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Inbound Tourism - UK - November 2013

“Making tourists aware of lower food, drink and accommodation costs offered by many regional destinations in comparison to London would go some way to negating the high costs of domestic travel, and European tourists could also enjoy the lower take-off and landing fees offered by regional airports compared to Heathrow and Gatwick.”

– Harry Segal, Research Analyst

Some questions answered in this report include:

  • How have the Olympics and the royal birth affected the inbound market?
  • How have APD and high aviation fuel costs impacted inbound tourism?
  • What impact are UK visa rules having on tourism from China?
  • What are the growth opportunities in promoting regional tourism?

Mintel expects contraction in the number of holidays taken by overseas residents to the UK to continue in 2013, as the number of visits is set to fall by a further 0.1%. Stagnation in 2013 will be caused by a significant decline in holidays to the UK from the key source markets of Spain, Italy and Ireland, as each of these countries continues to struggle with the fallout from the global recession.

This report examines leisure holidays taken to the UK by overseas residents and forecasts how the market will perform over the next five years. It explores the challenges and opportunities that operators will face in the future and investigates the core drivers behind changes in the market. Key innovations in the market are also explored.

The report also examines consumer attitudes towards visiting the UK and incorporates the findings of consumer surveys carried out in the US, China, France, Germany, Italy and Spain. This subject was last explored in Mintel’s Inbound Tourism, UK – November 2012 report.

This report examines holidays taken to the UK by overseas residents. The report focuses on leisure holidays, as opposed to business trips or visiting friends and relatives. A holiday must include at least one night’s stay in paid accommodation.

Mintel carried out online research in the US, France, Germany, Italy and China. A sample of internet users aged 18+ were questioned in the US, France, Germany, Italy and Spain, and a sample of internet users aged 20-49 were questioned in China.

The standard travel and tourism definitions used in the terminology of this report are as follows:

Tourism is any travel which involves at least one overnight stay away from home.

A holiday is a subjectively defined form of tourism, as defined by the tourist in response to surveys such as the IPS. A holiday can be distinguished from other leisure travel such as visits to friends and relatives (VFR) or shopping trips.

Short-haul refers destinations within Europe. The following destinations are considered to be short-haul: Austria, Belgium, Bulgaria, Croatia, Cyprus EU, Cyprus Non-EU, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Iceland, Irish Republic, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Russia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey and Other Europe.

Long-haul refers to destinations outside of Europe.

The Canaries are included as a part of the Spanish market, and Madeira and the Azores are included as part of the Portuguese market.

A package holiday is defined as the simultaneous sale of at least two elements of a holiday to the traveller: fares on public transport (eg flights) and commercial accommodation (eg hotel or self-catering apartment). Other elements, such as meals or excursions, are not essential to the definition of an inclusive tour. The term ‘all-inclusive’ is used to describe a special type of resort holiday in which food, drink, excursions and other services are provided as part of the total holiday cost.

An independent holiday is one in which the traveller organises and books transport and accommodation from separate sources (eg a Channel ferry crossing and a caravan site in France).

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Olympic year saw first inbound decline in a decade
                • Figure 1: Estimated UK inbound tourism market volume, 2008-18
              • Tourist expenditure in the UK has increased over 50% since 2008
                • Figure 2: Estimated UK inbound tourism market value, 2008-18
              • Market factors
                • Tourists have enjoyed a currency advantage, but the Pound is rallying
                  • Economic growth in key source markets set to stabilise
                    • Competition in the low-cost airline market is heating up
                      • Low-cost transatlantic flights will prove a boon to tourism from the US
                        • VisitBritain and London & Partners at odds over regional tourism drive
                          • UK government under pressure to relax visa process for Chinese tourists
                            • Segment Performance
                              • France dominates with a 14% market share by volume…
                                • Figure 3: Top 10 UK inbound tourism source markets, by volume, year ended 30 June 2013
                              • …but the USA is the most valuable source market
                                • Figure 4: Top 10 UK inbound tourism source markets, by expenditure in the UK, year ended 30 June 2013
                              • Tourists from the Middle East boast the highest average spend per trip
                                • Tourism from Spain has crashed as its economy continues to suffer
                                  • The consumer
                                    • Consumer demand suggests the market has significant room to grow
                                      • Figure 5: Holidays taken to the UK, by country, October 2013
                                    • UK heritage is the primary attraction for Europeans and Americans
                                      • Figure 6: UK attractions, by country, October 2013
                                    • High travel costs dampen demand from both Europe and the US
                                      • Figure 7: Reasons for not wanting to visit the UK, by country, October 2013
                                    • English language is a key driver behind tourism from Europe and the US
                                      • Figure 8: Attitudes towards visiting the UK, by country, October 2013
                                    • UK is China’s second favourite European destination, behind France
                                      • Figure 9: China outbound tourism to Europe, September 2013
                                    • Schengen visa gives member states a distinct advantage
                                      • Figure 10: China attitudes towards travelling to Europe, September 2013
                                    • What we think
                                    • Issues in the Market

