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Package vs Independent Holidays - UK - April 2017

“At the moment, consumer appetite for holidays shows no sign of dampening, despite the weak Pound and reports of economic uncertainty on the horizon. However, holidaymakers will be looking for safety after the collapse of a number of travel companies, as well as ways to make their money go further. As a result, many will opt for aggressively priced packages, and all-inclusive deals to help them manage their spending.”

Fergal McGivney, Travel Analyst

This report looks at the following areas:

  • All-inclusive deals likely to be even more popular going forward, but diversification is key
  • Young and affluent want to have unique accommodation, but many feel that packages don't offer this
  • Customisation is key for younger consumers
  • Customisation via B2C live chat messaging apps could help encourage younger consumers to book packages

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Table of contents

  1. Overview

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

          • The market
            • Growth opportunities for package holidays over the next two years
              • Figure 1: Forecast volume of UK overseas independent holidays, 2011-21
              • Figure 2: Forecast volume of UK overseas package holidays, 2011-21
            • The consumer
              • Package and independent bookings remain the same
                  • Figure 3: Package versus independent bookings, February 2017
                • Perceived value is the main reason for booking a package
                  • Figure 4: Reasons for booking holiday as a package, February 2017
                • Value and flexibility the main driver of independent bookings
                  • Figure 5: Reasons for booking holiday independently, February 2017
                • Young and affluent want to have unique accommodation
                  • Figure 6: Package holiday attitudes I, February 2017
                • Consumers recognise all-inclusive can help manage their money
                  • Figure 7: Package holiday attitudes II, February 2017
                • What we think
                • Issues and Insights

                  • All-inclusive deals likely to be even more popular going forward, but diversification is key
                    • The facts
                      • The implications
                        • Young and affluent want to have unique accommodation, but many feel that packages don’t offer this
                          • The facts
                            • The implications
                              • Customisation is key for younger consumers
                                • The facts
                                  • The implications
                                    • Customisation via B2C live chat messaging apps could help encourage younger consumers to book packages
                                      • The facts
                                        • The implications
                                        • The Market – What You Need to Know

                                          • 2015 and 2016 were strong growth years for packages
                                            • Package market share is expected to grow over the next two years
                                              • Cheaper airfares have fuelled independent bookings…
                                                • …but package bookings likely to increase in market share with the launch of Ryanair Holidays
                                                  • Spain, Greece and France are the top pakcage destinations
                                                  • Market Size and Forecast

                                                    • Growth opportunities for package holidays over the next two years
                                                        • Figure 8: Forecast of UK overseas volume, package and independent holidays, 2010-20
                                                        • Figure 9: Forecast volume of UK overseas independent holidays, 2011-21
                                                        • Figure 10: Forecast volume of UK overseas package holidays, 2011-21
                                                        • Figure 11: Forecast of UK overseas value*, package and independent holidays, 2010-20
                                                        • Figure 12: Forecast value of UK overseas independent holidays, 2011-21
                                                        • Figure 13: Forecast value of UK overseas package holidays, 2011-21
                                                      • Brexit and the travel market
                                                      • Market Segmentation

                                                        • Cheaper airfares driving independent bookings
                                                            • Figure 14: easyJet’s pay day notification
                                                          • Package bookings likely to increase in market share with the launch of Ryanair Holidays
                                                            • Figure 15: Package versus independent overseas holidays, by transport method, 2010-16
                                                          • Spain, Greece and France are the top pakcage destinations
                                                            • Figure 16: Top 20 destinations for Package Holidays , Q3 2015 to Q3 2016
                                                            • Figure 17: UK Foreign Office travel advice for Turkey, March 2017
                                                          • Top 20 destinations for package bookings
                                                            • Figure 18: Top 20 countries for package bookings, Q1-Q3 2015 versus Q1-Q3 2016
                                                          • Top 20 destinations for independent bookings
                                                            • Figure 19: Top 20 countries for independent bookings, Q1-Q3 2015 versus Q1-Q3 2016
                                                        • Market Drivers

                                                          • Inflation rises while the Pound remains low
                                                            • Figure 20: Pounds versus euro and US Dollar, March 2016-March 2017
                                                          • Oil is cheap compared to 2013/14 but has increased in price recently
                                                            • Figure 21: Brent Crude Oil prices in US Dollars, 2013 average – January 2017 average
                                                          • Despite negativity surrounding Brexit, demand for holidays is still high
                                                            • Figure 22: percentage of the UK population that plan to book a holiday in the next 3 months, January 2017
                                                          • Older consumers much more financially confident
                                                            • Figure 23: Current financial situation, by age, January 2017
                                                            • Figure 24: Consumer sentiment for the coming year, by age, January 2017
                                                          • Portugal, Bulgaria, and Spain are the cheapest holiday destinations
                                                            • Figure 25: Post Office travel cost barometer 2017
                                                        • Regulatory Changes

