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Package vs Independent Holidays - UK - April 2015

The overseas holiday market has a positive outlook for 2015 and beyond. Package holiday volumes are rising at a higher rate than independent holidays. Consumer confidence improvements will see increases in the value of holidays, however habits developed during the recession to save costs continue to be part of the holiday booking process.

Consumers are prepared to pay extra during their holidays, however for many this revolves around eating out, rather than upgrading to luxury options. Holidaymakers that are looking to take relaxing holidays, such as spending time at the beach or going on a cruise, are more likely to book a package, proving that they want the relaxation to start before they get on holiday.

This report looks at the following areas:

  • The Package Travel Directive will pose new challenges for online operators
  • Short-hop holidays are on the rise as consumers compromise on length of stay to maximise their holiday budget
  • Holidays with a purpose will be a growing trend in 2015
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. In the consumer sections of this report we have two types of package holiday, pure package and dynamic package.
 
These are defined as follows:
 
Pure package: Travel and accommodation booked together at the same time with only one total price shown (ie no breakdown costs shown).
 
Dynamic package: Travel and accommodation booked together but separate prices shown for each, or travel and accommodation booked separately but from the same retailer and within 24 hours.
 
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. Overview

    • What you need to know
      • Products covered in this report
      • Executive Summary

        • A robust forecast for overseas holidays
          • Figure 1: Best- and worst-case forecast for volume of UK overseas independent holidays, 2009-19
          • Figure 2: Best- and worst-case forecast for volume of UK overseas package holidays, 2009-19
        • Independent holidays are the most popular regardless of destination
          • Figure 3: Holiday destination by holiday type, November 2014
        • The top two market players improve their market share
          • Figure 4: Holiday type booked by affluent holidaymakers, November 2014
        • Consumers continue to look for good value despite a healthier economy
          • Figure 5: Percentage of holidays booked as a package, November 2014
      • Issues and Insights

        • The Package Travel Directive will pose new challenges for online operators
          • The facts
            • The implications
              • Short-hop holidays are on the rise as consumers compromise on length of stay to maximise their holiday budget
                • The facts
                  • The implications
                    • Holidays with a purpose will be a growing trend in 2015
                      • The facts
                        • The implications
                        • The Market – What You Need to Know

                          • Improved confidence to boost holiday spend in 2015
                            • PTD could make life difficult for companies
                              • Strong pound encourages trips abroad
                                • APD reform to boost long-haul market
                                  • Short-stay Euro breaks growing
                                    • Cruise market activity indicates a positive 2015
                                      • Consumers look to friends and family/review sites for recommendations
                                      • Market Size and Forecast

                                        • Growth is forecast for both package and independent overseas holidays
                                          • Figure 6: Forecast volume of UK overseas (independent and packaged holidays), 2009-19
                                          • Figure 7: Forecast value of UK overseas (independent and then packaged holidays), 2009-19
                                        • Economic and regulatory factors combine to boost the overseas market
                                          • Forecasts
                                            • Figure 8: Forecast volume of UK overseas independent holidays, 2009-19
                                            • Figure 9: Forecast volume of UK overseas package holidays, 2009-19
                                            • Figure 10: Forecast value of UK overseas independent holidays, 2009-19
                                            • Figure 11: Forecast value of UK overseas package holidays, 2009-19
                                        • Segment Performance

                                          • Holidaymakers fall back in love with city breaks…
                                            • …but exotic destinations are also looking attractive
                                              • Figure 12: Package vs independent overseas holidays, by long-haul vs short-haul, 2009-14
                                            • Air travel outperforms the rest of the market
                                              • Figure 13: Package vs independent overseas holidays, by transport method, 2009-14
                                            • European short-hop destinations grow in popularity…
                                              • …as do the USA and Mexico
                                                • Figure 14: Top 10 overseas package holiday destinations, by volume, 2013 and 2014
                                              • The Caribbean continues to be a package holiday hot spot
                                                • Figure 15: Top 10 overseas package holiday destinations, by market share of package bookings, 2013-14
                                              • Short stay UK holidays will perform better than long stay in 2015
                                                • Figure 16: Short vs long holidays in Great Britain, by volume, 2009-14
                                                • Figure 17: UK domestic holidays, by holiday type, November 2014
                                            • Market Drivers

