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Package vs Independent Holidays - UK - May 2011

Mintel defines a package holiday in conjunction with the International Passenger Survey (IPS) as an ‘advertised inclusive tour or package holiday’. It is a holiday in which a return fare and accommodation are purchased from one provider, well-known examples of which in the UK include Thomas Cook, First Choice, Monarch Holidays and Thompson. 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).

An adult, for the purposes of Mintel’s research, is anyone aged 16 or over.

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

  • tourism is any travel, which involves an 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.
  • a long holiday is a holiday of four nights or more away from home; a short break is a holiday that involves one to three nights away from home.
  • short-haul refers to air holidays within Europe, dominated by flights to Mediterranean resorts but including the Canary Islands, which are treated as a part of the Spanish market. Long-haul, therefore, refers to holidays outside Europe.
  • an inclusive tour, or 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).
  • Seator flight-only is a type of independent holiday, and the terms are used to denote holidays in which travellers only purchase a return fare and thereafter book their own accommodation, car hire etc.

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 1: Package holidays market volume size and forecast 2005-15
              • Figure 2: Independent Holidays market volume size and forecast 2005-15
            • Impact of recession
              • All-inclusive boost
                • Squeeze to continue
                  • Market factors
                    • Overseas holidays hit hardest
                      • AB/C2 growth boosts potential demand
                        • Pound recovery could stimulate overseas holidays
                          • Companies, brands and innovation
                            • Higher margin strategy
                              • First Choice goes all-inclusive
                                • Independent share grows
                                  • easyjet’s challenge to ‘big two’
                                    • Rebranding Benidorm
                                      • The consumer
                                        • Figure 3: Overseas holidays taken in the last 12 months, April 2011
                                      • Package penetration half that of independent
                                        • C2DE package enthusiasm
                                          • Independent holidays rise sharply with income
                                            • Figure 4: Attitudes towards package holidays, April 2011
                                          • Time-saving advantages
                                            • Financial protection a live issue
                                              • Too samey, too many Brits
                                                • Figure 5: Attitudes towards independent holidays, April 2011
                                              • Freedom, flexibility, choice
                                                • Direct booking preferred
                                                  • Independent hassles
                                                    • What we think
                                                    • Issues in the Market

                                                        • The package share of the overall holiday market has increased for the first time in over a decade. Could this herald a revival?
                                                          • What are the implications of the government’s proposed ATOL (financial protection) reforms for the travel trade and the consumer?
                                                            • What effect is the growth of all-inclusive package holidays likely to have on the market?
                                                              • In what product areas can package holidays avoid competition from independent travel?
                                                                • How can package and independent holidays benefit from growth in the retired population over the next few years?
                                                                • Future Opportunities

                                                                    • Trend: Life Coaching
                                                                      • Trend: Evolving Media
                                                                      • Internal Market Environment

                                                                        • Key points
                                                                          • Market conditions still weak
                                                                            • Figure 6: Domestic and overseas holiday volume, 2005-10
                                                                            • Figure 7: Domestic and overseas holidays expenditure, 2005-10
                                                                          • Mixed fortunes
                                                                            • Figure 8: Scheduled passengers carried by main low-cost airlines, 2006-10
                                                                            • Figure 9: comparison of passenger growth across selected uk airlines 2008-10
                                                                          • Price of failure
                                                                            • Figure 10: ATOL tour operator failures/closures in the UK in the year to 1 may 2011
                                                                          • Flight-plus changes
                                                                            • Holiday costs fall in Spain
                                                                              • Figure 11: Holiday resort costs 2011
                                                                          • Broader Market Environment

                                                                            • Key points
                                                                              • Confidence low as incomes fall
                                                                                • Figure 12: GDP quarterly percentage change, Q1 2004-Q1 2011
                                                                                • Figure 13: UK consumer confidence index, May 2010-April 2011
                                                                              • Growth in families with kids 5-9
                                                                                • Figure 14: Trends in the age structure of the UK population, 2005-15
                                                                                • Figure 15: Forecast adult population trends, by lifestage, 2005-15
                                                                              • AB/C2 polarity
                                                                                • Figure 16: Forecast adult population trends, by socio-economic group, 2005-15
                                                                              • Oil on troubled waters
                                                                                • Figure 17: Crude oil prices, 2005-11
                                                                              • Pound stays weak
                                                                                • Figure 18: Annual average exchange rates for sterling, 2007-11
                                                                            • Competitive Context

                                                                              • Key points
                                                                                • Holidays hit hardest
                                                                                  • Figure 19: Market size trends 2005-10, for selected activities, 2005-10
                                                                                • Downsized treats
                                                                                  • Figure 20: Trends in what extra money is spent on November 2009-February 2011
                                                                              • Strengths and Weaknesses in the Market

                                                                                  • Strengths
                                                                                    • Safety first
                                                                                      • Unfamiliar suits packages
                                                                                        • Hassle free
                                                                                          • All-inclusive growth
                                                                                            • Independent freedoms
                                                                                              • Weaknesses
                                                                                                • Consumer spending power remains weak
                                                                                                  • Cookie-cutter packages
                                                                                                    • Packages considered too expensive
                                                                                                      • Travel trade independent doubts
                                                                                                        • Travel information overload
                                                                                                        • Who’s Innovating?

