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Holiday Review - UK - January 2013

“The domestic segment has previously lacked the innovation, wide product ranges and extensive marketing campaigns seen in the overseas segment. However, recent growth should see the domestic holiday industry emerge from the current weak economic climate a more mature being, better able to compete with the long-haul segment even in a post-recession environment.”

– Harry Segal, Research Analyst

Some questions answered in this report include:

  • Will the impact of unrest in the Middle East and North Africa continue into 2013?
  • Will economic growth in 2013 see a reversal of the trend towards domestic holidays?
  • How can the industry adapt to the rise of smartphone and tablet devices?
  • How do environmental concerns affect holidaymaker decision-making?

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 1: Estimated overseas holiday market volume, 2007-17
              • Figure 2: Estimated domestic holiday market volume, 2007-17
            • Market factors
              • Consumer awareness of ATOL protection set to improve in 2013
                • Holidaymakers fail to take advantage of favourable exchange rates
                  • Figure 3: Average monthly midpoint exchange rates for GBP against key currencies, by % change, 2008-12
                • Tourist expenditure abroad posts signs of recovery
                  • Figure 4: Seasonally adjusted UK tourist expenditure abroad vs. total household final consumption expenditure, 2002-12
                • High aviation fuel prices dampen demand for long-haul holidays
                  • Figure 5: Index of jet fuel prices, USD per gallon, January 2009-November 2012
                • High petrol prices fail to dissuade domestic holidaymakers from driving
                  • Figure 6: Index of UK petrol prices, UK pence per litre, January 2009-November 2012
                • Market share
                  • easyJet and BA consolidate market share at the top of the table
                    • Figure 7: Passengers uplifted, by top ten UK airlines, 2011 and 2012
                  • Passengers licensed by Thomas Cook fell 18% year on year
                    • Figure 8: Passengers licensed under ATOL protection, by top ten ATOL holders, 2011 and 2012
                  • The consumer
                    • A quarter of adults did not go on holiday in 2012
                      • Figure 9: Type of holidays taken in the past 12 months, November 2012
                    • Beach, family and city break holidays continue to dominate
                      • Figure 10: Type of holidays taken in the past five years and last holiday taken, November 2012
                    • Online booking method dominates across every holiday type
                      • Figure 11: Booking method used, November 2012
                    • More than half of consumers view holidays as a necessary spend
                      • Figure 12: Attitudes towards holidays, November 2012
                    • A third of consumers have cut back on the number of holidays they take
                      • Figure 13: Effects of the poor economic climate, November 2012
                    • What we think
                    • Issues in the Market

                        • Will the impact of unrest in the Middle East and North Africa continue into 2013?
                          • Will economic growth in 2013 see a reversal of the trend towards domestic holidays?
                            • How can the industry adapt to the rise of smartphone and tablet devices?
                              • How do environmental concerns affect holidaymaker decision-making?
                              • Trend Application

                                  • Greenfluencers
                                    • Prepare for the Worst
                                    • Market Drivers

                                      • Key points
                                        • Consumer awareness of ATOL protection set to improve in 2013
                                          • Extension of Flight Plus ATOL to cover UK airlines a possibility in 2013
                                            • Holidaymakers fail to take advantage of favourable exchange rates
                                              • Figure 14: Average monthly midpoint exchange rates for GBP against key currencies, by % change, 2008-12
                                            • Tourist expenditure abroad posts signs of recovery
                                              • Figure 15: Seasonally adjusted UK tourist expenditure abroad vs. total household final consumption expenditure, 2002-12
                                            • High aviation fuel prices dampen demand for long-haul holidays
                                              • Figure 16: Index of jet fuel prices, USD per gallon, January 2009-November 2012
                                            • High petrol prices fail to dissuade domestic holidaymakers from driving
                                              • Figure 17: Index of UK petrol prices, UK pence per litre, January 2009-November 2012
                                            • No major operator failures in 2012
                                              • Figure 18: ATOL tour operator failures/closures in the UK, December 2011-November 2012
                                            • Internet dominates as a research source for holiday booking
                                              • Figure 19: Sources used to get information for all holidays and short breaks, 2010 and 2012
                                          • Who's Innovating?

