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Holiday Review - UK - January 2012

“The ‘staycation’ trend has now been firmly in place for three years. And given both the one-off events occurring in 2012 that are likely to reduce holidays abroad and the continuation of a difficult economic environment, the UK break looks likely to maintain market dominance.”

– Tom Rees, Senior Travel and Tourism Analyst

Some questions answered in this report include:

  • What does 2012 mean for holidays – abroad and at home?
  • Will the likely fall in inflation provide a significant boost to holidays?
  • Is the staycation trend here to stay?
  • How can non-air transport modes take advantage of rising fight costs?
  • What do the ‘Arab Spring’ and the eurozone crisis mean for holidaymakers after 2011?

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The Market
              • Figure 1: Volume forecast of all holidays, 2006-16
            • Overseas and domestic holidays
              • Figure 2: Volume forecast of overseas holidays, 2006-16
              • Figure 3: Volume forecast of domestic holidays, 2006-16
            • Market factors
              • One to three trips for most
                • Figure 4: Number of holidays booked (UK and overseas) by holidaymakers in the last 12 months, 2011
              • APD to rise
                • Figure 5: Air Passenger Duty, by band, economy seats, 2011 and 2012
              • Confidence concerns
                • Figure 6: Consumer sentiment for the coming year, October 2011
              • Older onwards
                • Figure 7: Trends in the age structure of the UK population, 2011-16
              • Exchange rate change
                • Figure 8: Sterling exchange rates against selected currencies, annual averages for 2011
              • Companies, brands and innovation
                • Big two continue dominance
                  • Figure 9: Travel companies, by share of passengers licensed to top ten companies*, December 2011
                • Expedia heads online
                  • Figure 10: Top 50 online travel brands, by total unique visitors, November 2011
                • Innovations
                  • The consumer
                    • Holiday taking
                      • Figure 11: Holidays taken in last 12 months, November 2011
                    • Overseas holiday plans
                      • Figure 12: Overseas holiday intentions for next 12 months, November 2011
                    • Attitudes towards holidays
                      • Figure 13: Attitudes towards holidays, November 2011
                    • Reaction to weaker finances
                      • Figure 14: How holiday habits/plans would change if financial situation worsened, November 2011
                    • What we think
                    • Issues in the Market

                        • What does 2012 mean for holidays – abroad and at home?
                          • Will the likely fall in inflation provide a significant boost to holidays?
                            • Is the staycation trend here to stay?
                              • How can non-air transport modes take advantage of rising fight costs?
                                • What do the ‘Arab Spring’ and the eurozone crisis mean for holidaymakers after 2011?
                                • Future Opportunities

                                    • Switch Off
                                      • Let's Make a Deal
                                      • Internal Market Environment

                                        • Key points
                                          • One to three trips most likely
                                            • Figure 15: Number of holidays booked (UK and overseas) by holidaymakers in the last 12 months, 2010 and 2011
                                            • Figure 16: Number of holidays/short breaks taken in the last 12 months, 2010 and 2011
                                          • ‘About one month’ before
                                            • Figure 17: How far ahead bookings for holiday and short breaks were made, 2010 and 2011
                                          • Spend stays similar
                                            • Figure 18: Amount spent on holidays (five or more days) and short breaks (one to four days), 2010 and 2011
                                          • Flight costs on the rise
                                            • Figure 19: Air Passenger Duty, 2011 and 2012
                                            • Figure 20: Oil price per barrel, October 2009-October 2011
                                          • Petrol prices push up UK costs
                                            • Figure 21: Petrol and diesel price per litre, October 2009-October 2011
                                          • Cook survives, but collapses continue
                                              • Figure 22: ATOL tour operator failures/closures in the UK, 2011
                                            • High street contraction
                                              • Legislative reform coming in 2012
                                              • Broader Market Environment