                                                                                                          • Key points
                                                                                                            • 100% all-inclusive
                                                                                                              • Easy challenge
                                                                                                                • Halal Holidays
                                                                                                                  • Costa del Cool
                                                                                                                    • Smart thinking
                                                                                                                    • Market Size and Forecast

                                                                                                                      • Key points
                                                                                                                        • Past and present
                                                                                                                          • Figure 21: Volume of overseas package and independent holidays 2005-15
                                                                                                                          • Figure 22: Expenditure on overseas package and independent holidays 2005-15*
                                                                                                                          • Figure 23: Average expenditure on overseas package and independent holidays 2005-10*
                                                                                                                        • The Future
                                                                                                                          • Figure 24: Package holidays market volume size and forecast 2005-15
                                                                                                                          • Figure 25: Package holidays market value size and forecast 2005-15*
                                                                                                                          • Figure 26: Independent holidays market volume size and forecast 2005-15
                                                                                                                          • Figure 27: Independent holidays market value size and forecast 2005-15*
                                                                                                                        • Forecast methodology
                                                                                                                        • Segment Performance

                                                                                                                          • Key points
                                                                                                                            • Package strengths beyond Europe
                                                                                                                              • Figure 28: Overseas package and independent holidays by region, 2005-10
                                                                                                                            • Turkey triumphs
                                                                                                                              • Figure 29: Top 10 package holiday short-haul destinations by number of visits, 2005-10
                                                                                                                            • Mexican wave
                                                                                                                              • Figure 30: Top 10 Package holiday long haul destinations, by number of visits, 2005-10
                                                                                                                            • Shorter holidays
                                                                                                                              • Figure 31: Average overseas package and independent holiday duration, 2005-09
                                                                                                                            • Package costs outweigh independent
                                                                                                                              • Figure 32: Total amount spent on holidays* (for self and family) in the last 12 months (excluding spending money), 2010
                                                                                                                              • Figure 33: Total amount spent on short breaks* (for self and family) in the last 12 months (excluding spending money), 2010
                                                                                                                            • Time away
                                                                                                                              • Figure 34: Time spent away on holidays/short breaks in the last 12 months, 2010
                                                                                                                            • Accommodation differences
                                                                                                                              • Figure 35: Accommodation for holidays/short breaks taken in the last 12 months, 2010
                                                                                                                            • Independent diversity
                                                                                                                              • Figure 36: Types of holidays/short breaks taken in the last 12 months, 2010
                                                                                                                          • Market Share

                                                                                                                            • Key points
                                                                                                                              • Figure 37: UK tour operators ranked by atol passenger licenses, May 2011
                                                                                                                            • Bricks & clicks for big two
                                                                                                                              • Figure 38: Most visited UK travel websites, 23 March 2011
                                                                                                                          • Companies and Products

                                                                                                                              • Cosmos/Monarch
                                                                                                                                  • Figure 39: Key financials for Cosmos Holidays PIc, 2008-09
                                                                                                                                • Expedia
                                                                                                                                  • Figure 40: Key financials for Expedia.com Limited UK, 2008-09
                                                                                                                                • Lastminute.com
                                                                                                                                  • Olympic Holidays (Travelworld Vacations Ltd)
                                                                                                                                    • Saga Holidays
                                                                                                                                        • Figure 41: Key financials for Acromas Holidays Limited, 2009-10
                                                                                                                                      • Thomas Cook
                                                                                                                                          • Figure 42: Key financials for Thomas Cook Group Plc – UK & Ireland, India and Middle East segment, 2009-10
                                                                                                                                        • Travelrepublic.co.uk
                                                                                                                                            • Figure 43: Key financials for Travel Republic Limited, 2009-10
                                                                                                                                          • TripAdvisor
                                                                                                                                              • Figure 44: Key financials for TripAdvisor Limited, 2009
                                                                                                                                            • TUI
                                                                                                                                                • Figure 45: Key financials for TUI Plc – UK & Ireland market, 2009-10
                                                                                                                                              • Virgin Holidays
                                                                                                                                                  • Figure 46: Key financials for Virgin Holidays Limited, 2009-10
                                                                                                                                              • Channels to Market

