Structural Changes in the German Travel Market – Part 4: Travel Distribution

Structural Changes in the German Travel Market – Part 4: Travel Distribution



In stationary travel distribution, massive price changes are not expected on the basis of price parity. In online sales, on the other hand, consolidation and a change in the value added can be expected.

Thesis 1: Stationary travel distribution will only develop selectively

Thesis 2: Efficiency and quality of added value in sales must increase

Thesis 3: Search engines sustainably change the value creation logic in sales

Thesis 1: Stationary travel distribution will only develop selectively

Growth rates in stationary travel distribution have been at the inflation level for quite some time. In particular, group-dependent travel agencies will no longer develop in terms of numbers, but above all in terms of revenue structure and level.

Despite low growth rates, however, a strong wave of consolidation in the travel agency business can not be expected. The key reason for this is the commercial agent status, which continues to ensure price competition at distribution level and equal opportunities between distribution channels.


With existing price parity, the consolidation pressure is reduced, which is why no significant changes are to be expected

Thesis 2: The efficiency and quality of value creation in sales must increase

In the overall view of online and offline sales,  the pressure on the value-added efficiency in sales increases. In the future, the sales value-added stages will be digitized or automated by new market participants and thus gain in efficiency. This applies to all phases of sales, from product delivery, to inspiration, to booking.

Closely related to this are multichannel and omnichannel approaches. Especially for complex and complex travel arrangements and a high shopping cart value, customers still have a great need for trust, security and proximity. Therefore, online and offline sales have to be precisely tailored in order to offer the customer an optimal travel booking experience. For example, the customer is advised online and makes the booking together with a service employee in the travel agency.


Growth prospects v.a. for sales organizations with structural adjustments in customer approach and support via omnichannel approach.

Thesis 3: Search engines sustainably change the value creation logic in sales

The importance of search engines such as Google or Bing in the travel distribution market will continue to increase, as the sales value added is shifted from the actual booking to the needs assessment and booking decision. In this way, customers are picked up very early in their search and inspiration process and fed targeted service providers

Figure: Shift in sales value creation using Google as an example

Thus, search engines supported by AI take over the determination of needs and advice and compensate for the most important added value of a travel agent (online or stationary). The basis of the needs assessment is no longer conventional CRM but the comprehensive use of artificial intelligence, wisdom of crowds, tracking of tourist behavior in the destination, etc. It is expected that significant portions of customer inquiries will run on search engines in the future and will be answered there. The takeover of this service makes travel agents increasingly obsolete.

Due to these developments, it is becoming increasingly important for touristic service providers and event organizers to create relevant offers and place them on search engines. As a result, the prevailing remuneration model changes permanently. The service provider no longer honors the booking but the positioning of the service offering in the purchase process of the customer.


The compensation logic in sales will change: Payments will be made primarily for the visibility of the customer and less for the financial statements.

Thesis 4: Consolidation is already a reality in online sales

Consolidation approaches are already evident in online sales, as the acquisitions of Booking, Expedia and Invia show.

A comprehensive consolidation of the sales market is to be expected if a high-reach portal with a global brand adapts the business model, for example from Amazon or Alibaba, and transfers it to travel distribution. The focus is on customer centricity, comprehensive platforms, a combination of fast-moving and less fast-moving products, simple integrated payment systems, simple exchange and cancellation processes, and the implementation of reviews and recommendations.

Fugure: Busines Model Amazon (exemplary presentation)

The example of Booking Holdings shows that individual tourist players are already relatively advanced in this approach.

Thus, the services offered by Booking Holdings are becoming increasingly comprehensive and integrated. In addition to the classic tourist products, which an average user relatively rarely uses, fast-moving products that can be used several times a week are offered. Through these, the connection to the platform is sustainably increased by, for example, a high user affinity and existing brand sympathies are used.

Figure: Possibility of a future Amazon based business model for a distribution platform (example Booking Holdings)


The “Amazon of tourism” is already in the door and will exert an absorbing power in the market.

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