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The Premium vs Budget Traveller - UK - February 2015

“A falling oil price and strong Pound should generate freer spending on short-haul holidays in general. These factors are also likely to act as a further incentive for ‘mix and match’ or ‘hybrid’ travel behaviour – travellers who seek to economise as much as possible on the transport component of their holiday in order to trade up and spend more on accommodation or in the destination itself.”
– John Worthington, Senior Analyst

This report answers the following questions:

  • What is the likely impact of falling oil prices and a stronger Pound on holiday spending patterns?
  • How do spending patterns differ between package and independent holidaymakers and what are the implications for the travel and tourism industry?

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Overseas going up, domestic going down
                • Figure 1: Domestic and overseas holiday volume, 2008-14
                • Figure 2: Domestic and overseas holiday expenditure, 2008-14
              • Market factors
                • Macro-economic factors favour overseas revival
                  • Figure 3: UK average weekly earnings (excl bonuses)* vs CPI inflation, percentage change year-on-year, January 2013-december 2014
                  • Figure 4: European Brent Crude Oil Spot Price (US$ per barrel), January 2014-January 2015*
                  • Figure 5: Sterling exchange rate versus euro and US$, annual averages, 2009-14, and spot rate January 2015
                • Companies, brands and innovation
                  • Budget long-haul and ultra-luxury
                    • Experiential luxury
                      • Hybrid Traveller
                        • ‘Affordable luxury’
                          • Sun enters online deals space
                            • The consumer
                              • Upmarket package
                                • Figure 6: Approaches to spending on package holidays abroad, November 2014
                              • Independent jugglers
                                • Figure 7: Approaches to spending on independent holidays abroad, November 2014
                              • Domestic sector has broadest spending patterns
                                • Figure 8: Approaches to spending on UK accommodation, November 2014
                              • Save on fares, splurge in destination
                                • Figure 9: Selected attitudes towards holiday spending, November 2014
                              • What we think
                              • Issues and Insights

                                  • What is the likely impact of falling oil prices and a stronger Pound on holiday spending patterns?
                                    • The facts
                                      • The implications
                                        • How do spending patterns differ between package and independent holidaymakers and what are the implications for the travel and tourism industry?
                                          • The facts
                                            • The implications
                                            • Trend Application

                                                • Trend: Minimize Me
                                                  • Trend: Slow It All Down
                                                    • Trend: Let’s Make a Deal
                                                    • Market Drivers

                                                      • Key points
                                                        • Consumers beginning to feel better off
                                                          • Figure 10: GfK/NOP Consumer Confidence Index, January 2013 - December 2014
                                                          • Figure 11: UK average weekly earnings (excl bonuses)* vs CPI inflation, percentage change year-on-year, January 2013-december 2014
                                                        • Oil price crash likely to boost travel abroad
                                                          • Figure 12: European Brent Crude Oil Spot Price (US$ per barrel), January 2014-January 2015*
                                                        • Pound reaches seven-year high against euro
                                                          • Figure 13: Sterling exchange rate versus selected currencies, annual averages, 2009-14, and spot rate January 2015
                                                        • End of staycation?
                                                          • Figure 14: holidays, volume, expenditure and average price, 2008-14
                                                        • Highest spending age groups
                                                          • Figure 15: Overseas holidays, expenditure per day*, by age and gender, 2013
                                                          • Figure 16: Domestic holidays, expenditure per day*, by age, 2013
                                                        • High spending short breakers
                                                          • Figure 17: Overseas holidays, expenditure per day*, by holiday duration, 2013
                                                          • Figure 18: Domestic holidays, expenditure per day*, by holiday duration, 2013
                                                        • Premium versus budget destinations
                                                          • Figure 19: Overseas holidays, number of visits, number of nights, expenditure and spend per night*, by destination, 2013
                                                      • Innovation and Trends

                                                        • Key points
                                                          • The hybrid traveller
                                                            • The luxury traveller
                                                              • ‘Affordable luxury’
                                                                • Premiumisation of traditional holidays
                                                                  • Deal hunters
                                                                    • Low income holidays
                                                                    • The Consumer – Holiday Taking

