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Description

Description

“When travel restrictions are lifted many consumers will be eager to get away. However, social distancing measures and consumers’ concerns about their economic situation and their own/family’s physical wellbeing will significantly restrict the speed of the recovery. Rural areas and self-drive holidays will be in high demand when recovery starts, whilst the younger generation will be most likely to travel overseas. As a result, the independent sector is set to gain share from package holidays in the short and medium term.”

– Marloes de Vries, Senior Travel Analyst – 20 May 2020

This Report looks at the following areas:

  • The impact of COVID-19 on the package and independent holiday segments
  • How consumers’ holidaying preferences will change in the short, medium and long term
  • Interest in being able to customise elements of package holidays
  • Reasons for booking package vs independent holidays

What's included

What's included

Table of contents

Table of contents

  1. Overview

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

            • The market
              • Travel industry will face its steepest decline in history
                  • Figure 1: UK value* forecast of overseas package holidays (adjusted for COVID-19 on 20 May 2020), 2014-24
                  • Figure 2: UK value* forecast of overseas independent holidays (adjusted for COVID-19 on 20 May 2020), 2014-24
                • Low-cost destinations are likely to increase in appeal once travel restrictions are lifted
                  • Impact of COVID-19 on the UK package and independent holiday markets
                    • Figure 3: Expected impact of COVID-19 on the UK package and independent holiday markets, short, medium and long term, 20 May 2020
                  • Companies and brands
                    • easyJet Holidays has high growth potential once holidaying resumes
                      • British Airways trials autonomous wheelchairs
                        • Jet2 is expanding its vegan offering
                          • Wright Electric expects the entry of its electric aircraft in 2030
                            • The consumer
                              • Package versus independent split remains stable
                                • Figure 4: How people booked their ‘main holiday’ in the past 12 months, February 2016-February 2020
                              • Almost half of overseas main holidays booked independently
                                • COVID-19 poses threat for group holidays
                                  • Figure 5: How ‘main holiday’ types were booked in the past 12 months, February 2020
                                • Value for money remained leading motivation to book independently
                                  • Figure 6: Reasons for booking independent holidays, February 2018-February 2020
                                • Customisation may hinder convenience of booking package holidays, but it’s worth the risk
                                  • Figure 7: Reasons for booking package holidays, February 2018-February 2020
                                • Majority of travellers would like more options to personalise package holidays
                                  • Choosing hotel room location most preferred option when booking package holidays
                                    • Figure 8: Interest in customisable options when booking package holidays, February 2020
                                  • Travel agents play a key role in gaining customers’ trust
                                    • Figure 9: Attitudes towards travel agent shops, February 2020
                                  • What we think
                                  • Impact of COVID-19 on the Package and Independent Holiday Markets

                                    • Short, medium and long-term impact on the industry
                                      • Figure 10: Expected impact of COVID-19 on the UK package and independent holiday markets, short, medium and long term, 20 May 2020
                                    • Short term
                                      • Medium term
                                        • Long term
                                          • Opportunities and threats
                                            • Overseas holidays will be heavily disrupted even once the possibility returns
                                              • Consumers will expect brands to demonstrate action to protect travellers
                                                • Providing great customer service will help brands to recover quicker
                                                  • Social distancing measures provides advance selling opportunities
                                                    • New way of working provides opportunities to cater for working holidays
                                                      • Video conferencing will become a vital communication tool
                                                        • Impact on the market
                                                            • Figure 11: UK value* forecast of overseas package holidays (adjusted for COVID-19 on 20 May 2020), 2014-24**
                                                            • Figure 12: UK value* forecast of overseas independent holidays (adjusted for COVID-19 on 20 May 2020), 2014-24
                                                          • Shifts in consumer behaviour
                                                            • Travellers will look to avoid the crowds
                                                              • Figure 13: Interest in holiday types after travel restrictions are lifted, May 2020 (fieldwork dates: 30 April-12 May 2020)
                                                            • Staycations will be in high demand when market starts to recover
                                                              • Figure 14: Interest in booking options after travel restrictions are lifted, May 2020 (fieldwork dates: 30 April-12 May 2020)
                                                            • Family holidays will be prioritised
                                                              • Figure 15: Interest in travel party after travel restrictions are lifted, May 2020 (fieldwork dates: 30 April-12 May 2020)
                                                            • Impact on key consumer segments
                                                              • Younger generation will play a key role in recovery of tourism in urban areas
                                                                • Figure 16: Changes in interest of 16-34 year olds in holiday types and booking options after travel restrictions are lifted, positive vs negative (percentage points)*, May 2020 (fieldwork dates: 30 April-12 May 2020)
                                                              • All-inclusive holidays in beach resorts will continue to appeal to families with younger children
                                                                • Figure 17: Changes in interest of families in holiday types and booking options after travel restrictions are lifted, positive vs negative (percentage points)*, May 2020 (fieldwork dates: 30 April-12 May 2020)
                                                              • Over-55s likely to cut back on travel, stay closer to home or drive to neighbouring countries
                                                                • Figure 18: Changes in interest of over-55s in holiday types and booking options, positive vs negative (percentage points)*, May 2020 (fieldwork dates: 30 April-12 May 2020)
                                                              • How a COVID-19 recession will reshape the market
                                                                • Travellers will be more price-sensitive when booking holidays
                                                                  • Price of holidaying likely to rise in the medium term as a result of COVID-19
                                                                    • COVID-19: UK context
                                                                      • Economic and other assumptions
                                                                      • Issues and Insights

