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| MAPS : Holiday Purchasing Patterns: July 2004 |
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This report covers: holiday purchasing patterns, tourism, short breaks, inclusive, or, package, holidays, independent holidays, domestic holiday, sector, outbound holiday, domestic holiday, market, length of stay, expenditure of trip, mode of transport, destination trends, product trends, seasonality, niche products, international tourist arrivals, european operators, european union, exchange rate, travel agents, word of mouth, holidays, holiday brochures, television, internet, TV, advertisements,
EXECUTIVE SUMMARY
| Executive Summary |
| This report reviews the holiday purchasing patterns of UK consumers. It includes short breaks and long holidays both at home and abroad. |
| The international travel and tourism market has been unstable in recent years with a number of unforeseen events having an impact on the market. Some of these have affected the international travel market overall, others have had more impact on the UK outbound market and some have had more affect on the domestic market. Since 1999, major influences on the market have included: |
| the abolition of duty free sales |
| fuel blockades at UK petrol stations |
| the restrictions imposed on the rail network after the Hatfield disaster |
| the events of 11th September 2001 |
| the foot-and-mouth outbreak |
| severe acute respiratory syndrome (SARS) |
| the Iraqi war. |
| Despite the instability caused by these events, the underlying trend in the demand for holidays continues to move ahead of the growth in gross domestic product (GDP) and disposable income. The breaking down of border restrictions, the increasing interest in travel as a leisure activity, the fall in the real cost of travelling and the change in modern lifestyles are all factors that are driving demand ahead of economic activity. This, combined with the growth in the value of sterling, has had a positive effect on outbound holidays, which are growing at a faster rate than domestic holidays. |
| UK consumers expect more choice, variety and individuality and the market panacea of `pile them high, sell them cheap' is no longer a recipe for success for the holiday market in general, and for the outbound holiday market in particular. Although mass-market sun and sea holidays are still the bedrock of the outbound holiday market, it is specialist holidays targeted at particular market segments that are the key to profitability. Many of the major outbound tour operators offer large portfolios providing a range of different product brands targeted at different markets. |
| The driving force behind the underlying growth in the UK holiday market is the increasing level of repeat purchases or multi-holidaymaking in any year. Since 1999, the percentage of UK adults taking an annual holiday has not changed significantly, with the exception of 2003. The growth in |
| multi-holidaymaking has stimulated the market for short holidays in the UK, while long holidays in the UK have remained more or less on a plateau. Outbound holiday growth has been much more dynamic than domestic holiday growth with long and short holidays each showing increases. Much of the growth in short holidays abroad has been stimulated by the establishment and expansion of low-cost airline services. |
| Low-cost airline services are characterised by direct independent booking facilities via the Internet. Their operation has encouraged a growth in the use of the Internet for seeking information on travel and for booking transport and accommodation. The Internet is also an ideal distribution medium for many travel and transport requirements and allows direct bookings to be made to package-holiday operators. |
| Travel agents, in general, appear to be most affected by the fact that more bookings are being made directly over the Internet by the consumer, although there are many travel agents that have capitalised on Web bookings. |
