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Holiday Review - UK - January 2017

Published By :

Mintel

Published Date : Feb 2017

Category :

Travel Services

No. of Pages : N/A

It is still unclear how Brexit negotiations will affect the travel market. However, Mintel’s consumer research finds that a sizeable proportion of holidaymakers say they plan to take more trips in 2017 than they did in 2016. While this is positive news, our research also finds that consumers will adopt savvier shopping behaviours, with some opting for cheaper destinations abroad or ones in the UK. While holiday volume may not take too much of a hit, it is likely that expenditure will.

Table of Content

Overview

What you need to know
Scope of the Report

Executive Summary
Slow and steady growth forecast despite economic uncertainty
Figure 1: Forecast of total holiday market volume, 2011-21
Domestic trips reduce in Q1 2016 after a strong 2015
Figure 2: Forecast of domestic holiday market volume, 2011-21
Overseas volume approaching pre-recession levels
Figure 3: Forecast of overseas holiday market volume, 2011-21
The consumer
Proportion of consumers taking holidays drops slightly
Figure 4: Holiday destinations visited in the past 12 months (combined), November 2015 and November 2016
Millennials the driving force behind the rise of city breaks
Figure 5: Type of holiday taken in the last 12 months, November 2016
Generally positive outlook despite doom and gloom surrounding Brexit
Figure 6: Future holiday plans, November 2015 vs November 2016
Consumers will adopt even savvier shopping habits
Figure 7: Holiday attitudes following Brexit, November 2016
What we think

Issues and Insights
Potential for an increase in rural holidays
The facts
The implications
A relatively positive outlook for 2017
The facts
The implications

The Market – What You Need to Know
Slow and steady growth predicted despite economic uncertainty
A slight decline in domestic trips in 2016
Overseas volume approaching pre-recession levels
Top holiday destinations for UK travellers
Pound remains low making overseas trips more expensive

Market Size and Forecast
Slow and steady growth forecast despite the Brexit vote
Figure 8: Estimated total holiday market volume and value, 2011-21
Figure 9: Forecast of total holiday market volume, 2011-21
Figure 10: Forecast of total holiday market value*, 2011-21
Domestic trips reduce in Q1 2016 after a strong 2015
Figure 11: Estimated domestic holiday market volume and value*, 2011-21
Figure 12: Forecast of domestic holiday market volume, 2011-21
Figure 13: Forecast of domestic holiday market value*, 2011-21
Overseas volume approaching pre-recession levels
Figure 14: Overseas holiday market volume and value*, 2011-21
Figure 15: Forecast of overseas holiday market volume, 2011-21
Figure 16: Forecast overseas holiday market value, 2011-21

Market Segmentation
Inbound trip volume increases by 2.1% in 2015
Figure 17: Inbound holiday volume from overseas residents to the UK, 2011-15
Figure 18: Top 10 nations with the most holiday visits to the UK, 2015
The UK becoming more attractive due to the fall in value of the Pound
Figure 19: Inbound holiday volume from overseas residents to the UK, 2015 H1 vs 2016 H1
Will packages become more popular following the Brexit vote?
Figure 20: Volume of overseas package and independent holidays, 2010-16
Short-haul trips make up 82% of the market
Figure 21: Long-haul vs short-haul holidays, by volume, 2010-16
Top holiday destinations for UK travellers
Figure 22: Top 20 holiday destinations for UK residents, 2011-15
Figure 23: Top 20 holiday destinations for UK residents, H1 2015-16
Domestic spend/visits versus overseas spend/visits
Figure 24: Short vs long holidays in Great Britain, by volume, 2011-15
Figure 25: Short vs long holidays in Great Britain, by value, 2011-15
Revival of seaside and countryside in 2015
Figure 26: Holiday volumes in Great Britain, by type of destination*, 2011-15
Figure 27: Domestic holiday volumes in Great Britain, by region visited, 2011-15
Beyond London
Figure 28: Most visited English cities and towns – 2013-15 three-year average for holiday trips by UK residents

Market Drivers
APD cuts long-haul market
Figure 29: Air Passenger Duty (APD) rates, April 2012-April 2017
Pound remains low making overseas trips more expensive
Figure 30: Spot exchange rate, Pound Sterling vs US Dollar and euro, 1 June 2016-19 January 2017
Low oil prices allowing airlines to keep fares low
Figure 31: Europe Brent Spot Price FOB (Dollars per Barrel), January 2014-17
Some long-haul tour operators are now charging more for trips

Companies and Brands – What You Need to Know
Strong growth for airlines brands
Lufthansa offers its premium economy sets via Airbnb
Google launches Destinations for mobile
Hopper predicts fares and notifies travellers of price drops
Live chat with KLM Royal Dutch Airlines via Facebook Messenger

Market Share
Ryanair sees double-digit growth
Figure 32: Top 10 UK-based airlines, by passengers uplifted globally, 2010-15
Leading brands’ increase in passengers licensed under ATOL protection
Figure 33: Passengers licensed under ATOL protection, by top 10 ATOL holders, 2011-17