                                        • How have the Olympics and the royal birth affected the inbound market?
                                          • How have APD and high aviation fuel costs impacted inbound tourism?
                                            • What impact are UK visa rules having on tourism from China?
                                              • What are the growth opportunities in promoting regional tourism?
                                              • Trend Application

                                                  • Mintel Inspire: Secret, Secret
                                                    • Mintel Inspire: The Real Thing
                                                      • Mintel Futures: East Meets West
                                                      • Market Drivers

                                                        • Key points
                                                          • Tourists have enjoyed a currency advantage, but the Pound is rallying
                                                            • Figure 11: GBP exchange rate against key source market currencies, % change, January 2008-September 2013
                                                          • Economic growth in key source markets set to stabilise
                                                            • Figure 12: Forecast GDP % change for key source markets, 2008-18
                                                          • Edinburgh and Belfast offer considerable savings compared to London
                                                            • Figure 13: Post Office City Costs Barometer, 2013
                                                          • Competition in the low-cost airline market is heating up
                                                            • Low-cost transatlantic flights will boost tourism from the US
                                                              • VisitBritain and London & Partners at odds over regional tourism drive
                                                                • UK government under pressure to relax visa process for Chinese tourists
                                                                • Who's Innovating?

                                                                  • Key points
                                                                    • Virgin Atlantic offers Australian tourists a bonus trip to Edinburgh
                                                                      • VisitBritain strikes a three-year deal with China UnionPay International
                                                                        • London & Partners launches month of deals to celebrate Olivier Awards
                                                                          • Dot London domain launch set to build the London brand
                                                                          • Market Size and Forecast

                                                                            • Key points
                                                                              • The Olympic year saw the first decline in inbound visits in a decade
                                                                                • Figure 14: Estimated UK inbound tourism market volume and value, 2008-18
                                                                              • Tourist expenditure in the UK has increased over 50% since 2008
                                                                                • Holiday trips to the UK are set to increase a further 8% by 2018
                                                                                  • Figure 15: Estimated UK inbound tourism market volume, 2008-18
                                                                                • Tourist expenditure in the UK is expected to exceed £10 billion by 2018
                                                                                  • Figure 16: Estimated UK inbound tourism market value, 2008-18
                                                                                • Forecast methodology
                                                                                • Segment Performance

                                                                                  • Key points
                                                                                    • The air segment contracted 3.1%, but still holds a 65% market share
                                                                                      • Figure 17: UK inbound tourism, by transport method, by volume, 2012 and 2013
                                                                                    • Short breaks hold a 37% share of the inbound tourism market
                                                                                      • Figure 18: UK inbound tourism, by length of stay, by volume, 2012 and 2013
                                                                                    • France dominates with a 14% market share by volume…
                                                                                      • Figure 19: Top 10 UK inbound tourism source markets, by volume, year ended 30 June 2013
                                                                                    • …but the USA is the most valuable source market
                                                                                      • Figure 20: Top 10 UK inbound tourism source markets, by expenditure in the UK, year ended 30 June 2013
                                                                                    • Trips from the USA stay flat, but low-cost flights could reverse the trend
                                                                                      • Figure 21: Top 10 UK inbound tourism source markets, by volume, 2012 and 2013
                                                                                    • Expenditure has increased from eight of the top 10 most valuable markets
                                                                                      • Figure 22: Top 10 UK inbound tourism source markets, by expenditure in the UK, 2012 and 2013
                                                                                    • Tourists from the Middle East boast the highest average spend per trip
                                                                                      • Figure 23: Top 10 UK inbound tourism source markets, by average spend per trip, 2012 and 2013
                                                                                    • Tourism from Spain has crashed as its economy continues to suffer
                                                                                      • Figure 24: Best- and worst-performing UK inbound tourism source markets, by volume, 2012 and 2013
                                                                                    • Spending by French tourists has increased by £0.25 billion
                                                                                      • Figure 25: Best- and worst-performing UK inbound tourism source markets, by expenditure in the UK, 2012 and 2013
                                                                                  • Companies and Products

