UK Package vs Independent Holidays Market Report 2022
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Description
The UK Package Vs Independent Holidays Market Report identifies consumers’ behaviours towards independent and package holidays, purchase drivers for both holiday formats and the impact of the cost of living on the UK holiday market. This report covers the independent and package holiday market size, market forecast, market segmentation and industry trends in the UK travel market.
Current Landscape of the UK Holiday Market
The package holiday market continues to be more closely associated with good value for money than independently booked holidays. The previous income squeeze saw cash-strapped consumers turn more to packaged holiday products to control spending and take advantage of aggressive pricing and the extra protection offered by the packaged holiday market.
However, short overseas breaks will come under pressure due to the rising cost of living, which will impact the the independent holiday sector the most.
Independent and Package Holiday Market Share and Key Industry Trends
As confidence in overseas travel recovers, the security offered by the package holiday market will become a less prominent selling point. New investments to make package holidays more flexible and customizable will be essential for the segment to broaden its appeal.
Tailoring the holiday to individual needs remains the main advantage of booking independently, while investments in making the booking process easier and faster will help increase the independent holiday sector’s appeal.
- 37% of UK adults plan to spend their main holiday overseas in the next 12 months.
- 45% of UK consumers who have booked/plan to book their overseas holiday will choose a package holiday.
- 51% of UK travellers who choose a package holiday will select a beach resort location.
- 81% of UK adults would book a rural/countryside holiday independently.
Future Trends in the UK Holiday Market
The UK’s ageing population will bode well for the package holiday market, but it will be essential for travel agents to offer customer service through a variety of channels, while many will need to offer added incentives to visit stores.
Mintel’s holiday market research identifies that there are ample opportunities around sustainability to support the growth of the holiday market size, especially for the independent segment, which is more reliant on an eco-conscious younger demographic.
To discover more about our UK Package vs. Independent Market Report 2022, read our UK Planning and Booking Process Market Report 2022, or take a look at our other Holidays and Travel Market Research.
Quickly Understand
- How the rising cost of living will impact the recovery of the UK holiday market and the way holidays are booked.
- Trends in holiday booking behaviour and reasons for booking package vs independent holidays.
- Holidaying intentions and likely behavioural changes in 2022 and beyond.
- Perceptions of package holidays, all-inclusive holidays and independently booked holidays.
- Explores holiday market research, UK holiday market share and holiday market size.
Covered in this Report
Brands: Thomas Cook, TUI, On the Beach, Booking.com, Jet2Holidays, We Love Holidays, Easy Jet, British Airways, Expedia Group, BravoNext, Virgin Holidays, Brightwater Holidays, Chillimix, Cook’s Club Corfu, Newmarket Holidays, Club Med, Hyatt Hotels Corporation, NEOM, Accor, The Red Sea Project.
Expert Analysis from a Specialist in the Travel Industry
This report, written by Marloes De Vries, a leading analyst in the travel industry, delivers in-depth commentary and analysis to highlight current trends in the UK holiday market and add expert context to the numbers.
“Some consumers remain more receptive to the extra protection offered by package holidays, which has resulted in a slight shift towards this booking method. Higher demand for beach holidays and luxury travel also benefits the package holiday segment as these trips account for a larger share of bookings made as a package.”
