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Long-haul Holidays - UK - March 2011

Consumers are still more likely to use travel agents to research and book their trips beyond Europe than they are for short-haul trips. However, worryingly for agents, Mintel’s research shows that just 13% of consumers now say they would want expert advice from a travel agent before booking a long-haul holiday, a fall of seven percentage points since November 2006.

  • From a high water mark of 8.5 million trips and over £8 billion in expenditure (minus transport costs) achieved in 2008, the long-haul sector has since fallen by 15% in both volume and value terms over the past two years under the impact of recession. In 2010 there were an estimated 7.24 million trips with a value of just under £7 billion.
  • Gradual recovery at best is still the most likely scenario for long-haul in the next 12 months. Squeezed incomes and job insecurity, air travel taxes, fuel supplements and geopolitical unrest in North Africa will continue to affect many consumers, leading many to postpone more expensive trips and plump for short-haul destinations.
  • Long-haul holidaymakers are most likely to fall into one of two groups: the first is ABC1 pre-/no family couples or singles; the second is ABC1 third age couples, particularly in the pre-retirement 55-64 age group.
  • The strongest attraction of long-haul holidays is seen as the opportunity to enjoy fresh cultural experiences, selected by a third of people overall and over half of recent long-haul travellers. The percentage of consumers who see this as an attraction of long-haul holidays has risen seven points in the past four years.
  • Just one in eight consumers say they would want expert advice from a travel agent before booking a long-haul holiday, a fall of seven percentage points over the past four years.
  • Demand for all-inclusive resorts will continue as consumers chase value and try to predict and control their spending. Long-haul wedding/honeymoons should continue to grow, offering a value alternative to increasingly expensive UK weddings. Latin America led market recovery in 2010 and is expected to expand strongly in the future, led by Mexico, but also emerging tourism markets such as Costa Rica and Brazil.

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Issues in the Market

            • Does long-haul remain a key strength for high street travel agents?
              • In the future, will long-haul travel become accessible to a wider demographic, or will it become increasingly the preserve of the wealthy?
                • Are there particular stages of life when people tend to travel long-haul, and to what extent is this being shaped by economic or demographic trends?
                  • What is the likely impact of geopolitical unrest in the Middle East/North Africa region on the long-haul market?
                    • How much do consumers consider questions of ethical travel when travelling long-haul and what are the possible implications for the future of long-haul travel?
                    • Future Opportunities

                      • Bringing the ‘far near’ even nearer
                        • Extending the Iberian brand
                        • Executive Summary

                            • The market
                              • Figure 1: Long-haul holidays market size and forecast* 2005-15
                            • Short-haul recovers edge
                              • APD hits long-haul
                                • Fuel surcharges return
                                  • Companies, brands and Innovation
                                    • Figure 2: Percentage change in revenue for selected long-haul operators, 2009-10
                                  • Dynamic packaging
                                    • Online vs high street
                                      • The consumer
                                        • Figure 3: Participation in long-haul holidays, January 2011
                                      • New, different, cultural
                                        • Luxury and exploration
                                          • Expert advice
                                            • Singles demand
                                              • What we think
                                              • Internal Market Environment

                                                • Key points
                                                  • Signs of recovery
                                                    • Figure 4: Domestic vs overseas holidays, 2005-10
                                                  • Pump prices spell trouble for domestic holidays
                                                    • Figure 5: Domestic and overseas holidays expenditure, 2005-10
                                                  • Spain reasserts value for money
                                                    • Figure 6: Post Office Worldwide Holiday Costs Barometer of resort costs for UK tourists – January 2011
                                                  • Sri Lanka the cheapest long-haul option
                                                    • Budget flights spread their wings
                                                      • Long-haul low cost
                                                        • Impact of APD
                                                          • Figure 7: Air Passenger Duty, as of November 2010
                                                        • Return of the super-spike
                                                          • Figure 8: Crude oil prices, 2005-11
                                                        • Surcharges hit long-haul
                                                          • Dream ticket
                                                          • Broader Market Environment

                                                            • Key points
                                                              • Wrong kind of snow
                                                                • Figure 9: GDP quarterly percentage change, Q1 2005-Q4 2010
                                                              • Wage squeeze
                                                                • Figure 10: UK consumer confidence index, March 2010-February 2011
                                                              • Holidays still top priority
                                                                • Figure 11: Expenditure priorities, 2005-10
                                                              • 25-34s and 45-54s offer potential
                                                                • Figure 12: Forecast adult population trends, by lifestage, 2005-15
                                                                • Figure 13: Trends and projections in the UK population (000s), by age group, 2005-15
                                                              • AB growth good for long-haul
                                                                • Figure 14: Forecast adult population trends, by socio-economic group, 2005-15
                                                              • Pound stays weak against most currencies
                                                                • Figure 15: Annual average exchange rates for Sterling, 2007-11
                                                            • Competitive Context