                                            • Key points
                                              • Air New Zealand seeks to cash in on The Hobbit movie release
                                                • TripAdvisor launches partnership with ethical micro-lending website Kiva
                                                  • Virgin Atlantic and British Airways offer mobile boarding passes
                                                    • Princess Cruises unveils new fitness facilities
                                                    • Market Size and Forecast

                                                      • Key points
                                                        • Total holiday market value to increase to £38.2 billion in 2017
                                                          • Figure 20: Estimated total holiday market volume and value, 2007-17
                                                          • Figure 21: Estimated total holiday market value, 2007-17
                                                          • Figure 22: Estimated total holiday market volume, 2007-17
                                                        • Recovery in the overseas market unlikely
                                                          • Figure 23: Estimated overseas holiday market volume and value, 2007-17
                                                          • Figure 24: Estimated overseas holiday market volume, 2007-17
                                                          • Figure 25: Estimated overseas holiday market value, 2007-17
                                                        • Domestic market value growth to outpace volume growth
                                                          • Figure 26: Estimated domestic holiday market volume and value, 2007-17
                                                          • Figure 27: Estimated domestic holiday market volume, 2007-17
                                                          • Figure 28: Estimated domestic holiday market value, 2007-17
                                                        • Forecast methodology
                                                          • Fan chart explanation
                                                          • Segment Performance

                                                            • Key points
                                                              • 2011 upturn in overseas package segment partly nullified in 2012
                                                                • Figure 29: Volume of overseas holidays, by holiday type, 2007-12
                                                                • Figure 30: Volume of overseas holidays, by holiday type, 2007-12
                                                              • Greece replaces Portugal as fourth most popular overseas destination
                                                                • Figure 31: Top 20 overseas holiday destinations, by volume, 2011 and 2012
                                                              • Greece attracts 183,000 extra trips
                                                                • Figure 32: Top ten best-performing overseas holiday destinations, by volume change, 2011 and 2012
                                                              • Holidays to Thailand increase by 18%
                                                                • Figure 33: Top ten best-performing overseas holiday destinations, by volume % change, 2011 and 2012
                                                              • Turkey sees decline of over a third of a million trips
                                                                • Figure 34: Top ten worst-performing overseas holiday destinations, by volume change, 2011 and 2012
                                                              • Egypt suffers a 37% decline in number of trips
                                                                • Figure 35: Top ten worst-performing overseas holiday destinations, by volume % change, 2011 and 2012
                                                              • The Hobbit trilogy to restore tourist interest in New Zealand
                                                                • Domestic holiday expenditure per trip dwarfed by overseas
                                                                  • Figure 36: Average spend per trip, overseas holidays, 2007-12
                                                                  • Figure 37: Average spend per trip, domestic (GB) holidays, 2007-12
                                                                • Sea transport usage falls 12% and Tunnel usage increases 9%
                                                                  • Figure 38: Volume of overseas holidays, by transport used, 2007-12
                                                                  • Figure 39: Volume of overseas holidays, by transport used, 2007-12
                                                                • Organised coach tour domestic holidays increase by 45%
                                                                  • Figure 40: Volume of domestic (GB) holidays, by transport used, 2007-11
                                                              • Market Share

                                                                • Key points
                                                                  • easyJet and BA consolidate market share at the top of the table
                                                                    • Figure 41: Passengers uplifted, by top ten UK airlines, 2011 and 2012
                                                                  • Passengers licensed by Thomas Cook fell 18% year on year
                                                                    • Figure 42: Passengers licensed under ATOL protection, by top ten ATOL holders, 2011 and 2012
                                                                • Holidays Taken in the Past 12 Months

                                                                  • Key points
                                                                    • A quarter of adults did not go on holiday in 2012
                                                                      • Figure 43: Type of holidays taken in the past 12 months, November 2012
                                                                    • Package holidays favoured by younger demographics
                                                                      • Figure 44: Type of holidays taken in the past 12 months, by age, November 2012
                                                                      • Figure 45: Other types of holidays taken in the past 12 months, by age, November 2012
                                                                    • Package holidays to Europe popular across socio-economic groups
                                                                      • Figure 46: Type of holidays taken in the past 12 months, by socio-economic group, November 2012
                                                                      • Figure 47: Other types of holidays taken in the past 12 months, by socio-economic group, November 2012
                                                                  • Holidays Taken in the Past Five Years