                                                • Key points
                                                  • Consumers not confident
                                                    • Figure 23: Trends in consumer sentiment for the coming year, February 2009-October 2011
                                                    • Figure 24: GfK NOP Consumer Confidence Index, January 2008-December 2011
                                                    • Figure 25: GDP quarterly percentage change, Q1 2006-Q3 2011
                                                  • Older working
                                                    • Figure 26: Trends in the age structure of the UK population, 2006-16
                                                    • Figure 27: Forecast adult population trends, by lifestage, 2006-16
                                                  • Online and on the move
                                                    • Figure 28: Broadband penetration, by demographics, 2006-11
                                                    • Figure 29: Mobile phone features owned and used, 2011
                                                  • Single surge still on
                                                    • Figure 30: UK households, by size, 2006-16
                                                    • Figure 31: Forecast adult population trends, by socio-economic group, 2006-16
                                                  • Euro woes may spell UK opportunity
                                                    • Figure 32: Sterling exchange rates against selected currencies, 2007-12
                                                • Competitive Context

                                                  • Key points
                                                    • Overseas travel remains in the doldrums
                                                      • Figure 33: Overseas travel volumes, by purpose, 2006-11
                                                    • Domestic segment doing well
                                                      • Figure 34: Domestic travel volumes, by purpose, 2006-11
                                                    • Holidays’ priority falls
                                                      • Figure 35: Trends in activities consumers have done and are considering doing, July-October 2011
                                                      • Figure 36: Trends in what extra money is spent on, November 2009-October 2011
                                                  • Who’s Innovating?

                                                    • Key points
                                                      • Accommodation – auctions and gardens
                                                        • Cruise excursions and ‘Real Sunlight’
                                                          • Fair trade first
                                                            • Groupon and Jetsetter lead flash sector
                                                              • More and more apps
                                                                • New in the sky and on the seas
                                                                  • Thomson breaks with tradition
                                                                    • TripAdvisor responds
                                                                      • 20.12%
                                                                      • Market Size and Forecast

                                                                        • Key points
                                                                          • Staycations still here
                                                                            • Figure 37: Domestic and overseas holidays and expenditure, 2006-16
                                                                          • 2011, average spend, and beyond
                                                                              • Figure 38: Average spend per holiday, domestic, overseas and overall, 2006-16
                                                                            • Forecast
                                                                              • Overall
                                                                                • Figure 39: Volume forecast of all holidays, 2006-16
                                                                                • Figure 40: Value forecast of all holidays, 2006-16*
                                                                              • Overseas
                                                                                • Figure 41: Volume forecast of overseas holidays, 2006-16
                                                                                • Figure 42: Value forecast of overseas holidays, 2006-16*
                                                                              • Domestic
                                                                                • Figure 43: Volume forecast of domestic holidays, 2006-16
                                                                                • Figure 44: Value forecast of domestic holidays, 2006-16
                                                                              • Forecast methodology
                                                                              • Segment Performance

                                                                                • Key points
                                                                                  • Six in ten are independent
                                                                                    • Figure 45: Inclusive holidays versus independent holidays abroad, by volume, 2006-11
                                                                                  • Air up through absence of ash
                                                                                    • Figure 46: Total overseas holidays, by mode of transport, 2006-11
                                                                                    • Figure 47: Price and journey time comparison of air vs rail vs tunnel/car travel, travelling February 2012
                                                                                  • Car use stays top in UK
                                                                                    • Figure 48: Main mode of transport used, domestic holidays*, 2006-10
                                                                                  • Unrest rebalances overseas holiday choices
                                                                                    • Figure 49: Outbound holiday visits, by region visited, 2006-11
                                                                                    • Figure 50: Top 25 outbound destinations, by number of visits (all purposes), 2008-H1 2011
                                                                                  • The long and the short of it
                                                                                    • Figure 51: Overseas short break vs longer holidays, by volume, 2006-10
                                                                                    • Figure 52: Domestic short break vs longer holidays, by volume, 2006-10
                                                                                • Market Share

                                                                                  • Key points
                                                                                    • Expedia takes top spot online
                                                                                      • Figure 53: Top 50 online travel brands, by total unique visitors, November 2009-November 2011
                                                                                    • ‘Big Two’ continue to dominate
                                                                                      • Figure 54: Overseas passengers licensed to UK travel companies, December 2011
                                                                                  • Companies and Products