                                                              • Key points
                                                                • Long-haul still outperforms overseas market
                                                                  • Figure 16: Long-haul vs short-haul holiday volume and expenditure, at current prices, 2005-10
                                                                  • Figure 17: Outbound holiday visits, by region visited, 2005-10
                                                              • Strengths and Weaknesses in the Market

                                                                  • Strengths
                                                                    • Long-haul culture vultures
                                                                      • Aviation spreads its wings
                                                                        • Year-round advantages
                                                                          • The third age of long-haul
                                                                            • Latin America tipped for growth
                                                                              • Weaknesses
                                                                                • Wage squeeze
                                                                                  • Short-haul looking better value
                                                                                    • Only for the wealthy?
                                                                                      • Geopolitical upheaval
                                                                                        • Well-travelled consumers grow less reliant on agents
                                                                                        • Who’s Innovating?

                                                                                          • Key points
                                                                                            • No frills with comfort
                                                                                              • Long-haul goes dynamic
                                                                                                • Flexible options
                                                                                                  • Far near
                                                                                                    • Latin lessons
                                                                                                      • Ethical travel
                                                                                                        • Targeting the over-50s
                                                                                                          • Heading down river
                                                                                                            • Bring home a friend
                                                                                                            • Market Size and Forecast

                                                                                                              • Key points
                                                                                                                • Tight year ahead for long-haul
                                                                                                                  • Figure 18: Long-haul holidays volume and percentage change, 2005-15
                                                                                                                  • Figure 19: Long-haul holidays expenditure* and percentage change, 2005-15
                                                                                                                • Forecast
                                                                                                                  • Figure 20: Volume forecast of long-haul holidays, 2010-15
                                                                                                                  • Figure 21: Value* forecast of long-haul holidays, 2010-15
                                                                                                                • Forecast methodology
                                                                                                                • Segment Performance

                                                                                                                  • Key points
                                                                                                                    • Middle East/North Africa the only five-year growth region
                                                                                                                      • Figure 22: Overseas holidays, by region, 2005-10
                                                                                                                    • Latin American potential
                                                                                                                      • Threat to Egypt and Tunisia
                                                                                                                        • Figure 23: Top 20 long-haul destinations 2005-10
                                                                                                                      • Disaster recovery
                                                                                                                        • Jamaica fights back
                                                                                                                          • Package strongholds
                                                                                                                            • Figure 24: Visits, spending, average spend, proportion of package holidays, duration and spend per night per region 2009
                                                                                                                          • Go further, stay longer
                                                                                                                            • Figure 25: Nights spent on last holiday, by region, 2009
                                                                                                                          • Long-haul has more diversity
                                                                                                                            • Figure 26: Sort of holiday taken for holidays/short breaks, 2010
                                                                                                                          • Family visits
                                                                                                                            • Figure 27: Type of accommodation used for holidays/short breaks, 2010
                                                                                                                          • Year-round business
                                                                                                                            • Figure 28: Long-haul holidays taken, by quarter 2005-09
                                                                                                                          • Four in ten spend over £2,500
                                                                                                                            • Figure 29: Total amount spent on holidays* for self and family in the last 12 months (excluding spending money), by region, 2010
                                                                                                                            • Figure 30: Total amount spent on short breaks* for self and family in the last 12 months (excluding spending money), by region, 2010
                                                                                                                        • Brand Research

                                                                                                                          • Brand map
                                                                                                                              • Figure 31: Attitudes towards long-haul holiday destinations, December 2010
                                                                                                                            • Brand attitudes
                                                                                                                              • Figure 32: Attitudes, by long-haul holiday destinations, December 2010
                                                                                                                            • Brand personality
                                                                                                                              • Figure 33: Long-haul holiday destinations personality – macro image, December 2010
                                                                                                                              • Figure 34: long-haul holiday destinations personality – micro image, December 2010
                                                                                                                            • Correspondence analysis
                                                                                                                              • Brand experience
                                                                                                                                • Figure 35: Long-haul holiday destinations visited, December 2010
                                                                                                                                • Figure 36: Satisfaction with various long-haul holiday destinations, February 2010
                                                                                                                                • Figure 37: Consideration of long-haul holiday destinations, December 2010
                                                                                                                                • Figure 38: Consumer perceptions of current long-haul holiday destination performance, December 2010
                                                                                                                                • Figure 39: Long-haul holiday destination recommendation – Net Promoter Score, December 2010
                                                                                                                              • Brand index
                                                                                                                                • Figure 40: Long-haul holiday destination index, December 2010
                                                                                                                                • Figure 41: Long-haul holiday destination index vs. recommendation, December 2010
                                                                                                                              • Target group analysis
                                                                                                                                • Figure 42: Target groups, December 2010
                                                                                                                                • Figure 43: Long-haul holiday destinations visited, by target groups, December 2010
                                                                                                                              • Group One – The Conformists
                                                                                                                                • Group Two – Simply the Best
                                                                                                                                  • Group Three – Shelf Stalkers
                                                                                                                                    • Group Four – Habitual Shoppers
                                                                                                                                      • Group Five – The Individualists
                                                                                                                                      • Companies and Products