                                                                    • Key points
                                                                      • Beach, family and city break holidays continue to dominate
                                                                        • Figure 48: Type of holidays taken in the past five years and last holiday taken, November 2012
                                                                      • City breaks favoured by the middle-aged demographic
                                                                        • Figure 49: Top five types of holidays taken in the past five years, by age, November 2012
                                                                      • Cruise and coach tour holiday taking led by over-65s
                                                                        • Figure 50: Multi-destination, cruise and coach tour holidays taken in the past five years, by age, November 2012
                                                                    • Booking Method Used

                                                                      • Key points
                                                                        • Online booking method dominates across every holiday type
                                                                          • Figure 51: Booking method used, November 2012
                                                                      • Online Booking Methods Used

                                                                        • Key points
                                                                          • Booking using a mobile device remains low
                                                                            • Figure 52: Online booking methods used, November 2012
                                                                          • Online bookers still seek human interaction
                                                                            • Figure 53: Online booking methods used, by type of holidays taken in the past 12 months, November 2012
                                                                        • Attitudes Towards Holidays

                                                                          • Key points
                                                                            • More than half of consumers view holidays as a necessary spend
                                                                              • Figure 54: Attitudes towards holidays, November 2012
                                                                            • Environmental concerns highest among 25-34s
                                                                              • Figure 55: Ethical and environmental attitudes towards holidays, by age, November 2012
                                                                            • Domestic holidays viewed as unattractive by younger consumers
                                                                              • Figure 56: Attitudes towards domestic holidays, by age, November 2012
                                                                          • Effects of the Poor Economic Climate

                                                                            • Key points
                                                                              • A third of consumers have cut back on the number of holidays they take
                                                                                • Figure 57: Effects of the poor economic climate, November 2012
                                                                              • Over-65s largely unaffected by economic climate
                                                                                • Figure 58: Effects of the poor economic climate, by age, November 2012
                                                                            • Planned Holidays in 2013

                                                                              • Key points
                                                                                • A third of consumers are planning a domestic holiday in 2013
                                                                                  • Figure 59: Planned holidays in 2013, November 2012
                                                                                • 2013 domestic market to be driven by older demographics
                                                                                  • Figure 60: Planned holidays in 2013, by age, November 2012
                                                                                • Poor economic climate to fuel domestic sector
                                                                                  • Figure 61: Planned holidays in 2013, by effects of the poor economic climate, November 2012
                                                                                • The domestic holiday market needs to retain its good value image
                                                                                  • Figure 62: Planned holidays in 2013, by selected attitudes towards holidays, November 2012
                                                                              • Targeting Opportunities

                                                                                • Key points
                                                                                  • Target groups
                                                                                    • Figure 63: Holiday target groups, November 2012
                                                                                  • Ethical Abstainers
                                                                                    • Demographic profile
                                                                                      • Marketing message
                                                                                        • Entitled Sun Seekers
                                                                                          • Demographic profile
                                                                                            • Marketing message
                                                                                              • Bargain Hunters
                                                                                                • Demographic profile
                                                                                                  • Marketing message
                                                                                                    • Neutral Observers
                                                                                                      • Demographic profile
                                                                                                      • Appendix – Holidays Taken in the Past 12 Months

                                                                                                          • Figure 64: Most popular type of holidays taken in the past 12 months, by demographics, November 2012
                                                                                                          • Figure 65: Next most popular type of holidays taken in the past 12 months, by demographics, November 2012
                                                                                                      • Appendix – Holidays Taken in the Past 5 Years