                                                                                      • easyJet
                                                                                        • Figure 55: easyJet Plc key financials, H1 2010 and H1 2011
                                                                                      • Eurostar/Eurotunnel
                                                                                          • Figure 56: Eurostar International Ltd, key financials, H1 2010 and H1 2011
                                                                                          • Figure 57: Eurostar International Ltd, key financials, 2009 and 2010
                                                                                        • Expedia
                                                                                            • Figure 58: Expedia.com Ltd, key financials, 2009 and 2010
                                                                                          • InterContinental Hotel Group
                                                                                              • Figure 59: InterContinental Hotel Group, EMEA segment key financials, H1 2010 and H1 2011
                                                                                              • Figure 60: InterContinental Hotel Group, EMEA segment key financials, 2009 and 2010
                                                                                            • International Airlines Group
                                                                                                • Figure 61: British Airways, key financials, 2009 and 2010
                                                                                              • P&O Ferries
                                                                                                • Figure 62: P&O Ferries Division Holdings Ltd, key financials, 2009 and 2010
                                                                                              • Ryanair
                                                                                                  • Figure 63: Ryanair Holdings Plc, key financials, H1 2010 and H1 2011
                                                                                                  • Figure 64: Ryanair Holdings Plc, key financials, 2010 and 2011
                                                                                                • Thomas Cook
                                                                                                    • Figure 65: Thomas Cook Group Plc – UK segment, key financials, H1 2010 and H1 2011
                                                                                                  • TripAdvisor
                                                                                                      • Figure 66: TripAdvisor Ltd, key financials, 2009 and 2010
                                                                                                    • TUI Travel
                                                                                                        • Figure 67: TUI Travel Plc UK and Ireland, key financials, H1 2010 and H1 2011
                                                                                                    • Channels to Market

                                                                                                      • Key points
                                                                                                        • Online for info
                                                                                                          • Figure 68: Sources used to get information for all holidays and short breaks, 2010 and 2011
                                                                                                        • DIY dominates
                                                                                                          • Figure 69: How holidays were booked, 2010 and 2011
                                                                                                      • Holiday Taking

                                                                                                        • Key points
                                                                                                          • Non-holidaymaker rise
                                                                                                            • Figure 70: Holidays taken in last 12 months, 2010 and 2011
                                                                                                          • Have money, have holidays
                                                                                                            • Away and UK
                                                                                                              • Not going away
                                                                                                              • Number of Holidays

                                                                                                                • Key points
                                                                                                                  • Frequency falls
                                                                                                                    • Figure 71: Number of holidays taken in past 12 months, 2010 and 2011
                                                                                                                  • Domestic determinants
                                                                                                                    • Europe earners
                                                                                                                      • Independents most likely to look beyond Europe
                                                                                                                        • Figure 72: Number of holidays taken in past 12 months, by most popular holidays taken in last 12 months, November 2011
                                                                                                                        • Figure 73: Number of holidays taken in past 12 months, by next most popular holidays taken in last 12 months, November 2011
                                                                                                                        • Figure 74: Number of holidays taken in past 12 months, by other holidays taken in last 12 months, November 2011
                                                                                                                    • Spend on Holidays

                                                                                                                      • Key points
                                                                                                                        • Watching the pennies
                                                                                                                          • Figure 75: Domestic and overseas holiday spending in the last 12 months, 2010 and 2011
                                                                                                                        • Who spends what, where?
                                                                                                                          • Budget Britain
                                                                                                                            • Figure 76: Domestic holiday spending, by number of domestic holidays taken, November 2011
                                                                                                                          • Outside Europe expense
                                                                                                                            • Figure 77: Overseas holiday spending, by number of overseas holidays taken, November 2011
                                                                                                                        • Holidays Abroad

                                                                                                                          • Key points
                                                                                                                            • Beach is best
                                                                                                                              • Figure 78: Type of overseas holiday taken in last 12 months, 2010 and 2011
                                                                                                                            • Family affairs
                                                                                                                              • Who takes what?
                                                                                                                                • Type and times
                                                                                                                                  • Figure 79: Type of overseas holiday taken, by number of overseas holidays taken, November 2011
                                                                                                                              • Overseas Holiday Plans