                                                                        • Travel agents have to adapt to the situation caused by COVID-19
                                                                          • The facts
                                                                            • The implications
                                                                              • Travel brands challenged to keep levels of trust high
                                                                                • The facts
                                                                                  • The implications
                                                                                  • The Market – What You Need to Know

                                                                                    • Strong demand for package holidays in 2019
                                                                                      • Travel industry will face its steepest decline in history
                                                                                        • Low-cost destinations are likely to increase in appeal once travel restrictions are lifted
                                                                                          • UK economy expected to contract as a result of COVID-19
                                                                                          • Market Size and Forecast – Overseas Holidays

                                                                                            • Strong demand for package holidays in 2019
                                                                                              • Figure 19: UK volume of overseas package and independent holidays, 2014-19
                                                                                            • Strong growth in the value of package holidays in 2019
                                                                                              • Figure 20: UK value* of overseas package and independent holidays, 2014-19
                                                                                            • Outlook in light of COVID-19
                                                                                              • Travel industry will face its steepest decline in history
                                                                                                  • Figure 21: UK volume forecast of overseas package holidays (adjusted for COVID-19 on 20 May 2020), 2014-24
                                                                                                  • Figure 22: UK volume forecast of overseas independent holidays (adjusted for COVID-19 on 20 May 2020), 2014-24
                                                                                                  • Figure 23: UK volume of overseas package and independent holidays (adjusted for COVID-19 on 20 May 2020), 2014-24*
                                                                                                  • Figure 24: UK value* forecast of overseas package holidays (adjusted for COVID-19 on 20 May 2020), 2014-24**
                                                                                                  • Figure 25: UK value* forecast of overseas independent holidays (adjusted for COVID-19 on 20 May 2020), 2014-24
                                                                                                  • Figure 26: UK value* of overseas package and independent holidays (adjusted for COVID-19 on 20 May 2020), 2014-24**
                                                                                                • Pre-COVID-19 forecast highlights the impact that the crisis will have
                                                                                                  • Package and independently booked holidays would have grown without COVID-19
                                                                                                    • Figure 27: UK volume of overseas package and independent holidays (pre-COVID-19 forecast), 2014-24
                                                                                                    • Figure 28: UK volume forecast of overseas package holidays (pre-COVID-19 forecast), 2014-24
                                                                                                    • Figure 29: UK volume forecast of overseas independent holidays (pre-COVID-19 forecast), 2014-24
                                                                                                    • Figure 30: UK value* of overseas package and independent holidays (pre-COVID-19 forecast), 2014-24
                                                                                                    • Figure 31: UK value* forecast of overseas package holidays (pre-COVID-19 forecast), 2014-24
                                                                                                    • Figure 32: UK value* forecast of overseas independent holidays (pre-COVID-19 forecast), 2014-24
                                                                                                  • Economic and other assumptions
                                                                                                    • Forecast methodology
                                                                                                    • Market Segmentation

