Table of Contents
Executive Summary
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- Impact of COVID-19 on the UK travel market
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- Figure 1: Short-, medium- and long-term impact of COVID-19 on the UK travel market, 19 January 2021
- The market
- Value of domestic holiday market expected to have declined by 46% in 2020
- 2021 could be a record year for summer staycations in the UK
- The value of the domestic holiday market is expected to recover in 2022
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- Figure 2: Forecast volume and value* of domestic holidays taken by British residents (prepared on 19 January 2021), 2015-25
- Value of overseas holiday market expected to have declined by 79% in 2020
- The second half of 2021 has the potential to see strong demand
- The value of the overseas holiday market is expected to recover in 2024
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- Figure 3: Forecast volume and value* of overseas holidays taken by UK residents (prepared on 19 January 2021), 2015-25 **
- Consumer confidence comparable to pre-COVID levels…
- …but protective financial behaviours are likely to impact holiday frequency
- Companies and brands
- Campaigns to encourage 2021 bookings
- Initiatives to make testing more accessible
- Brands aim for a greener and more inclusive image
- The consumer
- Booking intentions increased when vaccination programme was rolled out…
- …however, new lockdowns led to a decline in booking levels
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- Figure 4: Actual bookings and plans to book a holiday in the next three months, January 2019-January 2021
- Holiday participation has the potential to recover in 2021
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- Figure 5: Destinations visited vs intentions to visit, 2018-20
- Opportunity to combine nature-based holidays in the UK with culture
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- Figure 6: Participation and future holidaying intentions in the UK, by holiday type, November 2019 vs October 2020
- Strong desire for overseas beach holidays
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- Figure 7: Participation and future holidaying intentions abroad, by holiday type, November 2019 vs October 2020
- De-stressing and reconnecting with others will be central to consumers’ motivation to travel in 2021
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- Figure 8: Most important reasons to take a holiday in the next 12 months, October 2020
- Local culture a key attraction of long-haul destinations
- Summer season could get crowded and expensive
- Financial protection; a more important selling point in 2021
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- Figure 9: Attitudes towards booking holidays, October 2020
- The importance of accessible travel
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- Figure 10: Attitudes towards holidays, October 2020
Issues and Insights
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- Limited travel options in 2020 provide opportunity to upgrade holidays in 2021
- Making the holiday planning and booking process easier by integrating COVID-19 measures
The Market – Key Takeaways
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- Pent-up demand expected once restrictions are lifted
- Some consumers managed to save more whilst others feel the financial impact of COVID-19
- Entry restrictions add to the complexity of holiday planning
Market Size and Forecast – Total
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- New lockdowns dampen speed of recovery of travel market
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- Figure 11: Short-, medium- and long-term impact of COVID-19 on the UK travel market, 19 January 2021
- Value of the UK holiday market expected to have declined by 71% in 2020
- Late booking trend will continue amid lockdowns
- Pent-up demand will be released once restrictions are lifted
- Long-term outlook of holiday market remains positive
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- Figure 12: Forecast volume and value* of domestic** and overseas holidays taken by UK residents (prepared on 19 January 2020), 2015-25
- Market drivers and assumptions
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- Figure 13: Key drivers affecting Mintel’s market forecast (prepared on 19 January 2021), 2015-25
- Learnings from the last recession
- Boost in domestic holiday rental property stays
- Fewer overseas short breaks but more self-drive holidays and visits to low-cost destinations
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- Figure 14: Value sales of domestic and overseas holidays, 2008-15
- Forecast methodology
Market Size and Forecast – Domestic
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- 2019 was a record year for domestic tourism
- Value of domestic holiday market expected to have declined by 46% in 2020
- 2021 could be a record year for summer staycations in the UK
- The value of the domestic holiday market is expected to recover in 2022
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- Figure 15: Forecast volume and value* of domestic holidays taken by British residents (prepared on 19 January 2021), 2015-25
- Forecast methodology
Market Size and Forecast – Overseas
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- Value of overseas travel grew significantly prior to COVID-19
- Value of overseas holiday market expected to have declined by 79% in 2020
- The second half of 2021 has the potential to see strong demand
- The value of the overseas holiday market is expected to recover in 2024
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- Figure 16: Forecast volume and value* of overseas holidays taken by UK residents (prepared on 19 January 2021), 2015-25 **
- Forecast methodology
Market Segmentation
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- Brands have the opportunity to entice travellers to book longer stays
- Working holidays make longer trips a viable option for more travellers
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- Figure 17: Volume of overseas holidays and domestic holidays, by length of stay, 2015-19
- Over-55s will be an important driver for growth of the travel market
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- Figure 18: Volume, nights and spend for overseas holidays and domestic holidays, by age, 2019
- Desire to be outdoors will lead to further growth potential for Scotland
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- Figure 19: Holidays in Great Britain taken by British residents, by region visited, 2016-19
- Greece and Turkey continued to gain market share in 2019
- Spain likely to remain the leading overseas destination
- France challenged to increase value-for-money perceptions
- Italy has potential to gain market share in the luxury travel market
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- Figure 20: Top 15 overseas holiday destinations for UK holidaymakers, by number of holidays, 2017-19
- Package holiday providers will benefit from the financial protection offered
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- Figure 21: UK volume of overseas package and independent holidays, 2015-19
Market Drivers
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- New strain of COVID-19 pushes more of the UK back into lockdown
