Whether the goal is to taste a wine, visit a restaurant or simply chat with the winemaker, wine tourism is booming – and gaining more political interest; in January 2020, the World Tourism Organisation (UNWTO) and the International Organisation of Vine and Wine (OIV) signed a strategic partnership. The attention can be attributed to, among other things, the fact that tourism was one of the most lucrative industries worldwide (before the pandemic) and was growing rapidly. In 2018, it generated $8.8 trillion and grew faster than the global economy for the eighth consecutive year. Tourism also plays an important role in job creation. According to the World Travel & Tourism Council (WTTC), one in five new jobs created worldwide in 2018 came from this lucrative sector. By the start of the pandemic, tourism had become responsible for 10% of global employment.
Obviously, Covid-19 had a strong – and devastating – influence on the wine tourism industry. This article contains results of a project carried out in 2017 and 2018, which was obviously pre-pandemic, but we believe it is relevant for the future when the pandemic is over.
Wine tourism is accelerating
Years ago, UNWTO identified wine tourism as a rapidly growing niche market. In some wine regions, it often has a greater economic impact than wine-growing itself. More importantly, wine tourism is seen as one of the keys to sustainable regional development by creating jobs, while at the same time protecting and promoting cultural heritage. Interestingly, the most intensive research on the subject did not come from traditional European wine-producing countries such as France or Italy, but from the New World countries of Australia, South Africa and Canada. These countries can look back on decades of experience; for many years, wine tourism has been an integral part of their national tourism strategy.
Seeing their success, European countries have also begun to research the phenomenon in traditional wine regions – after all, two-thirds of the wine produced worldwide comes from Europe. However, European research publications on the subject only account for 26% of the world’s total. Spain seems to be the most progressive European country in this regard, but also Italy and Greece have intensified their focus on wine tourism in recent years. Germany ranks seventh in terms of research publications in Europe, as does Croatia, but behind the UK. This article summarises the main results of a national wine tourism study in Germany, to help the country better exploit the potential of this lucrative market.
In order to research the topic in Germany, a two-year joint project between Geisenheim University and Wines of Germany (DWI) was launched in 2017. Three studies — a tourist survey and two winery surveys — were conducted in all 13 German wine regions. In addition to the two main bodies, wine growing and tourism associations from every German wine region were involved. The three specific objectives of the overall study were: first, to define the share of visitors in German wine regions that can be described as wine tourists and to determine differences to non-wine tourists; second, to estimate the economic impact of wine tourism in Germany, i.e. how much turnover and how much income it generates annually, and, third, to explore the importance of wine tourism from a winery perspective.
What makes wine tourists different?
In order to answer the first research question, a large-scale tourist survey was conducted in all 13 German wine regions. The target group of the survey were tourists of all kinds to German wine regions. To ensure that not only wine enthusiasts were surveyed, 10 ‘wine neutral’ locations such as city centres or culture sites were selected in every region, in cooperation with the regional wine-growing and tourism associations. A total of 4,478 tourists were interviewed.
The researchers developed a method to distinguish wine tourists from other tourists: first, the visitors were asked whether they visited wineries during their stay. Then, on a five-point scale, they indicated how important wine was for their trip. If the respondents had visited at least one winery and stated that wine was important or even very important for their journey, they were labelled Primary Wine Tourists. These Primary Wine Tourists were described as ‘real’ wine tourists and account for about 14% of all participants.
Compared to other tourists, Primary Wine Tourists had a higher level of education and income. Wine ranks first in the travel motivation of wine tourists, whereas for the rest of the tourists, landscape/nature and relaxation were the main motivators. Pairing regional food with wine was also significantly more important for Primary Wine Tourists. This reflects research results from other countries which show that, for wine tourists, it is not only the wine that counts but the culinary experience as a whole. This may be one of the reasons why the wine tourists surveyed in Germany spent significantly more money during their trip, mainly for wine and gastronomic services.
How big is the economic impact?
In terms of total contribution to GDP, Germany is the largest tourism market in Europe. According to the newspaper Die Welt, the sector generated €291bn (which includes indirect effects) in 2018. This makes it more important than the mechanical engineering sector, which is typically associated with Germany. The main reason for a higher turnover in Germany than in Spain, for example, is primarily due to strong domestic tourism: 85% of travel expenditure is accounted for by Germans who spend vacations in their home country. But how much is earned annually through wine tourism?