                                                                                                                                                • Key points
                                                                                                                                                  • Viral independents
                                                                                                                                                    • Figure 47: Research sources used for holidays/short breaks taken in the last 12 months
                                                                                                                                                  • High street resilience
                                                                                                                                                    • Figure 48: Booking methods used for holidays/short breaks taken in the last 12 months
                                                                                                                                                • Holidays Taken

                                                                                                                                                  • Key points
                                                                                                                                                    • Figure 49: Holidays taken in the last 12 months, April 2011
                                                                                                                                                  • Cross-class package appeal
                                                                                                                                                  • Important Holiday Factors

                                                                                                                                                    • Key points
                                                                                                                                                        • Figure 50: Important holiday factors, April 2011
                                                                                                                                                      • We’re all gastro-tourists now
                                                                                                                                                        • Package versus independent holiday factors
                                                                                                                                                          • Flavour of the destination
                                                                                                                                                            • City excites under-35s and over-55s
                                                                                                                                                              • Female bookworms
                                                                                                                                                              • Attitudes Towards Package Holidays

                                                                                                                                                                • Key points
                                                                                                                                                                    • Figure 51: Attitudes towards package holidays, April 2011
                                                                                                                                                                  • Life in the old package
                                                                                                                                                                    • Same old, same old
                                                                                                                                                                      • Different class
                                                                                                                                                                        • Figure 52: Attitudes towards package holidays by socio-economic group, April 2011
                                                                                                                                                                      • Family concern
                                                                                                                                                                        • Inclusive and tailor-made packages
                                                                                                                                                                        • Attitudes Towards Independent Holidays

                                                                                                                                                                          • Key points
                                                                                                                                                                              • Figure 53: Attitudes towards independent holidays, April 2011
                                                                                                                                                                            • Road to freedom
                                                                                                                                                                              • Information overload
                                                                                                                                                                                • Independent ethics
                                                                                                                                                                                  • Aviation-avoiders
                                                                                                                                                                                  • Targeting Opportunities

                                                                                                                                                                                    • Key points
                                                                                                                                                                                      • Target groups
                                                                                                                                                                                        • Figure 54: Package versus independent holidays target groups, May 2011
                                                                                                                                                                                      • Package Lovers
                                                                                                                                                                                        • Demographic profile
                                                                                                                                                                                          • Marketing message
                                                                                                                                                                                            • Independently Minded
                                                                                                                                                                                              • Demographic profile
                                                                                                                                                                                                • Marketing message
                                                                                                                                                                                                  • Independent With Doubts
                                                                                                                                                                                                    • Demographic profile
                                                                                                                                                                                                      • Marketing message
                                                                                                                                                                                                        • Indifferent
                                                                                                                                                                                                          • Demographic profile
                                                                                                                                                                                                            • Marketing message
                                                                                                                                                                                                            • Appendix – Holidays Taken

                                                                                                                                                                                                                • Figure 55: Most popular holidays taken in the last 12 months, by demographics, April 2011
                                                                                                                                                                                                                • Figure 56: Next most popular holidays taken in the last 12 months by demographics, April 2011
                                                                                                                                                                                                                • Figure 57: Other holidays taken in the last 12 months by demographics, April 2011
                                                                                                                                                                                                            • Appendix – Important Holiday Factors

                                                                                                                                                                                                                • Figure 58: Important holiday factors, by most popular holidays taken in the last 12 months, April 2011
                                                                                                                                                                                                                • Figure 59: Important holiday factors, by next most popular holidays taken in the last 12 months, April 2011
                                                                                                                                                                                                                • Figure 60: Important holiday factors by other holidays, taken in the last 12 months, April 2011
                                                                                                                                                                                                                • Figure 61: Most popular important holiday factors, by demographics, April 2011
                                                                                                                                                                                                                • Figure 62: Next most popular important holiday factors by demographics, April 2011
                                                                                                                                                                                                                • Figure 63: Other important holiday factors, by demographics, April 2011
                                                                                                                                                                                                                • Figure 64: Least popular important holiday factors, by demographics, April 2011
                                                                                                                                                                                                            • Appendix – Attitudes Towards Package Holidays

