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MP63100

MAPS ALL INCLUSIVE HOLIDAYS JUNE 2000

Overview

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Editor: Market Assessment
ISBN: 1-86111-304-8

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This report covers: summer camps, spa holidays, treks and adventure holidays, foreign holidays, inclusive package tours, beach and resort, holidays, activity, treks & safaris, cultural & hobby,

Companies covered include: Thomas Cook, Airtours, Thomson Holidays, Club Med, First Choice, Superclubs, Abercrombie & Kent, Page & Moy,

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Table of Contents
Executive Summary
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TABLE OF CONTENTS

1. Executive Summary	9
2. Introduction	11
Market Definition	11
Tourism	11
Holidays	12
Agents and Operators	12
Methodology	13
3. Strategic Overview	14
Background	14
The Economy	14
Demographics	14
Table 1: UK Economy: 1995-99 (£bn)	14
European Factors	15
Table 2: Demographic changes (millions) 1996-2011	15
Figure 1: Annualised Exchange Rates, £: Euro and Major Holiday Currencies 16
Table 3: Annualised Exchange Rates, £: Euro and Major Holiday Currencies16
Table 4: Economic Importance of the Tourism Industry, Major Destinations ($m),1998	17
Figure 2: Economic Importance of the Tourism Industry,Major Destinations 1998	18
Market dynamics and Segmentation	18
Spending on Holidays and Tourism	18
Domestic versus Overseas holidays	19
Table 5: UK Spending Abroad and on Package Foreign Holidays (£m) 1995-99	19
Table 6: Spending per Week per Household on Holidays, by Type, 199920
Table 7: Spend on Holidays per Household per Week, by Age of Head of Household (£), 1999	20
Figure 3: Spend on Holidays per Household per Week, by Age ofHead of Household (£), 1999	21
Table 8: Spend on Holidays by Income Decile per Household per Week (£), 1999	22
Figure 4: Spend on Holidays by Income Decile per Householdper Week (£), 1999	23
Foreign holidays: profile	23
Table 9: All Foreign Holidays: Expenditure, Visits and Nights Spent,by Region 1994-99	24
Table 10: Profile of All Foreign Holidays: Visits,Expenditure and Nights Spent, by Region ( percent), 1994-99	25
Table 11: All Foreign Holidays: Average Spend and Average NightsSpent per Holiday, by Region, 1994-99	26
Inclusive travel packages in relation to all holidays	27
Table 12: Inclusive Package Tours: Profile as percent All Holidays Taken,by Region 1994-99	27
Table 13: Package Tours: Volume of Visits, Expenditure and Total Nights,by Region 1994-999	28
Inclusive tours profile	29
Table 14: Inclusive Tours: Average Spend and Duration, by Region, 1994-9930
Table 15: Profile: Visits, Nights and Spending, by Major Location, 199931
Figure 5: Profile: Visits, Nights and Spending, by Major Location, 199932
Figure 6: Profile: Visits, Nights and Spending, by Major Location, 199933
Table 16: Package Holidays: Profile of Visits, Nights and Spending, by Location, 1999	34
Table 17: Package Holidays: Visits, Nights and Spend as percent of ThoseFor All Holidays, by Location 1999	35
Figure 7: Package Holidays: Visits, Nights and Spend as percent of Those For All Holidays, by Location 1999	37
Season	38
Table 18: Holidays and Expenditure by Quarter, 1999	38
All-Inclusive Holidays Market	39
Table 19: All-Inclusive Holiday Market: Value and Volume, by Region 1994-9940
Distribution	41