                                                                                                                                • Key points
                                                                                                                                  • Plans stay in place
                                                                                                                                    • Figure 80: Overseas holiday intentions for next 12 months, 2010 and 2011
                                                                                                                                  • Forward planning
                                                                                                                                    • The no-goers
                                                                                                                                      • Plans vs spending
                                                                                                                                        • Figure 81: Overseas holiday intentions for next 12 months, by expenditure on overseas holidays in last 12 months, November 2011
                                                                                                                                      • Repeat business
                                                                                                                                        • Figure 82: Overseas holiday intentions for next 12 months, by most popular type of holiday taken in last 12 months, November 2011
                                                                                                                                        • Figure 83: Overseas holiday intentions for next 12 months, by next most popular type of holiday taken in last 12 months, November 2011
                                                                                                                                    • What People Think of Holidays

                                                                                                                                      • Key points
                                                                                                                                        • Four in ten call holidays a luxury
                                                                                                                                          • Figure 84: Attitudes towards holidays, 2010 and 2011
                                                                                                                                        • Wealthiest see holidays as necessary
                                                                                                                                          • Staycations and Olympic impact
                                                                                                                                            • Planes, trains and automobiles
                                                                                                                                              • What do the planners think?
                                                                                                                                                • Figure 85: Attitudes towards holidays, by most popular overseas holiday intentions for next 12 months, November 2011
                                                                                                                                                • Figure 86: Attitudes towards holidays, by next most popular overseas holiday intentions for next 12 months, November 2011
                                                                                                                                                • Figure 87: Attitudes towards holidays, by other overseas holiday intentions for next 12 months, November 2011
                                                                                                                                            • What People Would Do If Their Financial Situation Worsened

                                                                                                                                              • Key points
                                                                                                                                                • Less go
                                                                                                                                                  • Figure 88: How holiday habits/plans would change if financial situation worsened, 2010 and 2011
                                                                                                                                                • Fewer holidays, dropping breaks
                                                                                                                                                  • Deal seeking
                                                                                                                                                    • Staycation/closer overseas switching
                                                                                                                                                      • What people think, what they would do
                                                                                                                                                        • Figure 89: How holiday habits/plans would change if financial situation worsened, by most popular attitudes towards holidays, November 2011
                                                                                                                                                        • Figure 90: How holiday habits/plans would change if financial situation worsened, by next most popular attitudes towards holidays, November 2011
                                                                                                                                                        • Figure 91: How holiday habits/plans would change if financial situation worsened, by other attitudes towards holidays, November 2011
                                                                                                                                                    • Appendix – Market Size and Forecast

                                                                                                                                                      • Overall
                                                                                                                                                        • Figure 92: Volume forecast of all holidays, best- and worst-case scenarios, 2011-16
                                                                                                                                                        • Figure 93: Value forecast of all holidays, best- and worst-case scenarios, 2011-16*
                                                                                                                                                      • Overseas
                                                                                                                                                        • Figure 94: Volume forecast of overseas holidays, best- and worst-case scenarios, 2011-16
                                                                                                                                                        • Figure 95: Value forecast of overseas holidays, best- and worst-case scenarios, 2011-16*
                                                                                                                                                      • Domestic
                                                                                                                                                        • Figure 96: Volume forecast of domestic holidays, best- and worst-case scenarios, 2011-16
                                                                                                                                                        • Figure 97: Value forecast of domestic holidays, best- and worst-case scenarios, 2011-16
                                                                                                                                                    • Appendix – Holiday Taking

                                                                                                                                                        • Figure 98: Most popular holidays taken in last 12 months, by demographics, November 2011
                                                                                                                                                        • Figure 99: Next most popular holidays taken in last 12 months, by demographics, November 2011
                                                                                                                                                        • Figure 100: Other holidays taken in last 12 months, by demographics, November 2011
                                                                                                                                                    • Appendix – Number of Holidays

                                                                                                                                                        • Figure 101: Number of holidays taken in past 12 months, by demographics, November 2011
                                                                                                                                                    • Appendix – Spend on Holidays

                                                                                                                                                        • Figure 102: Domestic holiday spending in the last 12 months, by demographics, November 2011
                                                                                                                                                        • Figure 103: Most popular overseas holiday spending in the last 12 months, by demographics, November 2011
                                                                                                                                                        • Figure 104: Next most popular overseas holiday spending in the last 12 months, by demographics, November 2011
                                                                                                                                                    • Appendix – Holidays Abroad