TABLE OF CONTENTS
| Executive Summary 6 |
| 1. Introduction 8 |
| OVERVIEW 8 |
| RESEARCH 8 |
| DEFINITIONS 8 |
| Tourism 8 |
| Forms of Tourism 9 |
| Purpose of Tourism 9 |
| Basic Tourism Units — Visits 9 |
| Short Breaks 10 |
| Inclusive or Package Holidays 10 |
| Independent Holidays 10 |
| 2. Strategic Overview 11 |
| MARKET DYNAMICS AND SEGMENTATION 11 |
| Market Segmentation 11 |
| Current Developments in the UK Holiday Market — Overview 11 |
| Table 1: UK GDP and the UK Holiday Market by Volume |
| and Value (£bn and million trips), 1998-2002 12 |
| Table 2: UK Household Disposable Income at Current Prices |
| (£m), 1998-2002 13 |
| Exchange-Rate Fluctuations 13 |
| Table 3: The Value of Sterling (exchange rate e/£), |
| 1998-2002 14 |
| COMPETITIVE STRUCTURE AND DISTRIBUTION 14 |
| UK Domestic Holiday Sector 14 |
| Table 4: Booking Characteristics for Domestic Short Break Holiday Trips (% of respondents), 2002 15 |
| UK Outbound Holiday Sector 16 |
| The Vertically Integrated Travel Groups 16 |
| Table 5: The `Big Four' Vertically Integrated |
| Tour-Operating Groups, 2003 17 |
| Distribution 18 |
| 3. The Domestic Holiday Market 19 |
| UK DOMESTIC HOLIDAYS 19 |
| Table 6: The UK Domestic Holiday Market by Volume and Value |
| (million trips and £bn), 1999-2003 19 |
| Figure 1: The UK Domestic Holiday Market by Volume and Value (million trips and £bn), 1999-2003 20 |
| Length of Stay 21 |
| Table 7: The UK Domestic Holiday Market by Length of Stay |
| by Volume and Value (million trips, £bn and %), 1999-2003 21 |
| Figure 2: The UK Domestic Holiday Market by Length of Stay |
| by Volume and Value (million trips and £bn), 1999-2003 23 |
| Expenditure per Trip 24 |
| Table 8: The UK Domestic Holiday Market by Average |
| Expenditure per Trip (£), 1999-2003 24 |
| Seasonality 25 |
| Table 9: The UK Domestic Holiday Market by Seasonal |
| Distribution of Trips (%), 1998-2002 25 |
| Mode of Transport 26 |
| Table 10: The UK Domestic Holiday Market by Main Mode |
| of Transport Used (%), 1998, 1999 and 2002 26 |
| Destination Trends 26 |
| Table 11: Domestic Holiday Destinations by English Region |
| (% of total trips, nights and expenditure), 2001 27 |
| Product Trends 27 |
| 4. The Outbound Holiday Market 28 |
| UK OUTBOUND HOLIDAYS 28 |
| Table 12: The UK Outbound Holiday Market by Volume |
| and Value (million trips and £bn), 1999-2003 28 |
| Figure 3: The UK Outbound Holiday Market by Volume |
| and Value (million trips and £bn), 1999-2003 29 |
| Length of Stay 30 |
| Table 13: The UK Outbound Holiday Market by Length of Stay |
| by Volume and Value (million trips, £bn and %), 1999-2003 30 |
| Figure 4: The UK Outbound Holiday Market by Length of Stay |
| by Volume and Value (million trips and £bn), 1999-2003 32 |
| Expenditure per Trip 32 |
| Table 14: The UK Outbound Holiday Market by Average Expenditure Per Trip (£), 1999-2003 33 |
| Seasonality 33 |
| Table 15: The UK Outbound Holiday Market by Seasonal |
| Distribution of Trips (%), 1998-2002 34 |
| Mode of Transport 34 |
| Table 16: The UK Outbound Holiday Market† by Main Mode |
| of Transport Used by Volume (million trips), 1998-2002 35 |
| Destination Trends 35 |
| Table 17: The UK Outbound Holiday Market† by Destination |
| Region by Volume (million trips), 1998-2002 36 |
| Table 18: The UK Outbound Holiday† Market by Destination |
| Country and Holiday Type by Volume (000 trips and %), 2002 38 |
| Product Trends 39 |
| Table 19: The UK Outbound Holiday Market† by Inclusive-Tour |
| Share by Volume (million trips), 1998-2002 39 |
| Table 20: The UK Outbound Holiday Market† by Inclusive-Tour |
| Share by Value (£m), 1998-2002 40 |
| Niche Products 41 |
| Table 21: The UK Ocean Cruise Market by Volume |
| (000 cruise trips), 1998-2002 42 |
| Independent Holidays Abroad 42 |
| 5. International Holiday Purchasing Patterns 43 |
| MARKET DEVELOPMENTS 43 |
| International Tourist Arrivals 43 |
| Table 22: World International Tourist Arrivals by Region |
| (million), 1998-2002 44 |
| European Tourist Arrivals 44 |
