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 package and independent holiday markets, 28 May 2021
- The market
- Package holidays will benefit from financial protection offered and higher demand for luxury travel
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- Figure 2: COVID-19 scenario forecasts for the value of overseas package holidays taken by UK residents (prepared on 28 May 2021), 2015-25
- Dampened appeal of short breaks will impact independent sector more
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- Figure 3: COVID-19 scenario forecasts for the value of overseas independent holidays taken by UK residents (prepared on 28 May 2021), 2015-25
- Financial confidence has fully recovered…
- … but uncertainty about the lifting of international travel restrictions remains
- Companies and brands
- TUI accelerates digital strategy
- Jet2 expands villa package offering and extends summer season
- More companies are tapping into wellness tourism trend
- British Airways trials virtual queuing technology and 25-second COVID-19 antigen test
- The consumer
- Initial green list provided a small boost in bookings
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- Figure 4: Actual bookings and plans to book a holiday in the next three months, January 2019-May 2021
- Vaccination programme will help confidence in travel to recover
- Shift in age profile of package vs independent bookers
- Overseas independent travellers more hesitant to book
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- Figure 5: Booking intentions for main holiday, by intended booking method and destination, March 2021
- Most travellers hold off booking until restrictions are lifted
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- Figure 6: Reason for not yet having booked main holiday, by intended booking method, March 2021
- Independent sector will benefit most from unprecedented demand for rural escapes in the UK
- Group-based holidays/escorted tours are the third biggest domestic package product
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- Figure 7: Holiday types, by booking method ‘main holidays’ in the UK in the next 12 months, March 2021
- Package holiday providers set to benefit from higher demand for luxury travel
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- Figure 8: Holiday types, by booking method of ‘main holidays’ abroad in the next 12 months, March 2021
- Increased focus on personalising content
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- Figure 9: Reasons for booking package holidays, by age, March 2021
- Private experience has become a more important motivator to book independently
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- Figure 10: Reasons for booking independent holidays, by age, March 2021
- Online advice and incentives to visit stores increasingly important
Issues and Insights
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- Return to nature will be a growing theme
- The battle for the best personalised experience
The Market – Key Takeaways
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- Package holidays will benefit from financial protection offered
- Dampened appeal of short breaks will impact independent sector more
- COVID-19 checks will likely lead to longer queues at the border
- First review of the traffic light system will take place in late June
Market Size and Performance
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- Package holiday providers will benefit from increased need for protection
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- Figure 11: Short, medium and long term impact of COVID-19 on the UK package and independent holiday markets, 28 May 2021
- Strong demand for package holidays just before COVID-19 hit
- Travel market showed steepest decline in history following COVID-19
- Independent and package holiday segments both held advantages but still saw severe declines
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- Figure 12: Volume of overseas package and independent holidays taken by UK residents, 2015-20
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- Figure 13: Value* of overseas package and independent holidays taken by UK residents, 2015-20
Market Forecast
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- Package holidays will benefit from financial protection offered
- Higher demand for luxury travel will boost the value of package holidays
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- Figure 14: Forecast volume of overseas package holidays taken by UK residents (prepared on 28 May 2021), 2015-25
- Figure 15: Forecast value* of overseas package holidays taken by UK residents (prepared on 28 May 2021), 2015-25
- Dampened appeal of short breaks will impact independent sector more
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- Figure 16: Forecast volume of overseas independent holidays taken by UK residents (prepared on 28 May 2021), 2015-25
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- Figure 17: Forecast value* of overseas independent holidays taken by UK residents (prepared on 28 May 2021), 2015-25
COVID-19 Scenario Performance
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- Mintel’s approach to predicting the impact of COVID-19
- Fundamental differences in how COVID-19 is affecting consumer markets
- Rapid COVID recovery will have more impact on the short term recovery of independent holidays
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- Figure 18: COVID-19 scenario forecasts for the value of overseas package holidays taken by UK residents (prepared on 28 May 2021), 2015-25
- Extended COVID disruption will be disastrous for international travel
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- Figure 19: COVID-19 scenario forecasts for the value of overseas independent holidays taken by UK residents (prepared on 28 May 2021), 2015-25
