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Holiday Review - UK - January 2018

“Rising inflation, more expensive oil, and a fluctuating Pound will weigh on consumers’ spending power in 2018. We expect to see a slight reduction in the growth of overseas trips as some consumers opt for staycations instead of short breaks during the low seasons. We could also see more consumers opt for all-inclusive deals for their main summer break, to help them monitor their spending.”
– Fergal McGivney, Travel Analyst

This Report looks at the following areas:

  • Holidaymakers could cut back on short city breaks in 2018
  • Will all-inclusive holiday products prove more popular in 2018? 
  • How are holidaymakers paying for their trips?
  • The majority of 25-34s feel that Brexit will make it more difficult to holiday overseas

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Table of contents

  1. Overview

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

          • The market
            • Slowdown in growth expected over the next few years
              • Figure 1: Forecast of total holiday market volume, 2012-22
            • Bright outlook for the domestic market
              • Figure 2: Forecast of domestic holiday market volume, 2012-22
            • Overseas volume finally surpasses a milestone but a slowdown is expected
              • Figure 3: Forecast of overseas holiday market volume, 2012-22
            • The consumer
              • A greater proportion of UK residents took a holiday in 2017
                  • Figure 4: Destinations visited, November 2016 and December 2017
                • A reduction in city breaks on the cards?
                  • Figure 5: Type of holidays taken, December 2017
                • How much was spent on consumers’ most expensive holidays?
                  • Figure 6: Holiday spending, December 2017
                • All-inclusive products could prove popular as consumers look to manage their money
                  • Figure 7: How most expensive holiday was booked – Package versus independent bookings, December 2017
                • Most holidaymakers save and pay in one go
                    • Figure 8: How most expensive holiday was booked, December 2017
                  • Consumers keen on holidays but will seek out cheaper destinations
                    • Figure 9: Future plans for holidays, 2015-17
                  • Long-haul versus short-haul holidays in 2018
                      • Figure 10: Long-haul vs short-haul, December 2017
                    • How are Brexit and the Open Skies Agreement affecting holidaymakers?
                      • Figure 11: Holiday behaviours – Brexit, December 2017
                    • What we think
                    • Issues and Insights

                      • Holidaymakers could cut back on short city breaks in 2018
                        • The facts
                          • The implications
                            • Will all-inclusive holiday products prove more popular in 2018?
                              • The facts
                                • The implications
                                  • How are holidaymakers paying for their trips?
                                    • The facts
                                      • The implications
                                        • The majority of 25-34s feel that Brexit will make it more difficult to holiday overseas
                                          • The facts
                                            • The implications
                                            • The Market – What You Need to Know

                                              • 2017 was a good year for domestic travel
                                                • A possible return to staycations on the horizon
                                                  • Slower growth, but overseas volume surpassed a milestone
                                                    • Many will likely cut back on overseas short breaks in the low seasons
                                                      • Inbound visits to the UK rise as the Pound remains low
                                                        • Seniors are the most positive about their finances; likely to boost cruises
                                                        • Market Size and Forecast

                                                          • Slowdown in growth expected over the next few years
                                                            • Figure 12: Total holiday market volume and value*, 2012-22
                                                            • Figure 13: Forecast of total holiday market volume, 2012-22
                                                            • Figure 14: Forecast of total holiday market value*, 2012-22
                                                          • The domestic market; a return to staycations on the horizon?
                                                              • Figure 15: Domestic holiday market volume and value* forecast, 2012-22
                                                              • Figure 16: Forecast of domestic holiday market volume, 2012-22
                                                              • Figure 17: Forecast of domestic holiday market value*, 2012-22
                                                            • Overseas volume finally surpasses a milestone but a slowdown is expected
                                                              • Figure 18: Overseas holiday market volume and value*, 2012-22
                                                              • Figure 19: Forecast of overseas holiday market volume, 2012-22
                                                              • Figure 20: Forecast of overseas holiday market value*, 2012-22
                                                          • Market Segmentation

                                                            • Inbound visits to the UK rise as the Pound remains low
                                                                • Figure 21: Inbound holiday volume from overseas residents to the UK, 2012-18
                                                              • Top 10 destinations for UK visitors going abroad
                                                                • Figure 22: Top 10 countries, 2015 versus 2016
                                                                • Figure 23: Top 10 countries, H1 2016 versus H1 2017
                                                              • All-inclusive deals could prove popular as consumers look to monitor their spending
                                                                • Figure 24: UK overseas volume, package and independent holidays, 2012-17
                                                              • Airlines: passenger growth forecast to slow over the next few years
                                                                  • Figure 25: Passenger numbers uplifted at UK airports, 2012-22
                                                              • Market Drivers