                                                                                                                                                                                                                • Figure 65: Attitudes towards package holidays, by most popular holidays taken in the last 12 months, April 2011
                                                                                                                                                                                                                • Figure 66: Attitudes towards package holidays by next most popular holidays taken in the last 12 months, April 2011
                                                                                                                                                                                                                • Figure 67: Attitudes towards package holidays, by other holidays taken in the last 12 months, April 2011
                                                                                                                                                                                                                • Figure 68: Attitudes towards package holidays, by most popular important holiday factors, April 2011
                                                                                                                                                                                                                • Figure 69: Attitudes towards package holidays, by next most popular important holiday factors, April 2011
                                                                                                                                                                                                                • Figure 70: Attitudes towards package holidays, by other important holiday factors, April 2011
                                                                                                                                                                                                                • Figure 71: Attitudes towards package holidays, by least popular important holiday factors, April 2011
                                                                                                                                                                                                                • Figure 72: Attitudes towards package holidays, by demographics, April 2011
                                                                                                                                                                                                                • Figure 73: Further attitudes towards package holidays, by demographics, April 2011
                                                                                                                                                                                                                • Figure 74: Further attitudes (continued) to package holidays by demographics, April 2011
                                                                                                                                                                                                            • Appendix – Attitudes Towards Independent Holidays

                                                                                                                                                                                                                • Figure 75: Attitudes towards independent holidays, by most popular holidays taken in the last 12 months, April 2011
                                                                                                                                                                                                                • Figure 76: Attitudes towards independent holidays, by next most popular holidays taken in the last 12 months, April 2011
                                                                                                                                                                                                                • Figure 77: Attitudes towards independent holidays, by other holidays taken in the last 12 months, April 2011
                                                                                                                                                                                                                • Figure 78: Attitudes towards independent holidays, by most popular important holiday factors, April 2011
                                                                                                                                                                                                                • Figure 79: Attitudes to independent holidays by next most popular important holiday factors, April 2011
                                                                                                                                                                                                                • Figure 80: Attitudes to independent holidays by other important holiday factors, April 2011
                                                                                                                                                                                                                • Figure 81: Attitudes to independent holidays by least popular important holiday factors, April 2011
                                                                                                                                                                                                                • Figure 82: Attitudes towards independent holidays, by demographics, April 2011
                                                                                                                                                                                                                • Figure 83: Further attitudes towards independent holidays, by demographics, April 2011
                                                                                                                                                                                                                • Figure 84: Further attitudes (continued) towards independent holidays, by demographics, April 2011
                                                                                                                                                                                                            • Appendix – Targeting Opportunities

                                                                                                                                                                                                                • Figure 85: Holidays taken in the last 12 months, by target groups, April 2011
                                                                                                                                                                                                                • Figure 86: Important holiday factors, by target groups, April 2011
                                                                                                                                                                                                                • Figure 87: Attitudes towards package holidays, by target groups, April 2011
                                                                                                                                                                                                                • Figure 88: Attitudes towards independent holidays, by target groups, April 2011
                                                                                                                                                                                                                • Figure 89: Target groups, by demographics, April 2011

                                                                                                                                                                                                            Companies Covered

                                                                                                                                                                                                            • Acromas Holdings
                                                                                                                                                                                                            • Air Travel Organisers' Licensing (ATOL)
                                                                                                                                                                                                            • Civil Aviation Authority
                                                                                                                                                                                                            • Expedia.co.uk
                                                                                                                                                                                                            • First Choice Holidays & Flights Ltd
                                                                                                                                                                                                            • Gold Medal Travel Group PLC
                                                                                                                                                                                                            • Hotelopia
                                                                                                                                                                                                            • InterContinental Hotels Group PLC
                                                                                                                                                                                                            • Jet2Holidays Ltd
                                                                                                                                                                                                            • lastminute.com plc
                                                                                                                                                                                                            • Laterooms Ltd
                                                                                                                                                                                                            • LM Travel Services Ltd
                                                                                                                                                                                                            • Monarch Airlines
                                                                                                                                                                                                            • Monarch Travel Group
                                                                                                                                                                                                            • Opodo Limited
                                                                                                                                                                                                            • Passenger Shipping Association [PSA]
                                                                                                                                                                                                            • Saga Holidays
                                                                                                                                                                                                            • Simply Travel
                                                                                                                                                                                                            • Southall Travel Group
                                                                                                                                                                                                            • The Airline Seat Company Ltd
                                                                                                                                                                                                            • Thomas Cook Group PLC
                                                                                                                                                                                                            • Thomson Holidays
                                                                                                                                                                                                            • Titan Travel
                                                                                                                                                                                                            • Trailfinders Travel
                                                                                                                                                                                                            • Travelocity.com L.P.
                                                                                                                                                                                                            • Travelodge
                                                                                                                                                                                                            • Travelworld Vacations Ltd
                                                                                                                                                                                                            • Travelzoo (Europe) Ltd
                                                                                                                                                                                                            • TUI UK
                                                                                                                                                                                                            • Virgin Holidays

                                                                                                                                                                                                            Package vs Independent Holidays - UK - May 2011

                                                                                                                                                                                                            £1,995.00 (Excl.Tax)