                                                                                                          • Figure 66: Most popular type of holidays taken in the past 5 years, by demographics, November 2012
                                                                                                          • Figure 67: Next most popular type of holidays taken in the past 5 years, by demographics, November 2012
                                                                                                          • Figure 68: Other type of holidays taken in the past 5 years, by demographics, November 2012
                                                                                                          • Figure 69: Most popular type of last holidays taken, by demographics, November 2012
                                                                                                          • Figure 70: Next most popular type of last holidays taken, by demographics, November 2012
                                                                                                      • Appendix – Booking Method Used

                                                                                                          • Figure 71: Booking method used for beach holiday, by demographics, November 2012
                                                                                                          • Figure 72: Booking method used for family holiday, by demographics, November 2012
                                                                                                          • Figure 73: Booking method used for city break, by demographics, November 2012
                                                                                                          • Figure 74: Booking method used for break for a wedding/stag or hen do, by demographics, November 2012
                                                                                                          • Figure 75: Booking method used for multi-destination holiday (touring, backpacking etc), by demographics, November 2012
                                                                                                          • Figure 76: Booking method used for all-inclusive holiday, by demographics, November 2012
                                                                                                          • Figure 77: Booking method used for holiday staying in a second home (yours, a friend’s or a relative’s), by demographics, November 2012
                                                                                                          • Figure 78: Booking method used for rural/countryside-based holiday, by demographics, November 2012
                                                                                                          • Figure 79: Booking method used for theme park holiday, by demographics, November 2012
                                                                                                          • Figure 80: Booking method used for cultural/historical sightseeing holiday, by demographics, November 2012
                                                                                                          • Figure 81: Booking method used for camping/caravan park holiday, by demographics, November 2012
                                                                                                      • Appendix – Online Booking Methods Used

                                                                                                          • Figure 82: Other booking methods used, by demographics, November 2012
                                                                                                          • Figure 83: Other booking methods used, by demographics, November 2012
                                                                                                      • Appendix – Attitudes Towards Holidays

                                                                                                          • Figure 84: Agreement with the statements ‘Holidays are a necessary spend’ and ‘Holidays in the UK aren’t real holidays’, by demographics, November 2012
                                                                                                          • Figure 85: Agreement with the statements ‘On holiday I don’t want to think about ethical or environmental issues’ and ‘I feel guilty about the environmental impact of travelling’, by demographics, November 2012
                                                                                                          • Figure 86: Agreement with the statements ‘I prefer overseas holidays to holidays in the UK’ and ‘Holidays are a luxury’, by demographics, November 2012
                                                                                                          • Figure 87: Agreement with the statements ‘Authenticity is important on holiday’ and ‘Going on holiday is my right’, by demographics, November 2012
                                                                                                          • Figure 88: Agreement with the statements ‘Green’ taxes should be levied on travelling’ and ‘UK holidays are better value than overseas holidays’, by demographics, November 2012
                                                                                                          • Figure 89: Agreement with the statements ‘I always spend more money on holiday than I intend to’ and ‘It’s important to get a sunny break every year’, by demographics, November 2012
                                                                                                      • Appendix – Effects of the Poor Economic Climate

                                                                                                          • Figure 90: Most common effects of the poor economic climate, by demographics, November 2012
                                                                                                          • Figure 91: Next most popular effects of the poor economic climate, by demographics, November 2012
                                                                                                          • Figure 92: Other effects of the poor economic climate, by demographics, November 2012
                                                                                                      • Appendix – Planned Holidays in 2013

                                                                                                          • Figure 93: Most popular planned holidays in 2013, by demographics, November 2012
                                                                                                          • Figure 94: Next most popular planned holidays in 2013, by demographics, November 2012
                                                                                                      • Appendix – Targeting Opportunities

                                                                                                          • Figure 95: Target groups, by demographics, November 2012
                                                                                                          • Figure 96: Attitudes towards holidays, by target groups, November 2012
                                                                                                          • Figure 97: Type of holidays taken in the past 12 months, by target groups , November 2012
                                                                                                          • Figure 98: Type of holidays taken in the past 5 years, by target groups , November 2012
                                                                                                          • Figure 99: Effects of the poor economic climate, by target groups , November 2012
                                                                                                          • Figure 100: Planned holidays in 2013, by target groups , November 2012

                                                                                                      Holiday Review - UK - January 2013

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