                                                          • The Package Travel Directive
                                                            • How will Brexit affect the new Package Travel Directive?
                                                              • The falling pound means travel companies can impose surcharges
                                                                • Denied Boarding Regulation could be called into question
                                                                  • Passenger protections in light of Brexit
                                                                  • Market Share

                                                                    • TUI and Jet2holidays enjoy double-digit growth
                                                                      • Figure 26: Passengers licensed under ATOL protection, by top 10 ATOL holders, 2011-17
                                                                  • Launch Activity and Innovation

                                                                    • Hotelplan and Google partner to offer packages
                                                                      • Skyscanner and Finnair partner
                                                                        • Inghams adds two new ski packages for the Easter 2017 break
                                                                          • Music festival packages
                                                                          • The Consumer – What You Need to Know

                                                                            • Package and independent bookings remain the same
                                                                              • Value is the main reason for booking a package
                                                                                • Value and flexibly the main driver of independent bookings
                                                                                  • Young and affluent want to have unique accommodation
                                                                                    • Many consumers view package destinations as being too touristy
                                                                                    • Package versus Independent Bookings

                                                                                      • Package and independent bookings remain the same
                                                                                          • Figure 27: Package versus independent bookings, February 2017
                                                                                        • Packages most popular amongst over-55s
                                                                                          • Figure 28: Package versus independent bookings, by age, February 2017
                                                                                        • Beach breaks tend to be booked as packages, while city breaks tend to be independently booked
                                                                                          • Figure 29: Holiday types taken in the last 12 months, by package versus independent bookings, February 2017
                                                                                      • All-inclusive Packages

                                                                                        • Two thirds of packages are all-inclusive
                                                                                          • Figure 29: All-inclusive bookings, February 2017
                                                                                        • Plans for booking a package holiday in the future
                                                                                          • Figure 30: Package holiday bookings in 2017, February 2017
                                                                                      • Reasons for Booking a Package

                                                                                        • Value is the main reason for booking a package
                                                                                          • The convenience of packages
                                                                                            • A quarter of consumers feel that packages offer greater financial protection
                                                                                                • Figure 31: Reasons for booking holiday as a package, February 2017
                                                                                              • Reasons for Booking Independently
                                                                                                • Value and flexibly the main driver of independent bookings
                                                                                                  • Figure 32: Cheap flight email alerts form online flight aggregator and flight comparison site Skyscanner
                                                                                                  • Figure 33: Travel versus accommodation bookings, March 2017
                                                                                                  • Figure 34: Reasons for booking holiday independently, February 2017
                                                                                              • Attitudes towards Package Bookings

                                                                                                • Young and affluent want to have unique accommodation
                                                                                                  • Figure 35: Attitudes towards accommodation in package holidays, February 2017
                                                                                                  • Figure 36: Attitudes towards accommodation in package holidays, February 2017
                                                                                                • Many consumers see package destinations as too touristy
                                                                                                  • Figure 37: Attitudes towards accommodation in package holidays, February 2017
                                                                                                  • Figure 38: Package holiday attitudes I, February 2017
                                                                                                • Consumers recognise all-inclusive can help manage their money
                                                                                                  • Customisation via business-to-customer live chat messaging apps
                                                                                                    • Figure 39: Attitudes towards access to a travel expert while on holidays, February 2017
                                                                                                  • Airlines entering the package space
                                                                                                    • Figure 40: Package holiday attitudes II, February 2017
                                                                                                • CHAID Analysis – Attitudes towards Package Bookings

                                                                                                  • Methodology
                                                                                                    • Younger package bookers under-45 are the most receptive to B2C live chat/messaging…
                                                                                                      • … and are more likely to book an all-inclusive deal because the weak Pound
                                                                                                        • Affluent parents recognise that all-inclusive deals can be a good way to manage their spending
                                                                                                          • Affluent consumers are more likely to think that more interesting/unique accommodation can be found by booking independently
                                                                                                            • Package deals and ‘living like a local’ for city breakers
                                                                                                              • Figure 41: Target groups based on attitudes towards package and independent holidays – CHAID – Tree output, February 2017
                                                                                                              • Figure 42: Target groups based on attitudes towards package and independent holidays – CHAID – Table output, February 2017
                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                              • Abbreviations
                                                                                                                • Consumer research methodology
                                                                                                                  • Travel and tourism definitions
                                                                                                                  • Appendix – Market Size and Forecast Best- and Worst-case Forecast

                                                                                                                    • Forecast methodology
                                                                                                                        • Figure 43: Best- and worst-case forecast for independent volume, 2016-21
                                                                                                                        • Figure 44: Best- and worst-case forecast for Package volume, 2016-21
                                                                                                                        • Figure 45: Best- and worst-case forecast for Independent value, 2016-21
                                                                                                                        • Figure 46: Best- and worst-case forecast for Package value, 2016-21

                                                                                                                    Companies Covered

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

                                                                                                                    Package vs Independent Holidays - UK - April 2017

                                                                                                                    US $2,672.70 (Excl.Tax)