                                                                                      • VisitBritain
                                                                                        • Background
                                                                                          • Financial performance
                                                                                            • Figure 26: Grant-in-aid allocation to British Tourist Authority, 2011-15
                                                                                            • Figure 27: Key financials for British Tourist Authority, 2012 and 2013
                                                                                            • Figure 28: Breakdown of British Tourist Authority’s revenue, by location of sales offices, 2012 and 2013
                                                                                          • Recent activity
                                                                                            • Future strategy
                                                                                              • VisitEngland
                                                                                                • Background
                                                                                                  • Figure 29: Top 10 origins of international holiday visitors to England, by number of trips, 2011 and 2012
                                                                                                  • Figure 30: Top 10 origins of international holiday visitors to England, by total spend, 2011 and 2012
                                                                                                • Recent activity
                                                                                                  • VisitScotland
                                                                                                    • Background
                                                                                                      • Financial performance
                                                                                                        • Figure 31: Key financials for VisitScotland, 2011 and 2012
                                                                                                        • Figure 32: Top 10 origins of international holiday visitors to Scotland, by number of trips, 2011 and 2012
                                                                                                        • Figure 33: Top 10 origins of international holiday visitors to Scotland, by total spend, 2011 and 2012
                                                                                                      • Recent activity
                                                                                                        • Visit Wales
                                                                                                          • Background
                                                                                                            • Financial performance
                                                                                                              • Figure 34: Top 10 origins of international holiday visitors to Wales, by number of trips, 2011 and 2012
                                                                                                              • Figure 35: Top 10 origins of international holiday visitors to Wales, by total spend, 2011 and 2012
                                                                                                            • Recent activity
                                                                                                              • Northern Ireland Tourism Board
                                                                                                                • Background
                                                                                                                  • Financial performance
                                                                                                                    • Figure 36: Key financials for Northern Ireland Tourist Board, 2011 and 2012
                                                                                                                    • Figure 37: Top 10 origins of international holiday visitors to Northern Ireland, by number of trips, 2011 and 2012
                                                                                                                    • Figure 38: Top 10 origins of international holiday visitors to Northern Ireland, by total spend, 2011 and 2012
                                                                                                                  • Recent activity
                                                                                                                    • London & Partners
                                                                                                                      • Background
                                                                                                                        • Financial performance
                                                                                                                          • Figure 39: Key financials for London & Partners 2012
                                                                                                                          • Figure 40: Top 10 origins of international holiday visitors to London, by number of trips, 2011 and 2012
                                                                                                                          • Figure 41: Top 10 origins of international holiday visitors to London, by total spend, 2011 and 2012
                                                                                                                        • Recent activity
                                                                                                                          • Heritage Lottery Fund
                                                                                                                            • Background
                                                                                                                              • Financial performance
                                                                                                                                • Figure 42: Key financials for Heritage Lottery Fund, 2012 and 2013
                                                                                                                              • Recent activity
                                                                                                                                • Global Blue
                                                                                                                                  • Background
                                                                                                                                    • Financial performance
                                                                                                                                      • Figure 43: Key financials for Global Blue, 2011 and 2012
                                                                                                                                    • Recent activity
                                                                                                                                      • Premier Tax Free
                                                                                                                                        • Background
                                                                                                                                          • Financial performance
                                                                                                                                            • Figure 44: Key financials for Premier Tax Free, 2010 and 2011
                                                                                                                                          • Recent activity
                                                                                                                                          • Holidays Taken to the UK

                                                                                                                                            • Key points
                                                                                                                                              • Consumer demand suggests the market has significant room to grow
                                                                                                                                                • Figure 45: Holidays taken to the UK, by country, October 2013
                                                                                                                                              • The UK is struggling to attract Europe’s grey gold
                                                                                                                                                • Young Americans are a key demographic for future growth
                                                                                                                                                  • High costs have depressed demand from the US
                                                                                                                                                  • What Attracts Tourists to the UK?

                                                                                                                                                    • Key points
                                                                                                                                                      • UK heritage is the primary attraction for both Europeans and Americans
                                                                                                                                                        • Figure 46: UK attractions, by country, October 2013
                                                                                                                                                      • The appeal of UK attractions differs greatly between source markets
                                                                                                                                                        • Figure 47: UK attractions, by country, October 2013
                                                                                                                                                      • Younger tourists favour shopping, food and drink, festivals and sports
                                                                                                                                                      • Reasons for Not Wanting to Visit the UK

                                                                                                                                                        • Key points
                                                                                                                                                          • High travel costs dampen demand from both Europe and the US
                                                                                                                                                            • Figure 48: Reasons for not wanting to visit the UK, by country, October 2013
                                                                                                                                                          • High London prices are shaping negative perceptions of the UK
                                                                                                                                                            • Half of Americans who do not want to revisit think they have seen enough
                                                                                                                                                              • Spanish and Americans are the most likely to not holiday abroad
                                                                                                                                                                • Figure 49: Reasons for not wanting to visit the UK, by country, October 2013
                                                                                                                                                            • Attitudes towards Visiting the UK

