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Holiday Review - UK - January 2017

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

This Report discusses the following key topics:

  • Potential for an increase in rural holidays
  • A relatively positive outlook for 2017

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Table of contents

  1. Overview

    • What you need to know
      • Scope of the Report
      • Executive Summary

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

              • Potential for an increase in rural holidays
                • The facts
                  • The implications
                    • A relatively positive outlook for 2017
                      • The facts
                        • The implications
                        • The Market – What You Need to Know

                          • Slow and steady growth predicted despite economic uncertainty
                            • A slight decline in domestic trips in 2016
                              • Overseas volume approaching pre-recession levels
                                • Top holiday destinations for UK travellers
                                  • Pound remains low making overseas trips more expensive
                                  • Market Size and Forecast

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

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

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

                                          • Strong growth for airlines brands
                                            • Lufthansa offers its premium economy sets via Airbnb
                                              • Google launches Destinations for mobile
                                                • Hopper predicts fares and notifies travellers of price drops
                                                  • Live chat with KLM Royal Dutch Airlines via Facebook Messenger
                                                  • Market Share

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

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

                                                                  • Some consumers cutting back on holidays
                                                                    • Millennials the driving force behind the rise of city breaks
                                                                      • Big spenders in the 25-34 group
                                                                        • Generally positive outlook despite doom and gloom surrounding Brexit
                                                                          • Consumers will adopt even savvier shopping habits
                                                                          • Holiday Destinations Visited

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

                                                                              • Londoners take the most holidays
                                                                                  • Figure 40: Holiday destinations visited in the past 12 months (combined), by location, November 2016
                                                                              • Holiday Types Taken

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

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

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

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

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

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

                                                                                                        • Methodology
                                                                                                          • Parents are good targets for planning and budgeting services
                                                                                                              • Figure 58: Attitudes towards the effect of Brexit on future holidays – CHAID – Tree output, November 2016
                                                                                                              • Figure 59: Attitudes towards the effect of Brexit on future holidays – CHAID – Table output, November 2016
                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                              • Abbreviations
                                                                                                                • Consumer research methodology
                                                                                                                  • Definitions
                                                                                                                  • Appendix – Market Size and Forecast

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

                                                                                                                    Companies Covered

                                                                                                                    To learn more about the companies covered in this report please contact us.

                                                                                                                    Holiday Review - UK - January 2017

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