Launch Activity and Innovation
Lufthansa offers its premium economy sets via Airbnb
Google launches Destinations for mobile
Figure 34: Google Destinations, March 2016
Hopper predicts fares and notifies travellers of price drops
Figure 35: Price-predicting smartphone app Hopper
Live chat with KLM Royal Dutch Airlines via Facebook Messenger
New start-up Overnight allows consumers to book spontaneously
Etihad Airways releases new iPhone app
Real-time onboard seat auctions in the pipeline

The Consumer – What You Need to Know
Some consumers cutting back on holidays
Millennials the driving force behind the rise of city breaks
Big spenders in the 25-34 group
Generally positive outlook despite doom and gloom surrounding Brexit
Consumers will adopt even savvier shopping habits

Holiday Destinations Visited
Some consumers cutting back on holidays
Figure 36: Holiday destinations visited in the past 12 months (combined), November 2015 and November 2016
Who cut back on holidays in 2016?
Figure 37: Holiday destinations visited in the past 12 months (combined), by age, November 2015 and November 2016
Less affluent consumers taking fewer holidays
Figure 38: Holiday destinations visited in the past 12 months (combined), by socio-economic group, November 2015 and November 2016
Younger years marks a time when consumers are serial destination hoppers
Figure 39: Repertoire of holiday destinations visited in the past 12 months, by age, November 2016

Regional Differences in Holiday Taking
Londoners take the most holidays
Figure 40: Holiday destinations visited in the past 12 months (combined), by location, November 2016

Holiday Types Taken
Millennials the driving force behind the rise of city breaks
Figure 41: Type of holiday taken in the last 12 months, November 2016
Technology-free family breaks could prove popular
Winter beach breaks are most popular amongst 16-34s and over-65s
Figure 42: Types of beach holidays taken in the last 12 months, by age, November 2016
16-34s keen on a wide variety of holiday types
Figure 43: Repertoire of holiday types taken in the last 12 months, November 2016
Figure 44: Repertoire of holiday types taken in the last 12 months, by age, November 2016

Holiday Spending
Mean and median holiday spending
Figure 45: Amount spent on most expensive holiday in the last 12 months, November 2016
Affluent 25-34s spend large amounts on holidays
Figure 46: Amount spent on most expensive holiday in the last 12 months, by age, November 2016
Experience and authenticity are important for big spenders
Figure 47: Amount spent on most expensive holiday in the last 12 months, by age, November 2016
Luxury Big-Ticket Holiday Spenders are more cautious about Brexit

Holiday Finances
25-34s most likely to incur some debt to go on holidays
Figure 48: Holiday payment behaviours, November 2016
Younger consumers more likely to save up for holidays
Figure 49: Holiday payment behaviours, by age, November 2016

Future Holiday Plans
Generally positive outlook despite doom and gloom surrounding Brexit
Figure 50: Future holiday plans, November 2015 vs November 2016
A proportion of 25-34s may focus on choosing long holidays over short breaks
Figure 51: Short break plans, by age, November 2015 vs November 2016
Figure 52: Long holiday plans, by age, November 2015 vs November 2016

Interest in Holiday Types
Potential for an increase in rural holidays?
Figure 53: Holiday types interested in taking over the next 12 months, November 2016
East/West Mainlanders, older consumers and the financially burdened are the least likely to holiday

Holidays after the Brexit Vote
Relatively positive outlook following the leave vote
Impact of the EU referendum vote
Figure 54: Detailed post-Brexit scenarios for the holiday market, at current prices, 2016-21
Figure 55: Alternative market scenarios for the post-Brexit holiday market, at current prices, 2016-21
Two thirds say they plan to take a holiday abroad in the next year
Figure 56: Plans to a holiday abroad, November 2016
Consumers will adopt even savvier shopping habits
Figure 57: Holiday attitudes following Brexit, November 2016

CHAID Analysis – Holidays after the Brexit Vote
Methodology
Parents are good targets for planning and budgeting services
Figure 58: Attitudes towards the effect of Brexit on future holidays – CHAID – Tree output, November 2016
Figure 59: Attitudes towards the effect of Brexit on future holidays – CHAID – Table output, November 2016

Appendix – Data Sources, Abbreviations and Supporting Information
Abbreviations
Consumer research methodology
Definitions

Appendix – Market Size and Forecast
Forecast Methodology
Figure 60: Best- and worst-case forecast for total holiday volume, 2016-21
Figure 61: Best- and worst-case forecast for total holiday value, 2016-21
Figure 62: Best- and worst-case forecast for domestic volume, 2016-21
Figure 63: Best- and worst-case forecast for domestic value, 2016-21
Figure 64: Best- and worst-case forecast for overseas volume, 2016-21
Figure 65: Best- and worst-case forecast for overseas value, 2016-21

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