Marloes de Vries
Associate Director – Travel
Table of Contents
-
Overview
- Key issues covered in this Report
- Market context
- Products covered in this Report
-
Executive Summary
- The five-year outlook for the package vs independent holiday markets
- Figure 1: Category outlook, 2022-27
- The market
- Package and independent segments unlikely to recover to pre-pandemic levels in 2022
- Value will recover ahead of volume…
- …with the package holiday segment leading the way
- Figure 2: Forecast value* of overseas package holidays taken by UK residents, 2017-27
- Figure 3: Forecast value* of overseas independent holidays taken by UK residents, 2017-27
- The income squeeze will force holidaymakers to prioritise expenditure
- Staff shortages hinder smooth recovery
- Companies and brands
- On the Beach expands further into long-haul and premium markets
- loveholidays.com attributes growth to the choice, ease of booking and value it offers
- Booking.com enters the ATOL list, taking ninth position
- Travel companies respond to the rising cost of living
- The consumer
- UK continues to be a more popular choice than before the pandemic…
- …but appetite to spend main holiday overseas returns
- Figure 4: Destinations visited vs intentions to visit for main holiday, 2020-2022
- COVID-19 hardly poses a threat to holiday participation anymore
- Overseas travellers slightly more inclined to book as a package
- Figure 5: Booking method for ‘main holiday’ in the next 12 months, by destination, 2022
- Domestic travellers continue to show greater interest in beach and touring holidays
- Figure 6: Holiday types for ‘main holiday’ in the UK, participation vs intentions, 2020-22
- Beach holidays and luxury travel remain in high demand among overseas travellers
- Figure 7: Holiday types for ‘main holidays’ abroad, participation vs intentions, 2020-22
- Package bookings dominate luxury holidays while independent bookings are most common for rural breaks
- Simplicity has become a greater point of differentiation for package holidays
- Less strong need for security than last year, but extra protection still more important than before the pandemic
- Figure 8: Reasons for booking package holidays, 2021 vs 2022
- Flexibility has become a less strong motivator to book independently
- Figure 9: Reasons for booking independent holidays, 2021 vs 2022
- Value for money perceptions could give package holidays a competitive advantage
- All-inclusive market should boost ‘value for money’ perception
- Figure 10: Perceptions of holiday types, 2022
- Travel agents play a more important role in the planning and booking process
- Bad experiences with refunds have impacted the booking cycle
- Figure 11: Attitudes towards travel, 2022
- The five-year outlook for the package vs independent holiday markets
-
Issues and Insights
- The income squeeze will force holidaymakers to prioritise expenditure
- But pent-up demand in combination with lockdown savings still represent an opportunity
- Value for money perceptions could place package holidays in competitive advantage
- All-inclusive market should boost ‘value for money’ perception
- Investments in collaboration with travel agents essential to protect customer service levels
- Customisation is king
-
Market Size and Performance – Overseas Holidays
- Both independent and package holiday segments saw severe declines during the pandemic
- Travellers are more inclined to book a package in 2022
-
- Figure 12: Volume of overseas package and independent holidays taken by UK residents, 2015-22
- Figure 13: Value of overseas package and independent holidays taken by UK residents, 2015-22
-
Market Forecast – Overseas Holidays
- The five-year outlook for the package vs independent holiday markets
- Figure 14: Category outlook, 2022-27
- Value will recover ahead of volume…
- …with the package holiday segment leading the way
- Assumptions and more details
- Figure 15: Forecast volume of overseas package holidays taken by UK residents, 2017-27
- Figure 16: Forecast volume of overseas independent holidays taken by UK residents, 2017-27
-
- Figure 17: Forecast value* of overseas package holidays taken by UK residents, 2017-27
- Figure 18: Forecast value* of overseas independent holidays taken by UK residents, 2017-27
- Learnings from the last income squeeze
- Forecast methodology
- The five-year outlook for the package vs independent holiday markets
-
Market Drivers
- Pent-up demand released after easing of travel restrictions in early 2022
- Figure 19: Holiday bookings in the last three months, 2016-22
- The impact of inflation has yet to dent interest in booking holidays…
- … but inflation is expected to continue to rise in the final quarter of the year
- Income squeeze will force holidaymakers to prioritise expenditure
- Figure 20: Plans to book a holiday in the next three months, 2016-22
- Impact of inflation will not be felt evenly
- Higher demand for longer duration and premium products…
- …low-cost options expected to grow in popularity too
- Price of holidays expected to increase
- Staff shortages hinder smooth recovery
- Some companies are forced to make capacity cuts…
- …while others have enough resources to operate efficiently
- Disruption has impacted confidence to travel to some extent
- CAA publishes summary of responses to the ATOL Reform Consultation
- Pent-up demand released after easing of travel restrictions in early 2022
-
Market Share
- TUI and Jet2holidays dominate the package holiday market
- Thomas Cook failure influences comparison to pre-pandemic levels
- Jet2 increases ATOL licence due to better than expected sales
- TUI reports bookings from the UK for Summer 2022 exceed pre-pandemic levels
