The economic sentiment among German travel agencies and tour operators deteriorated further in June. The key business climate indicator from the Ifo Institute for Economic Research fell from minus 30,3 to minus 32 points compared to the previous month of May.
According to industry analysts, this decline primarily reflects the ongoing uncertainty among consumers related to the military conflicts in the Middle East. While long-haul destinations experienced a noticeable drop in demand, travel to Southeast European and Mediterranean destinations remained stable. At the same time, although travel providers' price expectations showed a slight downward trend, air ticket prices for consumers remained at an elevated level compared to the previous year.
Industry sentiment trends and geopolitical factors
The development of the business climate in the tourism sector illustrates the sector's vulnerability to international conflicts. In February 2026, before the outbreak of the escalating conflict involving Iran, the Ifo Institute's business climate indicator stood at minus 15,6 points. The subsequent downward trend began with the first effects of the military rollout and continued into early summer.
Research by market scientists and economic experts shows that uncertainty among potential vacationers at the beginning of the year led to a reluctance to book early. Nevertheless, experts at the Ifo Institute believe that catch-up effects are possible over the course of the summer. It is assumed that consumers who postponed their booking decisions in the spring could make last-minute decisions for the peak travel season.
Differentiated development of traffic figures by destination area
Despite the general decline in sentiment in the service sector, passenger numbers at Germany's main airports present a mixed picture. The total number of air passengers fell slightly by 0,2 percent between January and May, a decrease primarily attributable to waning interest in long-haul travel. Destinations in Asia, North America, and parts of the Middle East recorded declines in bookings.
In contrast, demand for destinations in the Mediterranean region proved to be stable to slightly increasing. Statistical data for the first five months of the year show the following changes in passenger numbers for departures from Germany:
- Croatia recorded an increase of 4,2 percent.
- Greece recorded an increase of 3,6 percent.
- Turkey's share price rose by 2,7 percent.
- Italy recorded an increase of 1,0 percent.
- Spain's figures were at the same level as the previous year.
These figures illustrate a shift in travel flows towards closer holiday regions within Europe and the eastern Mediterranean that are perceived as more stable.
Cost trends for fuel and airline tickets
A key factor influencing the economic situation of airlines and tour operators is the fluctuations in the crude oil market. In May and June 2026, a temporary decline in jet fuel prices was observed, leading to a slight cooling of price expectations among travel companies. The proportion of companies anticipating further price increases for their services decreased in June.
Nevertheless, kerosene costs remain at a level significantly higher than before February 2026. Market observers point out that crude oil prices already saw increases again in July, which, if the geopolitical situation between the US, Iran, and Israel continues or worsens, could lead to further cost increases for airlines.
For consumers, the temporary calming of the commodity markets has not yet translated into lower retail prices. In the first half of 2026, airfares for flights to other European countries were on average 11,5 percent higher than in the same period of the previous year. In addition to fuel costs, increased air traffic control and airport fees, as well as capacity adjustments by airlines, also contributed to this increase.
Economic framework for travel providers
The combination of changing booking times, higher transportation costs, and a shift in flight destinations presents travel agencies and tour operators with business challenges. While short- and medium-haul travel supports capacity utilization, providers are missing out on the often more profitable sales in the long-haul travel sector.
The further development of the sector in the second half of 2026 depends significantly on the extent to which short-term last-minute business can compensate for the losses of the early booking phase and how the geopolitical environment affects the fuel markets.