                                                                                                      • Turkey entered the top five most visited package holiday destinations
                                                                                                        • Low-cost destinations are likely to increase in appeal once travel restrictions are lifted
                                                                                                          • Figure 33: UK overseas package holiday volume, top 20 destinations, October 2016-September 2017 to October 2018-September 2019
                                                                                                        • Greece, Turkey and Malta fast-growing destinations for independent travel in 2019
                                                                                                          • France will benefit from rise in self-drive holidays
                                                                                                            • Figure 34: UK overseas independent holiday volume, top 20 destinations, October 2016-September 2017 to October 2018-September 2019
                                                                                                          • Longer breaks will be in higher demand in 2020
                                                                                                            • Figure 35: UK package versus independent holiday volume, by trip duration, October 2015-September 2016 to October 2018-September 2019
                                                                                                        • Market Drivers

                                                                                                          • UK economy expected to contract as a result of COVID-19
                                                                                                            • Sharp decline in the value of the Pound from late February 2020
                                                                                                              • Figure 36: Pound versus euro and US Dollar, 1 April 2016-19 May 2020
                                                                                                            • UK government will discuss the aviation tax reform
                                                                                                            • Companies and Brands – What You Need to Know

                                                                                                              • easyJet Holidays has high potential once holidaying resumes
                                                                                                                • Turkey waives visa for Brits who visit the country for tourism purposes
                                                                                                                  • British Airways trials autonomous wheelchairs
                                                                                                                    • Jet2 is expanding its vegan offering
                                                                                                                      • Wright Electric expects the entry of its electric aircraft in 2030
                                                                                                                      • Market Share

                                                                                                                        • Big three become big two
                                                                                                                          • Figure 37: Passengers licensed under ATOL protection, by top 10 ATOL holders, 2016-20
                                                                                                                        • On the Beach benefits from asset-light business model
                                                                                                                          • easyJet Holidays has high potential once holidaying resumes
                                                                                                                            • Figure 38: Attitudes towards easyJet Holidays, February 2020
                                                                                                                          • easyJet Holidays most likely to appeal to younger travellers
                                                                                                                            • Figure 39: Attitudes towards easyJet Holidays, by demographics, February 2020
                                                                                                                        • Launch Activity and Innovation

                                                                                                                          • Boosting tourism
                                                                                                                            • Turkey waives visa for Brits who visit the country for tourism purposes
                                                                                                                              • British Airways introduces ‘Book With Confidence’ policy
                                                                                                                                • Making travel more accessible
                                                                                                                                  • British Airways trials autonomous wheelchairs
                                                                                                                                    • Virgin Atlantic becomes headline sponsor of Manchester Pride Festival
                                                                                                                                      • Offering ‘greener’ foods
                                                                                                                                        • Jet2 is expanding its vegan offering
                                                                                                                                          • Singapore Airlines serves meals from indoor vertical farm
                                                                                                                                            • Responsible tourism
                                                                                                                                              • Sustainability pledge by TUI Blue
                                                                                                                                                • Wright Electric expects the entry of its electric aircraft for 186 passengers in 2030
                                                                                                                                                • The Consumer – What You Need to Know

                                                                                                                                                  • Almost half of overseas main holidays booked independently
                                                                                                                                                    • Rise in one-person households creates opportunities for group holidays
                                                                                                                                                      • Value for money remained leading motivation to book independently
                                                                                                                                                        • Customisation may hinder convenience of booking package holidays, but it’s worth the risk
                                                                                                                                                          • Majority of travellers would like more options to personalise package holidays
                                                                                                                                                            • Travel agents play a key role in gaining customers’ trust
                                                                                                                                                            • Package vs Independent Bookings