                                                                • Inflation curbs spending power
                                                                  • Figure 26: How consumers would describe their financial situation, November 2017
                                                                  • Figure 27: Trends in consumer sentiment for the coming year, by age, November 2017
                                                                • Despite some concerns over finances, consumers still plan to book holidays
                                                                  • Figure 28: Plans to book a holiday in the next 3 months, June 2012-December 2017
                                                                • Oil prices are rising which could limit cheap airfare offers
                                                                  • Figure 29: Europe Brent Spot Price FOB* (Dollars per Barrel), January 2014-18
                                                                  • Figure 30: US Gulf Coast Kerosene-Type Jet Fuel Spot Price FOB (Dollars per gallon), January 2014-18
                                                                • The weak Pound makes holidaying overseas more expensive
                                                                  • Figure 31: Pound versus euro and US Dollar, April 2016-January 2018
                                                              • Launch Activity and Innovation

                                                                • Low-cost long-haul airlines
                                                                  • New app from Heritage Cities Group leverages the latest in augmented reality
                                                                    • Travelodge launches its premium economy SuperRooms
                                                                      • Hotelplan and Google partner to offer packages
                                                                        • Airbnb incorporates restaurant bookings
                                                                          • One-click payments can help boost chatbots
                                                                            • Lufthansa flight information is now searchable via Google Home
                                                                              • Snap’s new ad targeting
                                                                                • Skurt – An Uber-style car rental app that supplies fleet cars on demand
                                                                                • The Consumer – What You Need to Know

                                                                                  • A greater proportion of UK residents took a holiday in 2017
                                                                                    • A reduction in city breaks on the cards?
                                                                                      • How much was spent on consumers’ most expensive holidays?
                                                                                        • All-inclusive products could prove popular as consumers look to manage their money
                                                                                          • How holidaymakers pay; credit card users tend to be older
                                                                                            • Consumers keen on holidays but will seek out cheaper destinations
                                                                                              • Attitudes towards Brexit and holidays
                                                                                              • Destinations Visited

                                                                                                • A greater proportion of UK residents took a holiday in 2017
                                                                                                    • Figure 32: Destinations visited, November 2016 and December 2017
                                                                                                  • Who is taking holidays? A look at demographics
                                                                                                    • Figure 33: Destinations visited, by age, December 2017
                                                                                                  • Regional holiday habits
                                                                                                      • Figure 34: Destinations visited, by region, December 2017
                                                                                                      • Figure 35: Destinations visited, by socio-economic group, December 2017
                                                                                                    • The importance of family holidays for domestic tourism
                                                                                                      • Figure 36: Destinations visited, by presence of children, December 2017
                                                                                                    • Spain and Portugal see strong growth in UK visitors
                                                                                                      • Figure 37: Destinations visited, by country, November 2016 and December 2017
                                                                                                      • Figure 38: Overseas visits by UK residents, H1* 2016 versus H1 2017
                                                                                                    • 25-34s far more likely than over-35s to visit France
                                                                                                        • Figure 39: Destinations visited, by age, December 2017
                                                                                                    • Types of Holidays Taken

                                                                                                      • A reduction in city breaks on the cards?
                                                                                                        • Figure 40: Type of holidays taken, December 2017
                                                                                                        • Figure 41: Type of holidays taken, by age, December 2017
                                                                                                      • Beach holiday market should remain stable
                                                                                                        • A focus on authenticity and what this means
                                                                                                          • Figure 42: Type of holidays taken, by age, December 2017
                                                                                                        • Cruise likely to weather any economic storms
                                                                                                          • Growth in domestic tourism could boost the camping and caravanning market
                                                                                                            • Figure 43: Type of holidays taken, by presence of children, December 2017
                                                                                                        • Holiday Spending