                                                                                                                                          • Bales Worldwide
                                                                                                                                              • Figure 44: Key financials for Bales Worldwide Limited, 2008-09
                                                                                                                                            • Cosmos/Monarch
                                                                                                                                                • Figure 45: Key financials for Cosmos Holidays PIc, 2008-09
                                                                                                                                              • Explore Worldwide
                                                                                                                                                  • Figure 46: Key financials for Explore Worldwide Limited, 2009-10
                                                                                                                                                • Kuoni
                                                                                                                                                  • Figure 47: Key financials for Kuoni Travel Limited UK, 2008-09
                                                                                                                                                • Thomas Cook
                                                                                                                                                  • Figure 48: Key financials for Thomas Cook Group Plc – UK & Ireland, India and Middle East segment, 2009-10
                                                                                                                                                • Trailfinders
                                                                                                                                                    • Figure 49: Key financials for Trailfinders Limited, 2009-10
                                                                                                                                                  • TUI
                                                                                                                                                      • Figure 50: Key financials for TUI Plc – UK & Ireland market, 2009-10
                                                                                                                                                    • Virgin Holidays
                                                                                                                                                        • Figure 51: Key financials for Virgin Holidays Limited, 2009-10
                                                                                                                                                      • Western & Oriental plc
                                                                                                                                                      • Channels to Market

                                                                                                                                                        • Key points
                                                                                                                                                          • Web dominates research but traditional sources still in use
                                                                                                                                                            • Figure 52: Research sources used for holidays overseas, 2010
                                                                                                                                                          • Online booking also preferred for long-haul
                                                                                                                                                            • Figure 53: Method used to book holidays/short breaks to Europe and outside Europe, 2010
                                                                                                                                                        • Long-haul Holiday Taking

                                                                                                                                                          • Key points
                                                                                                                                                            • Nearly half have been outside Europe
                                                                                                                                                              • Figure 54: Participation in long-haul holidays, January 2011
                                                                                                                                                            • Two core groups
                                                                                                                                                              • Single household interest
                                                                                                                                                              • General Holiday Attitudes

                                                                                                                                                                • Key points
                                                                                                                                                                  • Two travel tribes
                                                                                                                                                                    • Figure 55: Attitudes towards holidays, January 2011
                                                                                                                                                                  • Shock of the new
                                                                                                                                                                    • Reality versus luxury
                                                                                                                                                                      • ABC third agers want it both ways
                                                                                                                                                                        • Holiday show-offs
                                                                                                                                                                        • Attitudes Towards Long-haul Holidays

                                                                                                                                                                          • Key points
                                                                                                                                                                            • Culture vultures take off
                                                                                                                                                                              • Figure 56: Attitudes towards long-haul holidays, January 2011
                                                                                                                                                                              • Figure 57: selected attitudes towards long-haul holidays, November 2006 vs January 2011
                                                                                                                                                                            • Beyond Britain’s backyard
                                                                                                                                                                              • Perennial call of the wild
                                                                                                                                                                                • Young itching for experience
                                                                                                                                                                                  • Consumers grow less reliant on agents
                                                                                                                                                                                    • Security matters
                                                                                                                                                                                      • APD impact
                                                                                                                                                                                        • Long-haul ethical
                                                                                                                                                                                        • Targeting Opportunities

