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Holiday Review - UK - March 2015

“Active professionals looking for adventure holidays and city breaks, affluent families seeking to take advantage of likely fare reductions and APD tax rate cuts on long-haul trips, and over-55s buying cruises, upmarket escorted tours and cultural/historical trips are likely be to among the most lucrative travel markets in the next five years.”
– John Worthington, Senior Analyst

This report answers the following key questions

  • What opportunities are there to raise levels of business outside the peak travel months?
  • Which types of product offer the best growth prospects over the next five years?
  • How can travel and tourism brands appeal to today’s value-hunting holidaymaker?

As the axis of travel begins to swing back towards overseas destinations, driven by economic factors, Mintel offers an overview of the current holiday market and prospects for the rest of 2015 and beyond.

This report explores key market drivers, market size, segmentation and forecasts, key trends and product innovation and consumer holiday taking patterns across the overseas and domestic travel sectors.

This report examines the holiday habits and attitudes of British adults. Holidays can take place in the UK or abroad, but must constitute at least one overnight stay.

Economic growth, low inflation, falling oil prices and the growing value of the pound all point towards further revival of holidays abroad, although the overall pace of recovery is expected to be gradual compared to the pre-recessionary boom years given the long-term decline of UK wages. It is likely that more financially secure and affluent consumers will begin to spend more freely on travel, especially ABs and young urban professionals, although there is also the risk that interest rate rises will curb discretionary spending among mortgage payers once they begin to be introduced. The next 12 to 18 months, while oil prices and inflation remain low, may therefore offer a window of opportunity. Affluent over-55s are the highest travel spenders of all, and population trends and pension reforms suggest they will be an increasingly important market over the next few years. A continued uplift of overseas travel is likely to prove a threat for domestic tourism, with the stronger Pound posing a particular problem. 

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Staycation turns to awaycation
                • Figure 1: Forecast total holiday market volume, 2009-19
                • Figure 2: Forecast overseas holiday market volume, 2009-19
                • Figure 3: Forecast domestic holiday market volume, 2009-19
              • Package rebound
                • Market factors
                  • Oil down, pound up
                    • Figure 4: European Brent Crude Oil monthly average spot price (US$ per barrel), January 2014-January 2015
                    • Figure 5: Sterling exchange rate versus selected currencies, percentage change, 2009-15*
                  • Companies, brands and innovation
                    • Healthier holidays
                      • Peer pressure
                        • Ex machina
                          • New app tools
                            • The consumer
                              • Beach and city neck and neck
                                • The holiday year
                                  • Figure 6: Months holidays were taken in the past 12 months, October 2014
                                • Over-55s and 25-34s are biggest spenders
                                  • Figure 7: Amount spent on holidays in the past 12 months, October 2014
                                • Premium opportunities
                                  • Figure 8: Agreement with statements on holiday planning and booking habits, October 2014
                                • What we think
                                • Issues and Insights

                                    • What opportunities are there to raise levels of business outside the peak travel months?
                                      • The facts
                                        • The implications
                                          • Which types of product offer the best growth prospects over the next five years?
                                            • The facts
                                              • The implications
                                                • How can travel and tourism brands appeal to today’s value-hunting holidaymaker?
                                                  • The facts
                                                    • The implications
                                                    • Trend Application

                                                        • Trend: Nouveau Poor
                                                          • Trend: Why Buy
                                                            • Trend: Click and Connect
                                                            • Market Drivers

                                                              • Key points
                                                                • Consumer confidence up as wages begin long road to recovery
                                                                  • Figure 9: GfK Consumer Confidence Index, January 2013 – January 2015
                                                                • Oil prices down (but volatile)
                                                                  • Figure 10: European Brent Crude Oil monthly average spot price (US$ per barrel), January 2014-January 2015
                                                                  • Figure 11: Sterling exchange rate versus selected currencies, annual averages, 2009-14, and spot rate February 2015
                                                                • Pound up but holidaymakers need to gamble
                                                                  • Figure 12: Sterling exchange rate versus selected currencies, percentage change, 2009-15*
                                                                • APD reforms to boost family long haul
                                                                  • Figure 13: Air Passenger Duty (APD) rates April 2012-April 2015
                                                                • But compensation claims could see fare rises
                                                                  • Over-55s travel boom expected
                                                                    • Figure 14: Trends in the age structure of the UK population, by gender, 2009-19
                                                                  • Schools out
                                                                  • Innovation, New Product Development and Trends

