Table of Contents
Executive Summary
-
- The market
- Independent bookings to grow faster than packages
-
- Figure 1: Forecast volume of overseas independent holidays taken by UK residents, 2010-20
- Figure 2: Forecast volume of overseas package holidays taken by UK residents, 2010-20
- The consumer
- Make traditional package bookings more flexible
-
- Figure 3: Booking types in the last 12 months, February 2016
- Cheap packages can drive bookings to alternative destinations
-
- Figure 4: Holiday behaviours, February 2016
- Package bookers spend nearly twice as much as independent bookers
-
- Figure 5: Holiday booking type, by holiday spending (mean and median), February 2016
- Many consumers have concerns about the quality of accommodation when booking packages
-
- Figure 6: Package and independent holiday attitudes, February 2016
- Over half of holidaymakers have booked or are open to booking a package
-
- Figure 7: Package holiday plans for the next year, February 2016
- What we think
Issues and Insights
-
- Pure package providers must adapt to the growing demand for city breaks
- The facts
- The implications
- Using technology to get consumers excited
- The facts
- The implications
- Consumers have concerns about accommodation quality when booking packages
- The facts
- The implications
The Market – What You Need to Know
-
- Consumer confidence is on a two-track course of recovery
- Volume and value for independent bookings to increase at a faster rate than for packages
- Low oil price could contribute to an increase in independent bookings
- UK travellers could lose some travel benefits if Brexit goes ahead
- Cuts to Air Passenger Duty should make long-haul package trips more attractive
Market Size and Forecast
-
- Package bookings buoyed by savvy spending…
- …but independent booking methods likely to grow at a faster rate
-
- Figure 8: Forecast of UK overseas volume, package and independent holidays, 2010-20
-
- Figure 9: Forecast of UK overseas value*, package and independent holidays, 2010-20
-
- Figure 10: Forecast volume of UK overseas independent holidays, 2010-20
- Figure 11: Forecast volume of UK overseas package holidays, 2010-20
- Figure 12: Forecast value of UK overseas independent holidays, 2010-20
- Figure 13: Forecast value of UK overseas package holidays, 2010-20
Segment Performance
-
- Independent bookings via air likely to grow at the expense of packages
-
- Figure 14: Package vs independent overseas holidays, by transport method, 2010-15
- Top 20 countries
-
- Figure 15: Top 15 countries, independent versus package, January-September 2015
- Figure 16: Package holidays, by volume, Q1-Q3 2014 versus Q1-Q3 2015
Market Drivers
-
- Consumers returning overseas
-
- Figure 17: Overseas holiday market volume and value*, 2010-20
- Figure 18: Total package and independent holiday volume, 2010-20
-
- Figure 19: Total package and independent holiday value, 2010-20
- Some economic uncertainty lies ahead in 2016…
- …but consumer sentiment is cautiously optimistic
-
- Figure 20: Consumers’ financial situation, January 2009-January 2016
- New Package Travel Directive
- Winter months a key time for a call to action
-
- Figure 21: Percentage of consumers who plan to book a holiday in the next three months, by month, January 2015-January 2016
- APD cuts should have a positive effect on long-haul package trips
-
- Figure 22: Air Passenger Duty (APD) rates, April 2012-April 2016*
- 2016’s cheapest destinations can help encourage more package bookings
-
- Figure 23: Post Office Worldwide Cost Barometer 2016
- Low oil price should lead to lower airfares for some destinations
-
- Figure 24: Brent Crude Spot Oil Price (US$ per barrel), March 2011-March 2016
Key Players – What You Need to Know
-
- TUI increases its ATOL-licensed passengers
- On the Beach aims to generate over £90 million through its IPO
- Wherefor allows users to book a dynamic package holiday based on their budget
- Google moving into the online travel booking space
- Thomson and First Choice launch smart TV apps
Market Share
-
- TUI increases its ATOL-licensed passengers
-
- Figure 25: Passengers licensed under ATOL protection, by top 10 ATOL holders, 2011-16
Launch Activity and Innovation
-
- Wherefor’s budget before destination dynamic model could take hold
-
- Figure 26: Wherefor website screen shot, April 2013