                                                                                                                                                        • Figure 105: Type of overseas holiday taken in last 12 months, by most popular holidays taken in last 12 months, November 2011
                                                                                                                                                        • Figure 106: Type of overseas holiday taken in last 12 months, by next most popular holidays taken in last 12 months, November 2011
                                                                                                                                                        • Figure 107: Type of overseas holiday taken in last 12 months, by other holidays taken in last 12 months, November 2011
                                                                                                                                                        • Figure 108: Type of overseas holiday taken in last 12 months, by most popular number of holidays taken in past 12 months, November 2011
                                                                                                                                                        • Figure 109: Type of overseas holiday taken in last 12 months, by next most popular number of holidays taken in past 12 months, November 2011
                                                                                                                                                        • Figure 110: Type of overseas holiday taken in last 12 months, by overseas holiday spending in the last 12 months, November 2011
                                                                                                                                                        • Figure 111: Most popular type of overseas holiday taken in last 12 months, by demographics, November 2011
                                                                                                                                                        • Figure 112: Next most popular type of overseas holiday taken in last 12 months, by demographics, November 2011
                                                                                                                                                    • Appendix – Overseas Holiday Plans

                                                                                                                                                        • Figure 113: Overseas holiday intentions for next 12 months, by most popular holidays taken in last 12 months, November 2011
                                                                                                                                                        • Figure 114: Overseas holiday intentions for next 12 months, by next most popular holidays taken in last 12 months, November 2011
                                                                                                                                                        • Figure 115: Overseas holiday intentions for next 12 months, by other holidays taken in last 12 months, November 2011
                                                                                                                                                        • Figure 116: Overseas holiday intentions for next 12 months, by least popular holidays taken in last 12 months, November 2011
                                                                                                                                                        • Figure 117: Overseas holiday intentions for next 12 months, by most popular number of holidays taken in past 12 months, November 2011
                                                                                                                                                        • Figure 118: Overseas holiday intentions for next 12 months, by next most popular number of holidays taken in past 12 months, November 2011
                                                                                                                                                        • Figure 119: Most popular overseas holiday intentions for next 12 months, by demographics, November 2011
                                                                                                                                                        • Figure 120: Next most popular overseas holiday intentions for next 12 months, by demographics, November 2011
                                                                                                                                                        • Figure 121: Other overseas holiday intentions for next 12 months, by demographics, November 2011
                                                                                                                                                    • Appendix – What People Think of Holidays

                                                                                                                                                        • Figure 122: Attitudes towards holidays, by domestic holiday spending in the last 12 months, November 2011
                                                                                                                                                        • Figure 123: Attitudes towards holidays, by overseas holiday spending in the last 12 months, November 2011
                                                                                                                                                        • Figure 124: Attitudes towards holidays, by most popular holidays taken in last 12 months, November 2011
                                                                                                                                                        • Figure 125: Attitudes towards holidays, by next most popular holidays taken in last 12 months, November 2011
                                                                                                                                                        • Figure 126: Attitudes towards holidays, by other holidays taken in last 12 months, November 2011
                                                                                                                                                        • Figure 127: Attitudes towards holidays, by least popular holidays taken in last 12 months, November 2011
                                                                                                                                                        • Figure 128: Attitudes towards holidays, by most popular number of holidays taken in past 12 months, November 2011
                                                                                                                                                        • Figure 129: Attitudes towards holidays, by next most popular number of holidays taken in past 12 months, November 2011
                                                                                                                                                        • Figure 130: Attitudes towards holidays, by most popular type of overseas holiday taken in last 12 months, November 2011
                                                                                                                                                        • Figure 131: Attitudes towards holidays, by next most popular type of overseas holiday taken in last 12 months, November 2011
                                                                                                                                                        • Figure 132: Most popular attitudes towards holidays, by demographics, November 2011
                                                                                                                                                        • Figure 133: Next most popular attitudes towards holidays, by demographics, November 2011
                                                                                                                                                        • Figure 134: Other attitudes towards holidays, by demographics, November 2011
                                                                                                                                                    • Appendix – What People Would Do If Their Financial Situation Worsened