- Lockdowns prolong the recovery of the holiday market
- EU recommends to ban non-essential travel from the UK
- An increasing number of countries require negative COVID-19 test results upon arrival
- UK reduces quarantine period to 10 days and introduces Test to Release strategy, but closes travel corridors temporarily
- Some consumers continue to feel the impact of COVID-19 on their finances…
- …however, government support and reduced outgoings have mitigated the impact on the wider population
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- Figure 22: Changes in financial situation, November 2019-January 2021
- Consumer confidence comparable to pre-COVID levels…
- …but protective financial behaviours are likely to impact holiday frequency
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- Figure 23: Financial confidence in the year ahead, November 2019-January 2021
- Pound-to-US Dollar exchange rate continued to improve
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- Figure 24: Pound versus euro and US Dollar, 1 April 2016-30 December 2020
Companies and Brands – Key Takeaways
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- Campaigns to encourage 2021 bookings
- Initiatives to make testing more accessible
- Brands aim for a greener and more inclusive image
Launch Activity and Innovation
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- Promotional campaigns to encourage bookings
- TUI shows people that nothing compares to a real holiday
- Kuoni’s Turn of Year campaign: Get Carried Away
- More travel companies are participating in Black Friday event
- Making testing more accessible
- Manchester Airport launches testing facility and offers a 5% discount on Boots’ in-store testing service
- Sofitel and Hilton promote Test & Rest packages
- Abercrombie & Kent offers £50 discount towards a COVID-19 test
- Brands strive to become carbon-neutral or positive
- Valencia aims to become a carbon-neutral destination by 2025
- Danish hotel will open a climate-positive wing in 2021
- Travel companies set goals to be more inclusive
- Airbnb sets long-term goals to make the company more diverse and inclusive
- Intrepid’s commitments to reduce gender inequality
The Consumer – Key Takeaways
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- Underlying demand for travel remains strong…
- …however, new lockdowns led to a decline in booking levels
- Confidence in booking holidays online remains high
- Financial protection; a more important selling point in 2021
- Travellers will continue to search for quieter places to stay
- De-stressing and reconnecting with others will be central to consumers’ motivation to travel in 2021
The Impact of COVID-19 on Consumer Behaviour
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- Booking intentions increased when vaccination programme was rolled out…
- …however, new lockdowns led to a decline in booking levels
- Opportunity to upgrade existing bookings
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- Figure 25: Actual bookings and plans to book a holiday in the next three months, January 2019-January 2021
- Protection of older generation provides opportunities to encourage bookings
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- Figure 26: Plans to book a holiday in the next three months, by age, December 2019-January 2021
- Once restrictions are lifted, many consumers will remain cautious
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- Figure 27: Consumer concern about COVID-19, February 2020-January 2021
Holiday Destinations – Visited
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- Participation in domestic holidays remained stable during the pandemic
- Self-employed and over-55s among the segments showing the highest drop in holiday participation
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- Figure 28: Destinations visited on holiday in the past 12 months, 2018-20
- Regulations will have a big say in the speed of recovery by destination
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- Figure 29: Destinations visited on holiday in the past 12 months, by country, 2018-20
Holiday Destinations – Future Intentions
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- Holiday participation has the potential to recover in 2021
- Travellers will cut back on the number of breaks they take
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- Figure 30: Destinations visited vs intentions to visit, 2018-20
- Domestic holiday market will benefit from COVID-19 uncertainty
- Overseas destinations closer to home are likely to recover quicker
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- Figure 31: Destinations visited vs intentions to visit, by country, 2018-20
Holiday Types – Participation vs Future Intentions
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- Vaccine protection could make cities attractive again for older generation
- Opportunity to combine nature-based holidays in the UK with culture and wellness
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- Figure 32: Participation and future holidaying intentions in the UK, by holiday type, November 2019 vs October 2020
- Strong desire for overseas beach holidays
- Less crowded areas will appeal in 2021
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- Figure 33: Participation and future holidaying intentions abroad, by holiday type, November 2019 vs October 2020
Holiday Motivations
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- De-stressing and reconnecting with others key travel motivations in 2021
- Brands challenged to evoke feelings of trust whilst selling a highly experiential product
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- Figure 34: Most important reasons to take a holiday in the next 12 months, October 2020
- Local culture a key attraction of long-haul destinations
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- Figure 35: Most important reasons to take a holiday in the next 12 months, domestic vs overseas, October 2020
- Scotland and Wales set to benefit from desire to be in the great outdoors
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- Figure 36: Most important reasons to take a holiday in the next 12 months, by destination, October 2020
Booking Intentions
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- Summer season could get crowded and expensive
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- Figure 37: Holidaying intentions, by quarter and destination, October 2020
- Consumers need support and flexibility for a seamless travel experience
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- Figure 38: Time between booking and departure, October 2020
Attitudes towards Booking Holidays
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- Financial protection; a more important selling point in 2021
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- Figure 39: Attitudes towards booking holidays, October 2020
- Confidence in booking holidays online remains high
Attitudes towards Holidays
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- Underlying demand for travel remains strong
- The importance of accessible travel
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- Figure 40: Attitudes towards holidays, October 2020
- The desire to meet locals remains strong
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
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