The Travel Agency Market	41
Table 20: All-Inclusive Holidays: Value, by Type	41
Figure 8: Employment in Travel Agencies (000), 1994-99	42
Table 21: Employment in Travel Agencies (000), 1994-99	42
Booking Methods	43
Table 22: Major Travel Agencies: Owner and Number ofOutlets, by Brand, 1999	43
Competitive Structure	44
Major players	44
Media	45
Table 23: Profile of Major Operators	45
Distribution	46
Advertising	46
The Consumer	47
Table 24: Advertising Expenditure by Overseas Travel Operators (£000),by Quarter	47
Market Forecasts	48
Table 25: All-Inclusive Holidays: Volume and Value 1999-2004	48
Figure 9: All-Inclusive Holidays: Volume and Value 1999-2004	49
4. Beach and Resort Hotel Holidays	50
Background	50
Market Size	51
Figure 10: Beach and Resort All-Inclusive Holidays, Market Size (£m) 1994-99 52
Consumer Trends	52
Table 26: Beach and Resort All-Inclusive Holidays, Market Size (£m) 1994-9952
Marketing Activity	54
Table 27: All-Inclusive Holidays: Profile of Those Taking in Last 5 Years54
Advertising	55
Table 28: Advertising Spends 1998 and 1999 (£000), Main Tour Operators55
Figure 11: Advertising Spends 1998 and 1999 (£000), Main Tour Operators 56
Distribution	57
5. Activity Holdays	58
Background	58
Market Size	58
Table 29: Activity All-Inclusive Holidays, Market Size (£m), 1994-9958
Figure 12: Activity All-Inclusive Holidays, Market Size (£m), 1994-99 59
Consumer Trends	59
Marketing Activity	60
Table 30: All-Inclusive Activity Holidays: Profile of Those Taking in Last 5 Years60
Advertising	61
Distribution	61
6. Treks and Safari Holidays	62
Background	62
Market Size	62
Figure 13: Treks and Safaris All-Inclusive Holidays, Market Size (£m), 1994-99 63
Consumer Trends	63
Table 31: Treks and Safaris All-Inclusive Holidays, Market Size (£m), 1994-9963
Table 32: All-Inclusive Safari/Wildlife Holidays: Profile of ThoseTaking in Last 5 Years	64
Marketing Activity	65
Advertising	65
Distribution	65
7. Cultural and Hobby Holidays	66
Background	66
Market Size	66
Table 33: Cultural and Hobby All-inclusive Holidays,Market Size (£m), 1994-99	66
Figure 14: Cultural and Hobby All-inclusive Holidays,Market Size (£m), 1994-99	67
Consumer Trends	67
Table 34: All-Inclusive Cultural Holidays: Profile of ThoseTaking in Last 5 Years	68
Marketing Activity	69
Advertising	69
Distribution	69
8. International Perspective	70
Market developments	70
Competitor Environment	70
Airline supply	70
Table 35: Flights And Passengers From UK Airports (000), 1994-9871
Other modes of transport: supply	72
Table 36: All Travel From UK by Mode 1994-98	72
Figure 15: All Travel From UK by Mode (visits 000s) 1994-98	73
Figure 16: All Travel From UK by Mode (value £000)1994-98	73
9. PEST Analysis	74
Political	74
Social	75
Economic	75
Technological	76
10. Consumer Dynamics	77
User profiles	77
Table 37: All Who Have Taken an All-Inclusive Holiday in the Last 5 Years78
Table 38: Type of All-Inclusive Holiday Taken	79
Figure 17: Type of All-Inclusive Holiday Taken	80
Table 39: Attitudes to All-Inclusive Holidays	81
Table 40: Attitudes to All-Inclusive Holidays	82
Table 41: Attitudes to All-Inclusive Holidays	83
Table 42: Attitudes to All-Inclusive Holidays	84
Table 43: Individual Attitude Questions: Only young people go on all-inclusive holidays	85
Table 44: Individual Attitude Questions: I Feel Uncertain About Making My Own Holiday Arrangements	85