                                                                                                                                                                                          • Key points
                                                                                                                                                                                            • Target groups
                                                                                                                                                                                              • Figure 58: Long-haul holidays target groups, January 2011
                                                                                                                                                                                            • Adventurous Explorers
                                                                                                                                                                                              • Demographic profile
                                                                                                                                                                                                • Marketing message
                                                                                                                                                                                                  • Long-haul Loungers
                                                                                                                                                                                                    • Demographic profile
                                                                                                                                                                                                      • Marketing message
                                                                                                                                                                                                        • Need Encouragement
                                                                                                                                                                                                          • Demographic profile
                                                                                                                                                                                                            • Marketing message
                                                                                                                                                                                                              • Hard To Afford
                                                                                                                                                                                                                • Demographic profile
                                                                                                                                                                                                                  • Marketing message
                                                                                                                                                                                                                    • Dislike Distance
                                                                                                                                                                                                                      • Demographic profile
                                                                                                                                                                                                                        • Marketing message
                                                                                                                                                                                                                        • Appendix – Overall Holiday Taking

                                                                                                                                                                                                                            • Figure 59: Holidays abroad taken in the last 12 months, by demographics, January 2011
                                                                                                                                                                                                                        • Appendix – Long-haul Holiday Taking

                                                                                                                                                                                                                            • Figure 60: Most popular participation in long-haul holidays, by demographics, January 2011
                                                                                                                                                                                                                            • Figure 61: Next most popular participation in long-haul holidays, by demographics, January 2011
                                                                                                                                                                                                                        • Appendix – General Holiday Attitudes

                                                                                                                                                                                                                            • Figure 62: Attitudes towards holidays, by most popular participation in long-haul holidays, January 2011
                                                                                                                                                                                                                            • Figure 63: Attitudes towards holidays, by next most popular participation in long-haul holidays, January 2011
                                                                                                                                                                                                                            • Figure 64: Most popular attitudes towards holidays, by demographics, January 2011
                                                                                                                                                                                                                            • Figure 65: Next most popular attitudes towards holidays, by demographics, January 2011
                                                                                                                                                                                                                        • Appendix – Attitudes Towards Long-haul Holidays

                                                                                                                                                                                                                            • Figure 66: Attitudes towards long-haul holidays, by most popular participation in long-haul holidays, January 2011
                                                                                                                                                                                                                            • Figure 67: Attitudes towards long-haul holidays, by most popular participation in long-haul holidays, January 2011
                                                                                                                                                                                                                            • Figure 68: Attitudes towards long-haul holidays, by most popular attitudes towards holidays, January 2011
                                                                                                                                                                                                                            • Figure 69: Attitudes towards long-haul holidays, by next most popular attitudes towards holidays, January 2011
                                                                                                                                                                                                                            • Figure 70: Most popular attitudes towards long-haul holidays, by demographics, January 2011
                                                                                                                                                                                                                            • Figure 71: Next most popular attitudes towards long-haul holidays, by demographics, January 2011
                                                                                                                                                                                                                        • Appendix – Targeting Opportunities

                                                                                                                                                                                                                            • Figure 72: Holidays abroad taken in the last 12 months, by target groups, January 2011
                                                                                                                                                                                                                            • Figure 73: Attitudes towards holidays, by target groups, January 2011
                                                                                                                                                                                                                            • Figure 74: Participation in long-haul holidays, by target groups, January 2011
                                                                                                                                                                                                                            • Figure 75: Attitudes towards long-haul holidays, by target groups, January 2011
                                                                                                                                                                                                                            • Figure 76: Target groups, by demographics, January 2011

                                                                                                                                                                                                                        Companies Covered

                                                                                                                                                                                                                        • Bales Worldwide
                                                                                                                                                                                                                        • Explore Worldwide Ltd
                                                                                                                                                                                                                        • First Choice Holidays & Flights Ltd
                                                                                                                                                                                                                        • Holidaybreak plc
                                                                                                                                                                                                                        • House of Fraser Plc
                                                                                                                                                                                                                        • Kuoni Travel Ltd
                                                                                                                                                                                                                        • Marlboro Classics
                                                                                                                                                                                                                        • Monarch Airlines
                                                                                                                                                                                                                        • Monarch Travel Group
                                                                                                                                                                                                                        • The Adventure Company
                                                                                                                                                                                                                        • Thomas Cook Group PLC
                                                                                                                                                                                                                        • Thomson Holidays
                                                                                                                                                                                                                        • Trailfinders Travel
                                                                                                                                                                                                                        • TUI Travel PLC
                                                                                                                                                                                                                        • TUI UK
                                                                                                                                                                                                                        • Virgin Group Ltd.
                                                                                                                                                                                                                        • Virgin Holidays
                                                                                                                                                                                                                        • Western & Oriental plc

                                                                                                                                                                                                                        Long-haul Holidays - UK - March 2011

                                                                                                                                                                                                                        £1,995.00 (Excl.Tax)