Global Economics

Where Holiday Spirit Meets Gl?hwein


Germany's Christmas Markets are an enduring tradition that have become a big business as towns and cities compete to outdo each other

Editor's Note: This story was originally published Dec. 22, 2005.

Forget Oktoberfest. German tourism is increasingly driven by an event that dates to the Middle Ages but has boomed in recent years: the Christmas Market. Germany has some 2,500 of them in the weeks leading up to Christmas, ranging from one-day affairs in small towns to multiweek extravaganzas in major cities such as Nuremberg, Cologne, or Dresden.

Fueled by the proliferation in recent decades of traffic-free pedestrian zones in both big and small cities, Christmas Markets have become big business. Collectively they draw 160 million visitors annually and generate about $6 billion in sales. But no corporation owns them. The Christmas Markets are small business writ large.

Days Gone By

They belong to thousands of small operations that erect temporary structures in the village square, serving as a venue for craftspeople to peddle handmade wares such as Christmas ornaments, wooden toys, or woven rugs, and regional specialties as sausage, potato pancakes, or Glühwein—mulled wine. The markets create roughly 200,000 jobs, at least for a few weeks. And they have helped compensate for the sinking popularity of warm-weather Volksfeste, the beer festivals of which Munich's Oktoberfest is the most famous.

The first Christmas Markets were designed to provide villagers with the necessities for Christmas meals as well as a venue for traveling merchants and performers. Those days are long gone. Now city governments, which sponsor most of the markets, compete vigorously to put on the most extravagant festival, booking well-known performers to sing Christmas songs or professional orchestras to blow a fanfare on opening day. And the cuisine isn't necessarily traditional German. How about a Christmas taco?

While the carnival atmosphere sometimes threatens to overwhelm tradition, the Christmas spirit usually prevails.

For a look at a selection of German Christmas markets, check out our slideshow.

Ewing is BusinessWeek's European regional editor.

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