                                                                                                                                                              • Key points
                                                                                                                                                                • English language is a key driver behind tourism from Europe and the US
                                                                                                                                                                  • Figure 50: Attitudes towards visiting the UK, by country, October 2013
                                                                                                                                                                • The impact of the Olympics and royal birth on inbound tourism is limited
                                                                                                                                                                  • High domestic travel costs are proving a dampener to regional tourism
                                                                                                                                                                    • Spanish are the most likely to view the UK as more expensive than home
                                                                                                                                                                      • Figure 51: Attitudes towards visiting the UK, by country, October 2013
                                                                                                                                                                  • China – Holidays Taken to Europe

                                                                                                                                                                    • Key points
                                                                                                                                                                      • UK is China’s second favourite European destination, behind France
                                                                                                                                                                        • Figure 52: China outbound tourism to Europe, September 2013
                                                                                                                                                                      • High costs are a significant barrier for travel to Europe
                                                                                                                                                                      • China – Attitudes towards Visiting Europe

                                                                                                                                                                        • Key points
                                                                                                                                                                          • Schengen visa gives member states a distinct advantage
                                                                                                                                                                            • Figure 53: China attitudes towards travelling to Europe, September 2013
                                                                                                                                                                          • University institutions are a key driver behind Chinese interest in the UK
                                                                                                                                                                            • Just 16% of respondents think the UK is lacking in luxury shopping
                                                                                                                                                                            • Appendix – Holidays Taken to the UK

                                                                                                                                                                                • Figure 54: Holidays taken to the UK, by country, October 2013
                                                                                                                                                                                • Figure 55: Holidays taken to the UK – European countries, by demographics, October 2013
                                                                                                                                                                                • Figure 56: Holidays taken to the UK – US, by demographics, October 2013
                                                                                                                                                                            • Appendix – What Attracts Tourists to the UK?

                                                                                                                                                                                • Figure 57: UK attractions, by country, October 2013
                                                                                                                                                                                • Figure 58: Most popular UK attractions – European countries, by demographics, October 2013
                                                                                                                                                                                • Figure 59: Next most popular UK attractions – European countries, by demographics, October 2013
                                                                                                                                                                                • Figure 60: Most popular UK attractions – US, by demographics, October 2013
                                                                                                                                                                                • Figure 61: Next most popular UK attractions – US, by demographics, October 2013
                                                                                                                                                                            • Appendix – Reasons for Not Wanting to Visit the UK

                                                                                                                                                                                • Figure 62: Reasons for not wanting to visit the UK, by country, October 2013
                                                                                                                                                                                • Figure 63: Most popular reasons for not wanting to visit the UK – European countries, by demographics, October 2013
                                                                                                                                                                                • Figure 64: Next most popular reasons for not wanting to visit the UK – European countries, by demographics, October 2013
                                                                                                                                                                                • Figure 65: Most popular reasons for not wanting to visit the UK – US, by demographics, October 2013
                                                                                                                                                                                • Figure 66: Next most popular reasons for not wanting to visit the UK – US, by demographics, October 2013
                                                                                                                                                                            • Appendix – Attitudes towards Visiting the UK

                                                                                                                                                                                • Figure 67: Attitudes towards visiting the UK, by country, October 2013
                                                                                                                                                                                • Figure 68: Most popular attitudes towards visiting the UK – European countries, by demographics, October 2013
                                                                                                                                                                                • Figure 69: Next most popular attitudes towards visiting the UK – European countries, by demographics, October 2013
                                                                                                                                                                                • Figure 70: Most popular attitudes towards visiting the UK – US, by demographics, October 2013
                                                                                                                                                                                • Figure 71: Next most popular attitudes towards visiting the UK – US, by demographics, October 2013
                                                                                                                                                                            • Appendix – China – Holidays Taken to Europe

                                                                                                                                                                                • Figure 72: China outbound tourism to Europe, September 2013
                                                                                                                                                                                • Figure 73: China outbound tourism to the UK, by demographics, September 2013
                                                                                                                                                                            • Appendix – China – Attitudes towards Visiting Europe

                                                                                                                                                                                • Figure 74: China attitudes towards travelling to Europe, September 2013
                                                                                                                                                                                • Figure 75: Most popular China attitudes towards travelling to Europe, by demographics, September 2013
                                                                                                                                                                                • Figure 76: Next most popular China attitudes towards travelling to Europe, by demographics, September 2013

                                                                                                                                                                            Companies Covered

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

                                                                                                                                                                            Inbound Tourism - UK - November 2013

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