Significant Decline in Revenue: Travel Association Reveals Over 80% Drop in Income
The COVID-19 pandemic has taken a significant toll on the travel industry worldwide, and Germany is no exception. The German travel industry, which employs approximately 2.9 million people, has been severely impacted, leading to closures and financial strain for many travel companies.
According to Norbert Fiebig, the President of the German Travel Association (DRV), travel warnings and restrictions have brought the tourism market to a near standstill. Fiebig predicts that travel companies will continue to be affected by these travel restrictions until well into next year. In fact, the crisis has caused an estimated 80% loss in sales for the German travel industry in 2020, amounting to around 28 billion euros.
To alleviate the financial impact, the German government has implemented several financial aid measures as part of broader economic stimulus and relief programs. One such measure is a €130 billion stimulus package adopted mid-2020, which included a temporary reduction in VAT until the end of 2020. This VAT cut aimed to boost consumer spending and thus indirectly support sectors including tourism.
Another key measure is the provision of non-repayable bridging funds for medium-sized companies affected by the crisis, with eligibility criteria based on annual turnover and revenue lost. These funds, announced in July 2020, aimed to help companies, including those in tourism, bridge liquidity shortfalls during the downturn.
To mitigate the impacts from the second lockdown starting November 2020, Germany introduced an "umbrella" aid scheme (Novemberhilfe) with an initial budget of €30 billion, targeting businesses, self-employed persons, and associations required to close. Tourism-related businesses heavily affected by lockdowns were among the key beneficiaries of this and subsequent related support schemes.
Application processes were set up requiring intermediaries like tax advisors to prevent misuse of funds, demonstrating the government's attention to targeted, responsible distribution of aid. While relevant search results do not explicitly list tourism-specific grants or subsidies, the wide coverage of these relief packages strongly indicates substantial support reaching tourism businesses through general business support and targeted schemes for affected sectors.
However, the financial situation of the German travel industry remains "extremely tense," with a high risk of insolvencies. Fiebig has urged the federal government to contribute to securing the structures of the travel industry amidst the financial strain caused by the crisis. He called on the government to provide additional support to ensure the survival of travel agencies, tour operators, and tourism service providers, many of which have been effectively closed due to political decisions over the past few months.
These combined efforts illustrate Germany’s strategic financial aid response to support the tourism industry amid the COVID-19 crisis. As the pandemic continues to evolve, it is hoped that these measures will help the industry recover and provide much-needed relief to the millions of people employed in the sector.
The financial aid measures implemented by the German government, such as the €130 billion stimulus package and the bridging funds for medium-sized companies, are aimed at boosting consumer spending and providing support to sectors like travel that have been significantly impacted by the pandemic. However, despite these efforts, Norbert Fiebig, the President of the German Travel Association, has urged the federal government to provide additional support to ensure the survival of travel agencies, tour operators, and tourism service providers, as the financial situation of the German travel industry remains "extremely tense."
In response to the second lockdown starting November 2020, Germany introduced an "umbrella" aid scheme (Novemberhilfe) with an initial budget of €30 billion, targeting businesses, self-employed persons, and associations required to close, with tourism-related businesses among the key beneficiaries. This aid, along with other relief packages, demonstrates Germany’s strategic financial aid response to support the tourism industry amid the COVID-19 crisis, and it is hoped that these measures will help the industry recover and provide much-needed relief to the millions of people employed in the sector.