- Google develops ‘Book on Google’ feature for hotels
- Google launches Destinations for its mobile search app
-
- Figure 27: Google Destinations, March 2016
- Smart TV apps and the booking process
-
- Figure 28: Airbnb’s Apple TV app
- Figure 29: Thomson’s smart TV app, April 2015
- Travel brands using virtual reality and 360-degree YouTube videos
- Predictive flight booker Hopper raises $16 (£11.2) million in funding
-
- Figure 30: Price predicting smartphone app Hopper
- Expedia now enables communication between guest and hotel
- Live chat with KLM Royal Dutch Airlines via Facebook Messenger
-
- Figure 31: KLM Royal Dutch Airways in the Facebook Messenger app
The Consumer – What You Need to Know
-
- Package providers should provide more flexibility
- Alternative destinations are attractive for the right price
- Pure package providers must adapt to the growing trend for city breaks
- Package bookers spend twice as much as independent bookers
- Consumers need to be reassured about the quality of accommodation
Package vs Independent Profile
-
- Make package bookings more flexible to encourage independent bookers
-
- Figure 32: Booking types in the last 12 months, February 2016
- Over-55s the most likely to have booked a pure package
-
- Figure 33: Booking types of main holiday in the last 12 months, by age, February 2016
- Affluent holidaymakers keen on packages
-
- Figure 34: Booking types in the last 12 months, by household income, February 2016
- Less affluent consumers tend to holiday at home
-
- Figure 35: Booking types in the last 12 months, by financial situation, February 2016
- The decline of the staycation presents more opportunities for package providers
-
- Figure 36: Holiday destinations visited in the past 12 months, by booking type, February 2016
Holiday Behaviours
-
- Price a strong influencer on destination choice
- Parents want to take their kids on holidays outside of term time
- Affluent holidaymakers most likely to be influenced by favourable market drivers
-
- Figure 37: Holiday behaviours, February 2016
Holiday Types and Package Holidays
-
- Families are key for beach packages
- City breaks on the rise; pure package providers must allow customisation
- Developing a customisable dynamic booking model
-
- Figure 38: Holiday types taken over the last 12 months, by booking type, February 2016
Holiday Spending – Package versus Independent
-
- An overview of holiday spending
-
- Figure 39: Holiday spending (ranges), February 2016
-
- Figure 40: Average holiday spend, February 2016
- Package bookers are lucrative targets
-
- Figure 41: Holiday booking type, by holiday spending (mean and median), February 2016
-
- Figure 42: Holiday booking type, by holiday spending (ranges), February 2016
- Rewarding consumer desire for more holidays to build loyalty
Package and Independent Holiday Attitudes
-
- Parents and beach-goers view packages as the cheaper option
- Consumers wary about the quality of accommodation
- Gamify the experience for concerned parents who enjoy the booking process
-
- Figure 43: Package and independent holiday attitudes (1), February 2016
- Experience is all; shifting to a more dynamic model
-
- Figure 44: Package and independent holiday attitudes (2), February 2016
Package Holiday Plans
-
- Package plans for 2016
-
- Figure 45: Package holiday plans for the next year, February 2016
- Millennials most likely to book packages
-
- Figure 46: Package holiday plans for the next year, by age, February 2016
CHAID Analysis
-
- Methodology
- Collaboration between friends and family could be made possible via messaging apps
-
- Figure 47: Target groups based on attitudes towards package and independent holidays – CHAID – Tree output, February 2016
-
- Figure 48: Target groups based on attitudes towards package and independent holidays – CHAID – Table output, February 2016
Appendix – Data Sources, Abbreviations and Supporting Information
-
- Abbreviations
- Travel and tourism definitions
- Fan chart forecast
-
- Figure 49: Best- and worst-case forecast of UK overseas independent holiday volume, 2015-20
- Figure 50: Best- and worst-case forecast of UK overseas package holiday volume, 2015-20
- Figure 51: Best- and worst-case forecast of UK overseas independent holiday value, 2015-20
- Figure 52: Best- and worst-case forecast of UK overseas package holiday value, 2015-20
Back to top