Table of Contents
Executive Summary
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- The market
- Travel industry will face its steepest decline in history
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- 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
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- 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
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- 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
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- Figure 5: How ‘main holiday’ types were booked in the past 12 months, February 2020
- Value for money remained leading motivation to book independently
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- 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
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- 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
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- Figure 8: Interest in customisable options when booking package holidays, February 2020
- Travel agents play a key role in gaining customers’ trust
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- Figure 9: Attitudes towards travel agent shops, February 2020
- What we think
Impact of COVID-19 on the Package and Independent Holiday Markets
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- Short, medium and long-term impact on the industry
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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
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- Strong demand for package holidays in 2019
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- Figure 19: UK volume of overseas package and independent holidays, 2014-19
- Strong growth in the value of package holidays in 2019
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- 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
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- 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*
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- 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
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- 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
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- 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
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- 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
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- Figure 32: UK value* forecast of overseas independent holidays (pre-COVID-19 forecast), 2014-24
- Economic and other assumptions
- Forecast methodology
Market Segmentation
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- Turkey entered the top five most visited package holiday destinations
- Low-cost destinations are likely to increase in appeal once travel restrictions are lifted
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- 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
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- 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
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- Figure 35: UK package versus independent holiday volume, by trip duration, October 2015-September 2016 to October 2018-September 2019
Market Drivers
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- UK economy expected to contract as a result of COVID-19
- Sharp decline in the value of the Pound from late February 2020
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- 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
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- 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
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- Big three become big two
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- 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
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- Figure 38: Attitudes towards easyJet Holidays, February 2020
- easyJet Holidays most likely to appeal to younger travellers
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- Figure 39: Attitudes towards easyJet Holidays, by demographics, February 2020
Launch Activity and Innovation
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- 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
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- 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
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- Package versus independent split remains stable
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- 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
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- 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
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- Figure 42: Attitudes towards booking ‘main holiday’ as a package or independently, February 2020
Holiday Types
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- COVID-19 poses threat for group holidays
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- Figure 43: How ‘main holiday’ types were booked in the past 12 months, February 2020
- COVID-19 will temporarily boost holidays to rural areas
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- Figure 44: Type of ‘main holiday’ taken in the past 12 months, by destination, February 2020
Reasons for Booking Independent Holidays
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- Value for money remained leading motivation to book independently
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- Figure 45: Reasons for booking independent holidays, February 2018-February 2020
Reasons for Booking Package Holidays
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- Customisation may hinder convenience of booking package holidays, but it’s worth the risk
- Human expertise helps to cut through the noise
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- Figure 46: Reasons for booking package holidays, February 2018-February 2020
- Share of all-inclusive holidays remained stable over the past years
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- 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
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- Figure 48: Understanding of ATOL protection, February 2020
Customising Package Holidays
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- Majority of travellers would like more options to personalise package holidays
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- Figure 49: Attitudes towards customising package holidays, February 2020
- Choosing hotel room location most preferred option when booking package holidays
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- Figure 50: Interest in customisable options when booking package holidays, February 2020
- Choosing transfer and board type highly important to the older generation
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- Figure 51: Interest in customisable options when booking package holidays, by demographics, February 2020
Attitudes towards Travel Agent Shops
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- Travel agents play a key role in gaining customers’ trust
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- Figure 52: Attitudes towards travel agent shops, February 2020
- Travel agents that present specialist knowledge are set to prosper
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- 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
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- Abbreviations
- Consumer research methodology
- CHAID analysis methodology
Appendix – Market Size and Forecast
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- Forecast methodology
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