                                                                                                                                                        • Figure 135: How holiday habits/plans would change if financial situation worsened, by most popular holidays taken in last 12 months, November 2011
                                                                                                                                                        • Figure 136: How holiday habits/plans would change if financial situation worsened, by next most popular holidays taken in last 12 months, November 2011
                                                                                                                                                        • Figure 137: How holiday habits/plans would change if financial situation worsened, by other holidays taken in last 12 months, November 2011
                                                                                                                                                        • Figure 138: How holiday habits/plans would change if financial situation worsened, by least popular holidays taken in last 12 months, November 2011
                                                                                                                                                        • Figure 139: How holiday habits/plans would change if financial situation worsened, by domestic holiday spending in the last 12 months, November 2011
                                                                                                                                                        • Figure 140: How holiday habits/plans would change if financial situation worsened, by overseas holiday spending in the last 12 months, November 2011
                                                                                                                                                        • Figure 141: How holiday habits/plans would change if financial situation worsened, by most popular number of holidays taken in past 12 months, November 2011
                                                                                                                                                        • Figure 142: How holiday habits/plans would change if financial situation worsened, by next most popular number of holidays taken in past 12 months, November 2011
                                                                                                                                                        • Figure 143: How holiday habits/plans would change if financial situation worsened, by most popular type of overseas holiday taken in last 12 months, November 2011
                                                                                                                                                        • Figure 144: How holiday habits/plans would change if financial situation worsened, by next most popular type of overseas holiday taken in last 12 months, November 2011
                                                                                                                                                        • Figure 145: How holiday habits/plans would change if financial situation worsened, by most popular overseas holiday intentions for next 12 months, November 2011
                                                                                                                                                        • Figure 146: How holiday habits/plans would change if financial situation worsened, by next most popular overseas holiday intentions for next 12 months, November 2011
                                                                                                                                                        • Figure 147: How holiday habits/plans would change if financial situation worsened, by other overseas holiday intentions for next 12 months, November 2011
                                                                                                                                                        • Figure 148: How holiday habits/plans would change if financial situation worsened, by least popular overseas holiday intentions for next 12 months, November 2011
                                                                                                                                                        • Figure 149: Most popular how holiday habits/plans would change if financial situation worsened, by demographics, November 2011
                                                                                                                                                        • Figure 150: Next most popular how holiday habits/plans would change if financial situation worsened, by demographics, November 2011
                                                                                                                                                        • Figure 151: Other how holiday habits/plans would change if financial situation worsened, by demographics, November 2011

                                                                                                                                                    Companies Covered

                                                                                                                                                    • Airtours Holidays
                                                                                                                                                    • AMR Corporation (American Airlines)
                                                                                                                                                    • Arsenal Football Club
                                                                                                                                                    • British Airways Plc
                                                                                                                                                    • Co-operative Group
                                                                                                                                                    • Competition Commission
                                                                                                                                                    • Deutsche Bahn
                                                                                                                                                    • Eurostar UK Ltd
                                                                                                                                                    • Expedia Inc.
                                                                                                                                                    • First Choice Holidays & Flights Ltd
                                                                                                                                                    • Groupon, Inc.
                                                                                                                                                    • Hayes & Jarvis (Travel) Ltd
                                                                                                                                                    • Hotwire
                                                                                                                                                    • Iberia, Líneas Aéreas de España SA
                                                                                                                                                    • InterContinental Hotels Group PLC
                                                                                                                                                    • MyTravel Group plc
                                                                                                                                                    • P&O Ferries
                                                                                                                                                    • Ryanair Holdings plc
                                                                                                                                                    • Teletext Holidays
                                                                                                                                                    • Thomas Cook Airlines
                                                                                                                                                    • Thomas Cook Group PLC
                                                                                                                                                    • Thomson Holidays
                                                                                                                                                    • Travel Republic
                                                                                                                                                    • TripAdvisor LLC
                                                                                                                                                    • TUI Travel PLC

                                                                                                                                                    Holiday Review - UK - January 2012

                                                                                                                                                    £1,750.00 (Excl.Tax)