To determine this, the first calculation step was a simple one: the number of visitation days multiplied by the average daily visitor expenditure, which resulted in the gross tourist spending. After an elaborate procedure to define which districts in Germany could be called ‘wine regions’, the final number of visitation days could be determined. Finally, the daily travel expenses of tourists, as well as wine tourists, were identified for each of the 13 German wine regions.
The gross tourist spending of tourism, in general, amounted to €26.4 bn, of which approximately €5.0bn were attributable to wine tourism. According to this, the 14% of visitors who can be described as wine tourists generated a disproportionately high economic contribution of 19%. This is mainly due to the significantly higher daily expenditures of wine tourists compared to other tourist segments. Thus, wine tourism in Germany, including indirect effects, creates potential income for 71,846 persons. The researchers estimate the number of wine tourists in Germany at around seven million, of whom about 90% are Germans.
How much does it contribute?
In order to find out the importance of wine tourism from the producers’ point of view, two winery surveys were carried out. In total, 199 in-depth interviews and an additional 703 online questionnaires were collected from German wineries. The results of the qualitative in-depth interviews show that wine tourism is highly relevant for the success of the wineries. Winery operators were, for example, asked what they think the main advantages of wine tourism were. The most frequently given answer is that it ensures their survival. Several respondents stated that not only their own subsistence but also the subsistence of the whole winery family depend on wine tourism. Winery operators also emphasised the positive business effects of tourism, from increase turnover to acquisition of new customers, to overall regional benefits such as improved regional collaboration among stakeholders and the preservation of cultural landscapes.
The results of the online survey put the qualitative results in concrete terms: Wine tourism accounts for 24% of the wineries’ business turnover. The smaller the size of the winery, the higher is this percentage. For example, in the case of wineries with a production area of up to seven hectares, wine tourism services account for more than a third of the company turnover. When asked about the annual number of visitors to the winery, the answers varied widely. Many wineries stated that they received well over 1,000 visitors a year. In recent years, the wineries have experienced an increase in visitor numbers. The closer the winery is to a city, the higher has been the increase in demand.
The winery operators were also asked how much money they had invested in wine tourism over the last ten years and how much they intend to invest over the next three years. Among the wineries that had invested in the last ten years (n=324), the average investment was €194,272. The amount they want to invest over the next three years is €98,698 (n=320). It can therefore be stated that in the past about €20,000 per year has been invested in wine tourism and that about €30,000 per year will be invested over the next three years. Looking at this result in relation to the proximity to big cities, it becomes clear that there were hardly any differences in terms of investment over the last ten years. Looking to the future, however, it becomes clear that those businesses that are a maximum of 15 km from the nearest town intend to invest more than twice as much (around €177,800) than those that are further away from the nearest town (€63,433).
In summary, 13% of all visitors to German wine regions can be described as wine tourists. Of these 7.3m wine tourists, about 90% are Germans, characterised by a higher level of education and income than the remaining visitors. They also spend significantly more money, especially for wine and gastronomic services. The annual turnover of wine tourism in Germany is €5 bn, which corresponds to 19% of all turnover generated in German wine regions. In recent years, winery operators have experienced an increased demand for wine tourism services, especially those located in or not far from large cities. Wine tourism already accounts for 24% of the wineries’ turnover and this share is expected to increase over the following years. Wine tourism is vital for the survival of small businesses and ensures that the families behind the companies have subsistence. The researchers still see wine tourism as the key to sustainable development in German wine regions, as wine tourism can even out structural inequalities between cities and rural areas, while also playing an essential role in preserving cultural heritage, such as the traditional steep slopes.
Covid-19, of course, has had a negative effect on wine tourism in Germany, as elsewhere, particularly during the lockdown between March and May 2020, when wineries could not receive visitors. However, those producers who developed creative ideas like online wine tasting, virtual tours or pick-up service and home delivery of wines were able to compensate somewhat for the income losses. In addition, the long sunny days in September and the fact that many Germans spent their holidays in their own country this year helped the wineries to revive the wine tourism business. Being optimistic, we are sure that the success story of wine tourism will continue worldwide.
Professor Gergely Szolnoki and Maximilian Tafel