| Table 23: European Tourist Arrivals by Region |
| (million), 2000-2002 45 |
| Table 24: Expenditure on International Tourism |
| — Top Ten Countries and Percentage Change |
| ($bn and %), 2002 46 |
| COMPETITOR ENVIRONMENT 46 |
| Activity Holidays 46 |
| European Operators 47 |
| CONSUMER BEHAVIOUR 47 |
| 6. PEST Analysis 48 |
| POLITICAL FACTORS 48 |
| European Union 48 |
| Legislation 48 |
| ECONOMIC FACTORS 49 |
| Exchange Rate 49 |
| Taxation 49 |
| Equity 49 |
| SOCIAL FACTORS 50 |
| Demographic Changes 50 |
| Table 25: Percentage of Households in Great Britain by Size of Household and Number of Households |
| (% and million), 1961, 1971, 1981, 1991 and 2001 51 |
| More Variety 51 |
| Deterrents 51 |
| Sustainable Development 52 |
| Media Coverage 52 |
| TECHNOLOGICAL FACTORS 52 |
| 7. Consumer Dynamics 53 |
| CONSUMER RESEARCH 53 |
| Problems in Interpreting the Results 53 |
| Table 26: Sources of Information and Decision-Making Factors in Holiday Purchase (% of respondents), 2003 54 |
| REPEAT HOLIDAY PURCHASES 54 |
| Table 27: UK Holiday Market — Penetration |
| and Repeat Purchases (% of respondents), 1999-2003 55 |
| Table 28: Profiles of Holidaymakers by Number of Holidays |
| in the Last 12 Months (% of respondents), 2003 56 |
| Domestic Versus Outbound Holidaymakers (S1 and S2) 57 |
| Table 29: UK Holidays Versus Holidays Abroad |
| (% of respondents), 2003 58 |
| Short Breaks Versus Long Holidays (S3 and S4) 60 |
| Table 30: Short Breaks Versus Long Holidays |
| (% of respondents), 2003 61 |
| Holiday Decision Influences 63 |
| Holiday Brochures Versus Television Programmes (S5 and S6) 63 |
| Table 31: Holiday Brochures Versus Television Programmes |
| (% of respondents), 2003 64 |
| Television Advertisements Versus Teletext (S7 and S8) 66 |
| Table 32: Television Advertisements Versus Teletext |
| (% of respondents), 2003 67 |
| Internet Versus Magazine Articles (S9 and S10) 69 |
| Table 33: Holidays on the Internet Versus Magazine Articles |
| (% of respondents), 2003 70 |
| Word of Mouth (S11) 72 |
| Table 34: Holidays Prompted by Word of Mouth |
| (% of respondents), 2003 73 |
| Booking Through Travel Agents or Via the Internet (S12 and S13) 75 |
| Table 35: Holidays Booked Through Travel Agents and |
| Via the Internet (% of respondents), 2003 76 |
| Booking Profile — Influence of the Internet 78 |
| Table 36: UK Holiday Market — Booking Profile |
| (% of respondents), 1999-2003 78 |
| Booked as a Package or Arranged Independently (S14 and S15) 78 |
| Table 37: Package Versus Independent Holidays |
| (% of respondents), 2003 79 |
| Early Versus Late Bookings (S16 and S17) 81 |
| Never Taking Holidays (S18) 81 |
| Table 38: Early Versus Late Booking (% of respondents), 2003 82 |
| Table 39: Those Never Taking Holidays |
| (% of respondents), 2003 84 |
| 8. The Future 86 |
| INTRODUCTION 86 |
| The Political and Regulatory Environment 86 |
| ECONOMIC AND SOCIAL FORECASTS 2004-2007 87 |
| Economic Prospects 87 |
| Table 40: Forecast of UK Gross Domestic Product (%), |
| 2004-2007 87 |
| Socio-Demographic Trends 87 |
| Table 41: The Forecast UK Population by Gender |
| (000), 2004-2007 88 |
| HOLIDAY MARKET FORECASTS 2004-2008 88 |
| Table 42: The Forecast UK Domestic and Outbound Holiday Market by Volume and Value (million trips and £bn), |
| 2004-2008 88 |
| Figure 5: The Forecast UK Total Domestic and Outbound Holiday Market by Volume and Value (million trips and £bn), |
| 2004-2008 90 |
| Table 43: The Forecast UK Outbound Holiday Market |
| by Volume and Value (million trips and £bn), |
| 2004-2008 91 |
| Figure 6: The Forecast UK Outbound Holiday Market |
| by Volume and Value (million trips and £bn), |
| 2004-2008 92 |
| 10. Further Sources 93 |
| Associations 93 |
| General Sources 93 |
| Government and Official Sources 94 |
| Other Sources 94 |
| Bonnier Information Sources 95 |
Text © 2004 Key Note
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Last updated by Amanda Porteous September
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