Table 45: Individual Attitude Questions: You Get To See More Interesting Places With An All-inclusive Package	86
Table 46: Individual Attitude Questions: You Don’t See as Much of The Country With an All-inclusive Package	87
Table 47: Individual Attitude Questions: You GetProfessional Instructors on All-inclusive Activity Holidays	87
Table 48: Individual Attitude Questions: All-inclusiveHolidays Are Expensive	88
Table 49: Individual Attitude Questions: I Would Use anAll-inclusive Holiday to Go to a New or Exotic Location	88
Table 50: Individual Attitude Questions: All I Want is a Good Hotel With Some Activities Laid on and Good Catering	89
11. Company/Supplier Profiles	90
Thomas Cook	90
Corporate Strategy	90
Advertising	90
Table 51: Advertising Spend (£000), 1998 and 1999	90
Figure 18: Advertising Spend (£000), 1998 and 1999	91
Distribution	91
Profitability	91
Future Company Developments	91
Airtours	91
Corporate Strategy	91
Advertising	92
Table 52: Advertising Spend (£000), 1998 and 1999	92
Figure 19: Advertising Spend (£000), 1998 and 1999	93
Distribution	93
Profitability	93
Table 53: Financial Results (£m), Year to End September 1995-99	93
Figure 20: Financial Results (£m), Year to End September 1995-99 94
Future Company Developments	94
Thomson Holidays	94
Corporate Strategy	94
Advertising	95
Figure 21: Advertising Spend (£000), 1998 and 1999	95
Table 54: Advertising Spend (£000), 1998 and 1999	95
Distribution	96
Profitability	96
Figure 22: Financial Results (£m), 1998 and 1999	96
Table 55: Financial Results (£m), 1998 and 1999	96
Future Company Developments	97
Club Med	97
Corporate Strategy	98
Advertising	98
Table 56: Advertising Spend (£000), 1998 and 1999	98
Figure 23: Advertising Spend, 1998 and 1999	99
Distribution	99
Profitability	99
Future Company Developments	99
First Choice	99
Corporate Strategy	99
Advertising	100
Figure 24: Advertising Spend (£000), 1998 and 1999	100
Table 57: Advertising Spend (£000), 1998 and 1999	100
Distribution	101
Profitability	101
Figure 25: Financial Results (£m), Year to End October 1998 and 1999 101
Table 58: Financial Results (£m), Year to End October 1998 and 1999101
Resort Hotels: Sandals, Superclub	102
Sandals	102
Superclubs	103
Corporate Strategy	104
Advertising	105
Distribution	105
Profitability	105
Abercrombie & Kent	105
Corporate Strategy	106
Advertising	106
Distribution	106
Profitability	106
Figure 26: Financial Results (£m), 1996-98	107
Page & Moy	107
Table 59: Financial Results (£m), 1996-98	107
Corporate Strategy	108
Advertising	108
Figure 27: Advertising Spend (£000), 1998 and 1999	109
Distribution	109
Profitability	109
Table 60: Advertising Spend (£000), 1998 and 1999	109
Figure 28: Financial Results (£m), Year to End October 1997-99	110
Other Suppliers	110
Table 61: Financial Results (£m), Year to End October 1997-99	110
12. The Future	111
Future Travel industry trends	111
Future Product development	111
Summer Camps	111
Spa Holidays	112
Treks and Adventure Holidays	112
Market forecasts	112
Table 62: All-Inclusive Holidays 1999-2004, Volume and Value, 1999-2004113
13. Sources	114
14. Glossary of Terms	116
A-Z of DEFINITIONS	116
Above-the-Line or Main Media Expenditure	116
Annual Growth Rate	116
Below-the-Line Advertising	116
Cif	116
Constant Prices	116
Current Prices	116
Fob	116
Forecasts	117
MSP	117
‘Real’	117
RSP	117
ABOUT THE SOURCES USED	117
ACNielsen MMS	117
Prodcom	117
NOP	118
Trade Association Data	118
Trade Sources	118

