Germans Increasingly Eager to Travel to European Destinations
Consumers in Germany are once again spending more money on trips to other European countries. This is a finding of a recent analysis by the ifo N26 Economic Monitor. “As the 2021 vacation season kicks off in Germany, consumers are once again feeling the urge to get away from it all. Nevertheless, for many, the incalculable risks of long-distance travel during a pandemic are too high. These include travel bans, mandatory quarantine, and inconvenient or uncomfortable Covid-19 rules at the destination,” says Oliver Falck, Director of the ifo Center for Industrial Organization and New Technologies.
Since the beginning of 2021, consumers from Germany have been steadily spending more in other European countries. In May 2021, this actually rose past pre-crisis levels for the first time. “This is an important economic driver for European tourist areas,” Falck says. When economies reopened in the summer of 2020, people in other European countries spent only 20 percent less than before the crisis. In contrast, spending outside Europe has remained consistently below 50 percent of pre-crisis levels since the first lockdown up through June 2021.
The travel industry in Germany is also benefiting from people’s renewed desire to travel. Spending on domestic and international travel has increased rapidly since March 2021, returning to 80 percent of pre-crisis levels in June. “How quickly the travel and tourism industry in Germany and abroad can recover will depend heavily on the progress of vaccination campaigns, the spread of additional virus variants, and hopefully only a small fourth wave,” Falck says.
The analysis was carried out as part of the ifo N26 Economic Monitor, a collaboration between the ifo Institute, TU Munich, and N26. By analyzing aggregate spending patterns, the researchers can measure certain aspects of economic recovery. Key indicators are consumer spending and savings of N26 customers in the largest European economies.