                                                                    • Key points
                                                                      • Deals/offers/discounts
                                                                        • Wellness
                                                                          • Gastro-tourism
                                                                            • Active families
                                                                              • Expeditions/authenticity/localism
                                                                                • Peer-to-peer
                                                                                  • Set-jetting
                                                                                    • I, Robot
                                                                                      • De-hassling travel
                                                                                        • Augmenting reality
                                                                                        • Market Size and Forecast

                                                                                          • Key points
                                                                                            • Swing from overseas to UK holidays
                                                                                              • Figure 15: Estimated total holiday market volume and value, 2009-19
                                                                                              • Figure 16: Estimated overseas holiday market volume and value, 2009-19
                                                                                              • Figure 17: Estimated domestic holiday market volume and value, 2009-19
                                                                                            • Forecast
                                                                                                • Figure 18: Forecast total holiday market volume, 2009-19
                                                                                                • Figure 19: Forecast total holiday market value*, 2009-19
                                                                                                • Figure 20: Forecast overseas holiday market volume, 2009-19
                                                                                                • Figure 21: Forecast overseas holiday market value*, 2009-19
                                                                                                • Figure 22: Forecast domestic holiday market volume, 2009-19
                                                                                                • Figure 23: Forecast domestic holiday market value*, 2009-19
                                                                                              • Forecast methodology
                                                                                              • Segment Performance

                                                                                                • Key points
                                                                                                  • Package regains market share
                                                                                                    • Figure 24: Volume of overseas package and independent holidays, 2009-14
                                                                                                  • Pent-up demand for long haul
                                                                                                    • Figure 25: Volume of overseas holidays, long-haul versus short-haul, 2009-14
                                                                                                  • Air travel leads overseas revival
                                                                                                    • Figure 26: Volume of overseas holidays, by transport method, 2009-14
                                                                                                  • Surge in short breaks abroad
                                                                                                    • Figure 27: Volume of overseas holidays, by duration, 2009-14
                                                                                                    • Figure 28: Percentage share of overseas holidays, by duration, 2009-14
                                                                                                  • Mexican wave
                                                                                                    • Figure 29: Top 20 overseas holiday destinations, 2009-14
                                                                                                  • UK short breaks outperforming longer holidays
                                                                                                    • Figure 30: Short versus long holidays in Great Britain, by volume, 2009-14
                                                                                                  • Camping and caravanning struggles
                                                                                                    • Figure 31: Number of domestic holiday trips in Great Britain, by type of accommodation, 2010-14
                                                                                                  • UK rail holidays on track
                                                                                                    • Figure 32: Volume of domestic holidays in Great Britain, by transport used, 2009-13
                                                                                                • Market Share

                                                                                                  • Key points
                                                                                                    • easyJet increases market share
                                                                                                      • Figure 33: Global passengers uplifted, by top 10 UK airlines, 2013 and 2014
                                                                                                    • TUI and Cook show rising numbers
                                                                                                      • Figure 34: Passengers licensed under ATOL protection, by top 10 ATOL holders, 2011-15
                                                                                                  • The Consumer – Holidays Taken in the Last Year

                                                                                                    • Key points
                                                                                                      • Who goes where?
                                                                                                        • Figure 35: Holiday destinations visited in the past 12 months, October 2014
                                                                                                      • UK domestic
                                                                                                        • Figure 36: Domestic holidays taken in the past 12 months, by age group, October 2014
                                                                                                        • Figure 37: Domestic holidays taken in the past 12 months, by socio-economic group, October 2014
                                                                                                        • Figure 38: Domestic holidays taken in the past 12 months, by household income, October 2014
                                                                                                      • Short-haul
                                                                                                        • Figure 39: Short-haul holidays taken in the past 12 months, by age group, October 2014
                                                                                                        • Figure 40: Short-haul holidays taken in the past 12 months, by socio-economic group, October 2014
                                                                                                        • Figure 41: Short-haul holidays taken in the past 12 months, by household income, October 2014
                                                                                                      • Long-haul
                                                                                                        • Figure 42: Long-haul holidays taken in the past 12 months, by household income, October 2014
                                                                                                      • Single and multiple holidaymakers
                                                                                                        • Figure 43: Number of holidays taken per destination in the past 12 months, October 2014
                                                                                                    • The Consumer – Type of Holidays Taken in the Past Year