                                              • UK economic health will boost holiday spending
                                                • Scrapping of top two APD bands will provide a boost to long-haul
                                                  • Figure 18: Air Passenger Duty (APD) rates April 2012-April 2015
                                                • The Package Travel Directive makes its way through the EU parliament
                                                  • Online search will push consumers towards independent holidays
                                                    • Figure 19: Holiday research sources used for holidays taken in the last 12 months, September 2014
                                                • Key Players – What You Need to Know

                                                  • TUI and Thomas Cook maintain market dominance…
                                                    • …but are trumped by Trivago on adspend
                                                      • 2014 sees specialist activity resort launches
                                                        • P2P providers to boost independent market
                                                          • Luxury segment expansion
                                                            • Technology provides cross-selling opportunities
                                                            • Market Share

                                                              • The top two tour operators take a 44% share of the top 10
                                                                • Figure 20: Passengers licensed under ATOL protection, by top 10 ATOL holders, 2012-14
                                                              • Large tour operators continue to invest in online
                                                                • Figure 21: ATOL tour operator failures/closures in the UK, march 2013-January 2015
                                                            • Brand Communication and Promotion

                                                              • Independent holiday services dominate advertising spend
                                                                • Figure 22: Main monitored media advertising spend on travel*, by top 10 advertisers in 2014, 2012-14
                                                              • TV takes over half of advertising budgets
                                                                • Figure 23: Main monitored media advertising spend on travel*, by media type by top 10 advertisers 2012-14
                                                            • Launch Activity and Innovation

                                                              • Travel with a purpose
                                                                • Curated authentic experiences
                                                                  • Holiday memories as a service
                                                                    • Social media selling
                                                                      • Luxury package brands may struggle to find their market share
                                                                        • Figure 24: Destination of holiday, by household income level, November 2014
                                                                      • Cruise operators banking on growth in 2015
                                                                        • Technology enabled package holidays
                                                                        • The Consumer – What You Need to Know

                                                                          • UK trips largely independent with overseas trips evenly split
                                                                            • Families hit the city as well as beach
                                                                              • Value perceptions drive both main booking methods
                                                                                • Location first for independents
                                                                                  • Package profile skews to middle-income consumers
                                                                                    • Potential pent-up demand among 35-54s
                                                                                      • Long-haul travellers less likely to be inspired by agents
                                                                                      • Holiday Behaviours

                                                                                        • Over half of UK holidaymakers book holidays independently
                                                                                          • Figure 25: Method of booking for holidays taken in the UK or abroad, November 2014
                                                                                        • 31% of those aged 35-54 did not take a holiday last year
                                                                                          • Figure 26: Holiday destination, by age group, November 2014
                                                                                          • Figure 27: Type of holiday booked, by age group, November 2014
                                                                                        • City breaks are almost as popular as beach holidays for families
                                                                                          • Figure 28: Type of holiday booked, by age of children in the family, November 2014
                                                                                          • Figure 29: Type of holiday taken, by age of children in the family, November 2014
                                                                                      • Attitudes to Package Holidays

                                                                                        • Value for money is the top reason for booking package holidays
                                                                                          • Figure 30: Package holiday booking - attitudes and habits, November 2014
                                                                                        • Relaxation holidays are more likely to be booked as a package
                                                                                          • Figure 31: Type of holiday taken in the last 12 months (UK or abroad), by method of booking last holiday abroad, November 2014
                                                                                        • Middle income households are more likely to book package holidays
                                                                                          • Figure 32: Type of holiday abroad booked, by household income, November 2014
                                                                                      • Attitudes to Independent Holidays

                                                                                        • Independent holiday bookers focus on location first
                                                                                          • Figure 33: Independent holiday booking - attitudes and habits, November 2014
                                                                                          • Figure 34: Independent holiday booking – attitudes and habits, by holiday type, November 2014
                                                                                      • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                        • Data sources
                                                                                          • Abbreviations
                                                                                            • Fan chart forecast

                                                                                            Companies Covered

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

                                                                                            Package vs Independent Holidays - UK - April 2015

                                                                                            £1,995.00 (Excl.Tax)