                                                                                                          • How much was spent on consumers’ most expensive holidays?
                                                                                                            • Figure 44: Holiday spending, 2016 and 2017
                                                                                                          • Holiday spending – A look at demographics
                                                                                                            • Figure 45: Holiday spending, by presence of children, December 2017
                                                                                                            • Figure 46: Holiday spending, by age, December 2017
                                                                                                          • Even affluent consumers are feeling the squeeze
                                                                                                            • Figure 47: Holiday spending, by socio-economic group, December 2017
                                                                                                        • Package versus Independent Bookings

                                                                                                          • 45% of holidaymakers booked independently
                                                                                                            • Figure 48: How most expensive holiday was booked – Package versus independent bookings, December 2017
                                                                                                          • All-inclusive products could prove popular as consumers look to manage their money
                                                                                                            • Added expense for agents with the banning of card charges
                                                                                                            • Holiday Payments

                                                                                                              • Most holidaymakers save and pay in one go
                                                                                                                  • Figure 49: How most expensive holiday was booked, December 2017
                                                                                                                • Holidaymakers who save and pay in one go
                                                                                                                  • Figure 50: How most expensive holiday was booked, by presence of children, December 2017
                                                                                                                • Credit card users tend to be older
                                                                                                                    • Figure 51: How most expensive holiday was booked, by age, December 2017
                                                                                                                    • Figure 52: How most expensive holiday was booked, by socio-economic group, December 2017
                                                                                                                  • Where do cryptocurrencies fit into the travel market?
                                                                                                                  • Future Plans for Holidays

                                                                                                                    • Consumers keen on holidays but will seek out cheaper destinations
                                                                                                                      • Figure 53: Future plans for holidays, 2015-17
                                                                                                                    • As are naturally the most likely to spend but even they are not immune to economic pressures
                                                                                                                      • Figure 54: Future plans for holidays, by age, December 2017
                                                                                                                      • Figure 55: Future plans for holidays, by socio-economic group, December 2017
                                                                                                                    • Airbnb could prove a cost-saving option for families
                                                                                                                      • Figure 56: Future holiday plans, by presence of children, December 2017
                                                                                                                    • Long-haul versus short-haul tips in 2018
                                                                                                                      • Figure 57: Long-haul versus short-haul holidays, by volume, 2013-17
                                                                                                                      • Figure 58: Long-haul vs short-haul, December 2017
                                                                                                                    • Over-55s are important targets for the domestic market while younger consumers are more likely to travel long-haul
                                                                                                                      • Figure 59: Long-haul vs short-haul, by age, December 2017
                                                                                                                  • Holiday Behaviours

                                                                                                                    • How are Brexit and the Open Skies Agreement affecting holidaymakers?
                                                                                                                      • Figure 60: Holiday behaviours – Brexit, December 2017
                                                                                                                    • The majority of 25-34s feel that Brexit will make it more difficult to holiday overseas
                                                                                                                        • Figure 61: Holiday behaviours – Brexit, by age, December 2017
                                                                                                                      • The high-profile collapse of Monarch makes some consumers uneasy
                                                                                                                          • Figure 62: Holiday behaviours – Booking, December 2017
                                                                                                                        • The safety of major cities concerns almost half of holidaymakers
                                                                                                                          • Figure 63: Holiday behaviours, December 2017
                                                                                                                      • CHAID Analysis

                                                                                                                        • Methodology
                                                                                                                          • Parents of under-16s most likely to use a high street travel agent
                                                                                                                              • Figure 64: Target groups based on statements about holidaying – CHAID – Tree output, December 2017
                                                                                                                              • Figure 65: Target groups based on statements about holidaying – CHAID – Table output, December 2017
                                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                              • Abbreviations
                                                                                                                                • Consumer research methodology
                                                                                                                                  • Definitions
                                                                                                                                  • Appendix – Market Size and Forecast

                                                                                                                                    • Forecast methodology
                                                                                                                                        • Figure 66: Best- and worst-case forecast for total holiday volume, 2017-22
                                                                                                                                        • Figure 67: Best- and worst-case forecast for total holiday value, 2017-22
                                                                                                                                        • Figure 68: Best- and worst-case forecast for domestic volume, 2017-22
                                                                                                                                        • Figure 69: Best- and worst-case forecast for domestic value, 2017-22
                                                                                                                                        • Figure 70: Best- and worst-case forecast for overseas volume, 2017-22
                                                                                                                                        • Figure 71: Best- and worst-case forecast for overseas value, 2016-21

                                                                                                                                    Holiday Review - UK - January 2018

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