with little or no advance notice to the company’s franchisees.

Handelsblatt reported at the time that Tui works council chief Frank Jakobi said there could still be opportunities in supporting small and medium-sized companies. “This is how the division at Tui started, and the price pressure tends not to be as high as with major customers,” the paper said.

Speaking to BTN Europe, a TUI spokesman said, “We are in the middle of that restructuring process and some FIRST Business Travel employees went to other industry players. TUI will focus on the leisure segment which also rebounds faster than business travel.”

Those going to other players included Holger Bleckmann and Christoph Zilt who moved to Comtravo, the online travel management company that was acquired by TripActions in February 2022.

Some travel agencies have already started to switch allegiance. First Reisebüro Mönchengladbach joined the Lufthansa City Center franchise in December, for example.

The outlook for business travel is not much brighter. The German government’s economic advisers recently slashed the forecast for GDP growth for 2022 from 4.6% to 1.8% and predicted an improvement to just 2.4% in 2023.

Announcing the lower figures, advisory council member Volker Wieland said that Germany had still not recovered from the coronavirus and that Russia’s war in Ukraine had “drastically worsened economic conditions”, adding that the risk of a recession on the country was now “susbstantial”.