- COVID-19 market disruption: risks and outcomes
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- Figure 20: Summary of Mintel scenario expectations and the impact on the holidays market, May 2021
Market Segmentation
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- Spain was the top choice for package holidays prior to COVID-19
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- Figure 21: Volume of overseas package holidays taken by UK residents, top 20 destinations, 2016-19
- Greece and Turkey were fast-growing destinations for independent travel prior to COVID-19
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- Figure 22: Volume of overseas independent holidays taken by UK residents, top 20 destinations, 2016-19
- The speed of each destination’s recovery will depend heavily on the easing of restrictions
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- Figure 23: Package vs independent share, by destination, based on volume of trips taken by UK residents in 2019
- Overseas short break segment will take a hit in 2021
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- Figure 24: UK package versus independent holiday volume, by trip duration, 2016-19
Market Drivers
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- Financial confidence has fully recovered
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- Figure 25: The financial confidence index, January 2015-April 2021
- Government updates green, amber and red list
- Green list is not reciprocal and may differ from FCDO’s advice
- First review of the traffic light system will take place in late June
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- Figure 26: Traffic light system for international travel, 13 May 2021
- COVID-19 checks will likely lead to longer queues at the border
- Vaccination status available in digital and paper format from 17 May
- Indian variant slows down UK’s recovery of international travel
- CAA starts consultation on suggested changes to ATOL scheme
Companies and Brands – Key Takeaways
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- TUI and Jet2 dominate package holiday market
- More companies are tapping into wellness tourism trend
- British Airways trials virtual queuing technology and 25-second COVID-19 antigen test
Market Share
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- TUI and Jet2 dominate package holiday market
- TUI reports increase in average selling price
- TUI’s Holiday Promise to give travellers peace of mind
- TUI accelerates digital strategy
- Jet2 postpones restart date but extends summer season
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- Figure 27: Passengers licensed under ATOL protection, by top 10 ATOL holders, 2017-21
- On the Beach; the third-largest package holiday provider
- On the Beach is only selling holidays with a departure date of after 31 August 2021
- On the Beach redesigns booking path to personalise the customer experience
- Trust in On the Beach declined following move to quit ABTA
- Digitalisation plays a key role in improving easyJet’s customer experience
- Thomas Cook back in the marketplace
- The relaunch of Thomas Cook as an online travel company
- Thomas Cook launches digital travel money service
- Rising competition, lack of differentiation and low customer satisfaction contributed to collapse in 2019
- Expedia positions itself as a travel companion throughout travellers’ journey
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- Figure 28: Usage of brands in the past 12 months, March 2020 vs March 2021
Launch Activity and Innovation
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- Brands tap into desire to avoid crowds
- Guests can book Sheraton’s private island exclusively
- British Airways trials virtual queuing technology
- Innovations for a more affordable and quicker testing process
- British Airways hopes to roll-out 25-second COVID-19 antigen test
- TUI offers testing packages from £20 to package holidaymakers
- A selection of campaigns launched by destinations to restart tourism
- Spanish tourist board launches ‘You Deserve Spain’ campaign
- Malta launches scheme to incentivise independent direct bookings with hotels
- More companies are tapping into wellness tourism trend
- Banyan Tree’s Wellbeing Sanctuaries help guests to connect with themselves, others and nature
- Kerzner will launch a new fitness and wellbeing experience
The Consumer – Key Takeaways
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- Green provided a small boost in bookings
- COVID-19 uncertainty pushes level of protection into the spotlight
- Private experience has become a more important motivator to book independently
- High interest in independently booked rural escapes and luxury packages
Impact of COVID-19 on Consumer Behaviour
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- Green list provided a small boost in bookings
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- Figure 29: Actual bookings and plans to book a holiday in the next three months, January 2019-May 2021
- Initial enthusiasm about travelling subsided over the first months of 2021
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- Figure 30: Most desired activities once the current social distancing measures are relaxed, February 2021-April 2021
- COVID-19 anxiety impacts bookings levels and increases the need for COVID-19 cover…
- ...but the vaccination programme will help confidence in travel to recover
Package vs Independent Bookings
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- Staycation boom intensified amid uncertainty of lifting international travel restrictions
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- Figure 31: Destinations visited vs intentions to visit for main holiday, February 2020 vs March 2021
