Business travel returned with a bang in 2022 in Germany. According to the DRV association of agencies, German travel management companies generated sales of €5.2 billion – around 34 per cent of the total sales generated by all German travel agencies, including leisure travel.

This sales figure is up 34% from €3.6 billion euro in 2021. While overall agency sales have still not recovered to 2019 levels, the market has rebounded from pandemic lows. However, the return to travel has brought its problems for the TMC sector.

Richard Thompson III, TMS project manager at pharmacy chain dm-drogerie markt and a member of the GBTA presidential committee, says, “Post-Covid, business travel exploded again and TMCs were not back to full work capacity. That led to a service gap and, as a result, widespread RFPs.”

Research by the German buyers’ association VDR found that more than 60% of corporates have experienced quality problems with their travel management company. The study also found that the consultation time and complexity of enquiries has increased.

Thompson says that, post-Covid, many TMCs have asked themselves “What do we want to be?” More TMCs are being asked for consultancy, particularly around sustainability.

The business travel industry in Germany has committed itself to help reduce carbon emissions but struggled with finding a common, standardised source of information. “Hopes rely on a European solution of conclusive data from one source to enable common comparison,” says Thompson.

“Business trips are being examined more closely, especially regarding purpose. Some companies have taken more drastic measures than others,” he adds.

Many German corporates have taken to bundling one-day trips into a single multi-day trip. “This contributes to a reduction of carbon emission as well as business trip spend,” says Thompson.

German companies also want guidance on mobility as a wider concept. “Finding effective and meaningful ways of working together starts with planning the path from the idea to reaching the goal,” says Thompson. “Travel, event and project management in combination with the given resources and getting them in place at the right time, providing the fitting form of workplace, is the future’s major challenge.”

Thompson doesn’t believe travel spend will be cut any further. He told BTN Europe: “One thing Covid has shown us is that working together demands more in-person experiences. In addition, bleisure travel has reached the industry with an unknown impact on spend. It's exciting to see where and how it will develop.”

Covid sent shockwaves through the sector in the depths of the pandemic and some of that played out in 2021 and 2022. German travel giant TUI closed its First Business Travel arm at the end of 2021. The company had said it would focus on leisure and that there might still be opportunities in supporting small and medium-sized companies.

The First Business Travel website now redirects to a section of the main TUI website promoting the TUI Business Travel Service which has service centres in Hamburg, Düsseldorf, Aschaffenburg and Ottobrunn. When asked about these business travel operations, a TUI spokesman told BTN Europe that Tui “don’t do business travel anymore since our core competence is leisure travel”.

The return to travel was embraced by other TMCs. Under the guidance of vice president Katja Vortmann, DERPart Travel Service (DTS) plans to expand its corporate business in the coming year. The expansion will also see the re-emergence of a familiar name on the scene. Amex GBT acquired DER Business from DTS’ parent DER Touristik in 2019 but the acquisition is now consolidated into GBT’s figures in our ranking. However, the parent now has control over its former trademark and the company will rebrand DTS as DER Business Travel. All of the existing DTS agencies are set to be rebranded by Q4 2023.

Despite the rebound of travel, the German economy is unlikely to help a faster recovery. Last year, the German government predicted an improvement in GDP of 2.4% in 2023 but the war in Ukraine dented that forecast and it now suggests a meagre 0.4% increase and just 1.4% in 2024.

Elsewhere in travel, a big change in the German market during the year was Lufthansa’s decision to modify the distribution cost charge (DCC) from 1 September. The previous standardised DCC of €19 was changed to €17.50 for bookings made through the Amadeus GDS, €19.50 for Sabre GDS bookings and €23 for Travelport GDS bookings. The airline said the adjustment was “in line with the Lufthansa Group airlines’ policy to increase transparency by reflecting GDS cost accurately”.

The move has put a brake on TMC revenues at a time when operations are becoming more complex while corporates are demanding more technology and are refusing to shift away from existing remuneration models. More will undoubtedly change during 2023.