EXECUTIVE SUMMARY

All-inclusive holidays have been a strong growth sector within the total holiday market since 1997. They are defined as those holidays where all travel, accommodation and a substantial amount of food and drink, together with activities such as entertainment, trips or sports coaching, are paid for when booking.

All major tour operators now offer this option for both long- and short-haul holiday destinations. The market has developed rapidly away from the Club Med style of a somewhat upmarket and exotic holiday camp towards a broad range of offers for families, couples, and the more adventurous traveller.

The all-inclusive option is accounting for an increasing proportion of beach holidays, up to a third for some major operators, and in some locations, such as the Bahamas, all-inclusive holidays account for up to 80 percent of UK bookings.

The Caribbean has been a focus for all-inclusive developments, driven by the requirements of the US market where resort hotels and theme park holidays are long established and very large markets. However, similar developments are now planned for Indonesia and Malaysia while, in the Southern hemisphere, Sun City in South Africa is only one of the mega-resorts now in operation.

All-inclusive holidays in many ways, parallel the cruise market, which is also showing rapid growth. Although there is an increase in travellers who wish to make their own arrangements and travel independently, an increasing proportion of people are willing to pay for someone else to do all the planning — and worrying — for them.

The increased popularity of long-haul destinations, where only experienced travellers are likely to feel confident in making their own arrangements, adds to this trend, and all-inclusive holidays are still biased towards long-haul locations such as the Caribbean.

New destinations are being opened up all the time. In 2000, Cuba has been launched as a major destination by several operators. In Asia, the island of Borneo is now home to several major resorts and, in Africa, Zanzibar is becoming more widely offered. To date, Vietnam is only offered by mainstream holiday companies as part of a cruise or excursion, but this could well be the next Thailand.

All of these locations are most suited to the all-inclusive option, since local infrastructure and facilities are limited. All-inclusive holidays break down into several sectors, according to their target market. Many of the Caribbean resorts were developed on the principle of adult couples only and do not admit children, although, more recently, some resorts have been developed with a wider target market. They are marketed on the basis of luxury and `hedonism'.

Club Med was the originator of the holiday which appeals to singles, and the beach/sports style of holiday is still the most popular among young people. Club 18-30, which takes this principle further, by age-limiting travellers, does not offer an all-inclusive option, the majority of its holidays being self-catering.

Older travellers are the main customers of all-inclusive tours, such as those with a cultural theme. Long-established operators here are Abercrombie & Kent and Page & Moy, both of whom offer a wide range of holidays based around music, gardens, wildlife or history. These companies also offer `adventure holidays' in locations such as the Amazon or the Himalayas, as well as the well-established African safari holidays.

Despite the pace of growth since 1997, the travel trade does not believe that this will continue indefinitely. Some see the market for all-inclusive holidays levelling off by 2001, and there is certainly a large group of consumers — up to 40 percent — who see them as an expensive option. The development of low cost `no frills' airlines and the option of non-air travel, using the Channel Tunnel, has widened the options for those wanting to travel by themselves.

However, the all-inclusive option retains an aspirational air: around two-thirds of consumers, across age and household types, in a specially commissioned National Opinion Poll (NOP) Solutions survey simply want a holiday with good levels of accommodation and catering, with some activities thrown in, which sounds a lot like the basic all-inclusive holiday.

The further demand for all-inclusive holidays, therefore, looks positive, although there are potential problems in developing the sector further.

All-inclusive sites on the Caribbean model are very large — one is 22 acres — and increasingly expensive to build, as the expected level of facilities increases. Not every potential location will have adequate sites or necessarily wish to permit them. Resorts of this type may not contribute directly to the local economy as they are self-contained, and may not even source supplies or staff locally.

As long-haul holidays increase, a political factor is appearing. In spring 2000, 21 tourists on a diving holiday in Malaysia were held hostage by local insurgents, with a real possibility that they would be killed. Tourists have also been killed on `adventure holidays' in Africa and others have been taken hostage in the Philippines. Tourists are increasingly seen as targets by criminal and insurgent groups in countries where tourism is new.

There is a question mark over the wisdom of placing enclosed, extremely high cost, luxury resorts, which will be used primarily by Americans, Europeans and the Japanese, in countries that are among the poorest in the world, such as Cuba. These resorts are closed to local people and most likely to benefit the owners, who are rarely local companies. The speed at which these developments have been springing up suggests that this aspect has not been fully considered, either by developers or national governments eager for outside investment.

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Last updated by Amanda Porteous April 2003