- Over half of travellers plan to book their main break independently…
- …However, COVID-19 uncertainty pushes level of protection into the spotlight
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- Figure 32: Booking method ‘main holiday’ in the next 12 months, by destination, March 2021
- Shift in age profile of package vs independent bookers
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- Figure 33: Age profile of those planning to book ‘main holiday’ as a package vs independently in the next 12 months, March 2021
Booking Period
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- Overseas independent travellers more hesitant to book
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- Figure 34: Booking intentions for main holiday, by intended booking method and destination, March 2021
- Most travellers hold off booking until restrictions are lifted
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- Figure 35: Reason for not yet having booked main holiday, by intended booking method, March 2021
Holiday Types
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- Independent sector will benefit most from unprecedented demand for rural escapes in the UK
- Group-based holidays/escorted tours are the third biggest domestic package product
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- Figure 36: Holiday types, by booking method ‘main holidays’ in the UK in the next 12 months, March 2021
- Package holiday providers set to benefit from higher demand for luxury travel
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- Figure 37: Holiday types, by booking method ‘main holidays’ abroad in the next 12 months, March 2021
Reasons for Booking Package vs Independent Holidays
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- Value for money, easy to arrange and security drive package holiday bookings
- Protection has become a stronger driver for package holiday bookings
- Increased focus on personalising content
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- Figure 38: Reasons for booking package holidays, by age, March 2021
- Private experience has become a more important motivator to book independently
- Increased competition from package holiday providers
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- Figure 39: Reasons for booking independent holidays, by age, March 2021
Attitudes towards Travel
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- Online advice and incentives to visit stores increasingly important
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- Figure 40: Attitudes towards travel agents, March 2021
- Younger travellers and families more likely to splash out on their main break
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- Figure 41: Attitudes towards holiday spending, by demographics, March 2021
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
- CHAID analysis methodology
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- Figure 42: Package vs Independent Holidays – CHAID – Table output, March 2021
- Figure 43: Attitudes towards travel agent advice, CHAID analysis, March 2021
Appendix – Central Forecast Methodology
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- Volume forecast and prediction intervals for overseas package holidays
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- Figure 44: Lower bound, central and upper bound forecast for the volume of overseas package holidays taken by UK residents (prepared on 28 May 2021), 2020-25
- Value forecast and prediction intervals for overseas package holidays
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- Figure 45: Lower bound, central and upper bound forecast for the value* of overseas package holidays taken by UK residents (prepared on 28 May 2021), 2020-25
- Volume forecast and prediction intervals for overseas independent holidays
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- Figure 46: Lower bound, central and upper bound forecast for the volume of overseas independent holidays taken by UK residents (prepared on 28 May 2021), 2020-25
- Value forecast and prediction intervals for overseas independent holidays
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- Figure 47: Lower bound, central and upper bound forecast for the value* of overseas independent holidays taken by UK residents (prepared on 28 May 2021), 2020-25
- Market drivers and assumptions
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- Figure 48: Key drivers affecting Mintel’s market forecast, 2020-24 (prepared 12 March 2021)
- Forecast methodology
Appendix – COVID Scenario Performance Methodology and Assumptions
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- Volume scenario performance for overseas package holidays
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- Figure 49: COVID-19 scenario forecasts for the volume of overseas package holidays taken by UK residents (prepared on 28 May 2021), 2020-25
- Value scenario performance for overseas package holidays
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- Figure 50: COVID-19 scenario forecasts for the value* of overseas package holidays taken by UK residents (prepared on 28 May 2021), 2020-25
- Volume scenario performance for overseas independent holidays
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- Figure 51: COVID-19 scenario forecasts for the volume of overseas independent holidays taken by UK residents (prepared on 28 May 2021), 2020-25
- Value scenario performance for overseas independent holidays
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- Figure 52: COVID-19 scenario forecasts for the value* of overseas independent holidays taken by UK residents (prepared on 28 May 2021), 2020-25
- Rapid COVID recovery, central and extended COVID disruption scenarios outline
- Scenario methodology
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