                                                                                                                                                                • Package versus independent split remains stable
                                                                                                                                                                  • Figure 40: How people booked their ‘main holiday’ in the past 12 months, February 2016-February 2020
                                                                                                                                                                • Confidence in package holiday providers remained high following the Thomas Cook collapse
                                                                                                                                                                  • Almost half of overseas main holidays booked independently
                                                                                                                                                                    • Figure 41: How people booked their ‘main holiday’ in the past 12 months, UK versus overseas, February 2020
                                                                                                                                                                  • Over four in 10 package holidaymakers considered booking independently
                                                                                                                                                                    • Figure 42: Attitudes towards booking ‘main holiday’ as a package or independently, February 2020
                                                                                                                                                                • Holiday Types

                                                                                                                                                                  • COVID-19 poses threat for group holidays
                                                                                                                                                                    • Figure 43: How ‘main holiday’ types were booked in the past 12 months, February 2020
                                                                                                                                                                  • COVID-19 will temporarily boost holidays to rural areas
                                                                                                                                                                    • Figure 44: Type of ‘main holiday’ taken in the past 12 months, by destination, February 2020
                                                                                                                                                                • Reasons for Booking Independent Holidays

                                                                                                                                                                  • Value for money remained leading motivation to book independently
                                                                                                                                                                    • Figure 45: Reasons for booking independent holidays, February 2018-February 2020
                                                                                                                                                                • Reasons for Booking Package Holidays

                                                                                                                                                                  • Customisation may hinder convenience of booking package holidays, but it’s worth the risk
                                                                                                                                                                    • Human expertise helps to cut through the noise
                                                                                                                                                                      • Figure 46: Reasons for booking package holidays, February 2018-February 2020
                                                                                                                                                                    • Share of all-inclusive holidays remained stable over the past years
                                                                                                                                                                      • Figure 47: All-inclusive holiday booking for packages in the past 12 months, February 2017-February 2020
                                                                                                                                                                    • The majority have a good understanding of what ATOL protection means
                                                                                                                                                                      • Figure 48: Understanding of ATOL protection, February 2020
                                                                                                                                                                  • Customising Package Holidays

                                                                                                                                                                    • Majority of travellers would like more options to personalise package holidays
                                                                                                                                                                      • Figure 49: Attitudes towards customising package holidays, February 2020
                                                                                                                                                                    • Choosing hotel room location most preferred option when booking package holidays
                                                                                                                                                                      • Figure 50: Interest in customisable options when booking package holidays, February 2020
                                                                                                                                                                    • Choosing transfer and board type highly important to the older generation
                                                                                                                                                                      • Figure 51: Interest in customisable options when booking package holidays, by demographics, February 2020
                                                                                                                                                                  • Attitudes towards Travel Agent Shops

                                                                                                                                                                    • Travel agents play a key role in gaining customers’ trust
                                                                                                                                                                        • Figure 52: Attitudes towards travel agent shops, February 2020
                                                                                                                                                                      • Travel agents that present specialist knowledge are set to prosper
                                                                                                                                                                        • Figure 53: Attitudes towards travel agent shops when taking a new type of holiday – CHAID analysis, February 2020
                                                                                                                                                                    • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                        • Abbreviations
                                                                                                                                                                          • Consumer research methodology
                                                                                                                                                                            • CHAID analysis methodology
                                                                                                                                                                            • Appendix – Market Size and Forecast

                                                                                                                                                                              • Forecast methodology

                                                                                                                                                                              About the report

                                                                                                                                                                              This report will give you a complete 360-degree view of your market. Not only is it rooted in robust proprietary and high-quality third-party data, but our industry experts put that data into context and you’ll quickly understand:

                                                                                                                                                                              • The Consumer

                                                                                                                                                                                What They Want. Why They Want It.

                                                                                                                                                                              • The Competitors

                                                                                                                                                                                Who’s Winning. How To Stay Ahead.

                                                                                                                                                                              • The Market

                                                                                                                                                                                Size, Segments, Shares And Forecasts: How It All Adds Up.

                                                                                                                                                                              • The Innovations

                                                                                                                                                                                New Ideas. New Products. New Potential.

                                                                                                                                                                              • The Opportunities

                                                                                                                                                                                Where The White Space Is. How To Make It Yours.

                                                                                                                                                                              • The Trends

                                                                                                                                                                                What’s Shaping Demand – Today And Tomorrow.

                                                                                                                                                                              Please Note: This is a sample report. All of the figures, graphs, and tables have been redacted.

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