- Figure 21: Passengers licensed under ATOL protection, by top 10 ATOL holders, 2017-22
- On the Beach expands further into long-haul and premium markets
- loveholidays.com attributes growth to the choice, ease of booking and value it offers
- Booking.com enters the ATOL list taking ninth position
-
Launch Activity and Innovation
- Travel companies respond to price increases
- Brightwater Holidays introduces new lower-cost domestic holidays
- Newmarket Holidays releases dates for 2024 early
- Inclusivity increasingly on the agenda of travel companies
- LGBTQ+ tour operator Chillimix adds first exclusive escorted tour to its portfolio
- New York City’s destination marketing organisation publishes Halal Travel Guide
- New initiatives in the all-inclusive market
- Cook’s Club Corfu opens with its new all-inclusive concept focused on made-to-order dishes
- Expansions in the all-inclusive luxury space
- Saudi Arabia is developing new tourist destinations
- NEOM will offer travellers a chance to visit the ‘new future’
- The Red Sea Project signs contracts with three international hotel brands
- Boosting summer holidays
- Abu Dhabi launches limited edition Summer Pass
- Jet2holidays announces its biggest giveaway of Free Child Places
-
Holidaying Participation and Destination
- Holiday participation has the potential to exceed pre-pandemic levels
- UK continues to be a more popular choice than before the pandemic…
- …but appetite to spend main holiday overseas returns
- Figure 22: Destinations visited vs intentions to visit for main holiday, 2020-2022
- COVID-19 hardly poses a threat to holiday participation anymore
- Figure 23: Barriers to taking a holiday, by age, 2022
-
Package vs Independent Bookings
- Almost six in 10 travellers plan to book their main break independently
- Figure 24: Booking method for ‘main holiday’ in the next 12 months, by destination, 2022
- Overseas travellers slightly more inclined to book as a package
- Almost six in 10 travellers plan to book their main break independently
-
Holiday Types
- Domestic travellers continue to show greater interest in beach and touring holidays
- Figure 25: Holiday types for ‘main holiday’ in the UK, participation vs intentions, 2020-22
- Beach holidays and luxury travel remain in high demand among overseas travellers
- Figure 26: Holiday types for ‘main holidays’ abroad, participation vs intentions, 2020-22
- Package bookings dominate luxury holidays while independent bookings are most common for rural breaks
- Figure 27: How travellers plan to book their ‘main holiday’ in the next 12 months, 2022
- Domestic travellers continue to show greater interest in beach and touring holidays
-
Reasons for Booking Package Holidays
- Simplicity has become a greater point of differentiation
- Less strong need for security than last year…
- …but extra protection still more important than before the pandemic
- Figure 28: Reasons for booking package holidays, 2021 vs 2022
-
Reasons for Booking Independent Holidays
- Freedom and flexibility are key strengths of independent holidays…
- …but flexibility has become a less strong motivator to book independently
-
- Figure 29: Reasons for booking independent holidays, 2021 vs 2022
-
Perceptions of Holiday Types
- Value for money perceptions could give package holidays a competitive advantage
- All-inclusive market should boost ‘value for money’ perception
-
- Figure 30: Perceptions of holiday types, 2022
- Time-saving features can help independent holidays to broaden their audience
- Figure 31: Perceptions of holiday types – Correspondence analysis, 2022
- Customisation can help package holidays appeal to a wider audience
-
Attitudes towards Holidays
- Travel agents play a more important role in the planning and booking process…
- …but investments are essential to protect customer service levels
- Figure 32: Attitudes towards travel agents, 2022
- Young consumers have a lower understanding of what ATOL and ABTA protection mean
- Bad experiences with refunds have impacted the booking cycle
- Figure 33: Attitudes towards travel, by booking method for overseas main holiday, 2022
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Appendix – Data Sources, Abbreviations and Supporting Information
- Abbreviations
- Consumer research methodology
- Correspondence analysis methodology
-
Appendix: Forecast Methodology
- Volume forecast and prediction intervals for overseas package holidays
- Figure 34: Lower-bound, central and upper-bound forecast for the volume of overseas package holidays taken by UK residents, 2022-27
- Value forecast and prediction intervals for overseas package holidays
- Figure 35: Lower-bound, central and upper-bound forecast for the value* of overseas package holidays taken by UK residents, 2022-27
- Volume forecast and prediction intervals for overseas independent holidays
- Figure 36: Lower-bound, central and upper-bound forecast for the volume of overseas independent holidays taken by UK residents, 2022-27
- Value forecast and prediction intervals for overseas independent holidays
- Figure 37: Lower-bound, central and upper-bound forecast for the value* of overseas independent holidays taken by UK residents, 2022-27
- Value forecast package and independent holidays at constant prices
- Figure 38: Value of overseas package holidays taken by UK residents at 2022 prices, 2022-27
- Figure 39: Value of overseas independent holidays taken by UK residents at 2022 prices, 2022-27
- Market drivers and assumptions
- Forecast methodology
- Volume forecast and prediction intervals for overseas package holidays
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