                                                                                                      • Key points
                                                                                                        • Beach holidays and city breaks equally popular
                                                                                                          • Figure 44: Types of holiday taken in the past 12 months, October 2014
                                                                                                          • Figure 45: Types of holiday taken in the past 12 months, by destinations visited, October 2014
                                                                                                        • Holiday type demographics
                                                                                                        • The Consumer – When People Go on Holiday

                                                                                                          • Key points
                                                                                                            • The annual holiday curve
                                                                                                              • Figure 46: Months holidays were taken in the past 12 months, October 2014
                                                                                                              • Figure 47: Seasons holidays were taken in the past 12 months, October 2014
                                                                                                            • Who goes when?
                                                                                                              • Autumn of life
                                                                                                                • Figure 48: Holidays taken September-November in the past 12 months, by generation, October 2014
                                                                                                                • Figure 49: Holidays taken June-September in the past 12 months, parents versus non-parents, October 2014
                                                                                                              • Seasonal variations by destination
                                                                                                                • Figure 50: Months holidays were taken in the past 12 months, by destination, October 2014
                                                                                                              • Seasonal variations by holiday type
                                                                                                                • Figure 51: Months holidays were taken in the past 12 months, by type of holiday, October 2014
                                                                                                                • Figure 52: Months holidays were taken in the past 12 months, by type of holiday (continued), October 2014
                                                                                                            • The Consumer - How Much People Spend on Holidays

                                                                                                              • Key points
                                                                                                                • Who spends what?
                                                                                                                  • Figure 53: Amount spent on holidays in the past 12 months, October 2014
                                                                                                                  • Figure 54: Amount spent on holidays in the past 12 months, October 2014
                                                                                                                  • Figure 55: Amount spent on holidays in the past 12 months, by demographics, October 2014
                                                                                                                • Cruisers are highest spenders
                                                                                                                  • Figure 56: Amount spent on holidays in the past 12 months, by type of holiday, October 2014
                                                                                                                  • Figure 57: Amount spent on holidays in the past 12 months, by type of holiday (continued), October 2014
                                                                                                                • Shoulder months attract biggest spenders
                                                                                                                  • Figure 58: Months holidays were taken, by amount spent on holidays in the past 12 months, October 2014
                                                                                                              • The Consumer – Holiday Planning Habits

                                                                                                                • Key points
                                                                                                                  • More planning and shopping around
                                                                                                                    • Figure 59: Holiday planning and booking habits, October 2014
                                                                                                                  • Premium potential
                                                                                                                    • Figure 60: Agreement with selected holiday planning and booking habits, by demographics, October 2014
                                                                                                                    • Figure 61: Agreement with selected holiday planning and booking habits, by holiday type, October 2014
                                                                                                                    • Figure 62: Agreement with selected holiday planning and booking habits, by holiday type (continued), October 2014
                                                                                                                  • Higher spenders will pay more for favourite brands
                                                                                                                    • Figure 63: Agreement with selected holiday planning and booking habits, by amount spent on holidays, October 2014
                                                                                                                • The Consumer – Holiday Intentions in 2015

                                                                                                                  • Key points
                                                                                                                    • More of the same?
                                                                                                                      • Figure 64: Holiday taking intentions, October 2014
                                                                                                                    • Under-35s and ABs have highest spending intentions
                                                                                                                      • Figure 65: Holiday spending intentions, October 2014

                                                                                                                  Companies Covered

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                                                                                                                  Holiday Review - UK - March 2015

                                                                                                                  US $2,583.33 (Excl.Tax)