                                                                      • Key points
                                                                        • Who goes where?
                                                                          • Figure 20: Destinations visited on holiday in the past 12 months, November 2014
                                                                          • Figure 21: Destinations visited on holiday in the past 12 months, by socio-economic group, November 2014
                                                                          • Figure 22: Destinations visited on holiday in the past 12 months, by household income, November 2014
                                                                          • Figure 23: Destinations visited on holiday in the past 12 months, by age group, November 2014
                                                                        • The multiple holidaymaker
                                                                          • Figure 24: Single versus multiple holiday-taking in the past 12 months, by destination, November 2014
                                                                        • How holidays are booked
                                                                          • Figure 25: Booking profile of overseas and domestic holidays taken in the past 12 months, November 2014
                                                                      • The Consumer – Holiday Types

                                                                        • Key points
                                                                          • Beach and city are neck and neck
                                                                            • Figure 26: Types of holiday taken in the past 12 months, November 2014
                                                                            • Figure 27: Types of holiday taken in the past 12 months, by destination*, November 2014
                                                                          • Who takes which type of holiday?
                                                                          • The Consumer – Holiday Spending: Transport, Accommodation & Car Hire

                                                                            • Key points
                                                                              • Overall spending patterns
                                                                                • Figure 28: Approaches to holiday spending, November 2014
                                                                              • Package holidaymakers abroad
                                                                                • Figure 29: Approaches to spending on package holidays abroad, November 2014
                                                                              • Independent holidaymakers abroad
                                                                                • Figure 30: Approaches to spending on transport for holidays in Europe, November 2014
                                                                                • Figure 31: Approaches to spending on transport for holidays outside Europe, November 2014
                                                                                • Figure 32: Approaches to spending on accommodation abroad, November 2014
                                                                              • UK domestic holidaymakers
                                                                                • Figure 33: Approaches to spending on UK accommodation, November 2014
                                                                              • Single versus multiple holidaymakers
                                                                                • Figure 34: Approaches to holiday spending, single versus multiple holidaymakers per destination, November 2014
                                                                              • Demographics of spending patterns
                                                                                • Package holidays
                                                                                  • Independent holidays abroad: short-haul transport
                                                                                    • Figure 35: Approaches to spending on transport for holidays in Europe, by gender, November 2014
                                                                                    • Figure 36: Approaches to spending on transport for holidays in Europe, family versus non-family, November 2014
                                                                                  • Independent holidays abroad: long-haul transport
                                                                                      • Figure 37: Approaches to spending on transport for holidays outside Europe, family versus non-family, November 2014
                                                                                    • Independent holidays abroad: accommodation
                                                                                      • UK holidays: accommodation
                                                                                        • Summary
                                                                                          • Figure 38: Approaches to holiday spending, by age group, November 2014
                                                                                        • Spending approaches by holiday type
                                                                                          • The hybrid traveller: Mintel’s mix & match groups
                                                                                              • Figure 39: demographic profiles of all independent holidaymakers abroad, versus ‘mix and match short-haul’ group and ‘mix and match long-haul’ group, November 2014
                                                                                              • Figure 40: Holiday types taken in the past 12 months by all independent holidaymakers abroad, mix and match short-haul’ group and mix and match long-haul group, November 2014
                                                                                            • Mintel’s qualitative panel
                                                                                              • Holiday car hire spending
                                                                                                • Figure 41: Approaches to spending on holiday car hire, November 2014
                                                                                            • The Consumer – Other Holiday Spending

                                                                                              • Key points
                                                                                                • Travellers prioritise spend on eating out
                                                                                                  • Figure 42: Approaches to other holiday spending, November 2014
                                                                                                • Holiday shoppers
                                                                                                    • Figure 43: Approaches to other holiday spending, by type of holiday booking, November 2014
                                                                                                • The Consumer – Attitudes towards Holiday Spending

                                                                                                  • Key points
                                                                                                    • Premium spending attitudes
                                                                                                      • Figure 44: Attitudes towards holiday spending, November 2014
                                                                                                    • Budget spending attitudes
                                                                                                      • The hybrid holidaymaker (continued)
                                                                                                        • Premium versus Budget
                                                                                                            • Figure 45: Preference for longer budget versus shorter luxury holidays, by socio-economic group, November 2014
                                                                                                          • Package more premium-oriented than independent travel
                                                                                                            • Figure 46: Attitudes towards holiday spending, by type of holiday booking, November 2014

                                                                                                        Companies Covered

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

                                                                                                        The Premium vs Budget Traveller - UK - February 2015

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