Business cycle and tourism demand in Germany (FRG)

Importance of incoming tourism. Incoming tourism in the Federal Republic of Germany, which accounts for about 10 % of all overnight figures, is determined to a large extent by developments in the world economy, or to be more precise, by economic developments in the leading countries of origin for tourists. The downturn in the economy at the beginning of the 1980s was not restricted to West Germany alone. The economic crisis was and is a worldwide phenomenon. The leading countries of origin for tourists, the industrialized nations of Western Europe and North America, are even more severely affected by downturns in the economy and by unemployment than is the Federal Republic of Germany, OECD statistics, calculated in “real terms”, reveal for example that if we ignore the varying rates of inflation in the OECD member countries, there was a pronounced levelling off in the annual rates at which earnings grew in international tourism at the end of the 1970s, with a tendency towards stagnation at the beginning of the 1980s. It therefore comes as no surprise that a leading incoming country such as West Germany experienced a 2 % decline in the number of bednights by foreigners in 1981. In 1982 this fall in the number of bednights by foreigners continued; according to the Federal Statistics Office the decline amounts to about 3 %. Receipts from foreign tourists and business travellers felt in 1982 by about 2 % (nominally), which represents a distinct decline in “real terms”. The decline of incoming tourism in West Germany was especially marked during the period from September to December 1982. In view of the difficult world economic situation, foreign tourists and business travellers are also starting to economize on their journeys to the Federal Republic of Germany, according to the Deutsche Bundesbank. Although West Germany can still offer certain price advantages compared with other countries, due to a greater price stability and predominantly favourable exchange rates in 1982, worldwide negative economic influences still have a dominant effect on tourism demand in the incoming sector.