The past six years have been extremely tough for travel and tourism businesses. UK consumers spent only 4% more (at current prices) on holidays in 2014 than they did in 2008, despite the overall cost of living having risen 21% over that period. Profit margins, often thin in the industry even in good times, have been squeezed further. Travellers have become adept at shopping around both online and offline.
Socio-economic inequalities necessitate a broad segmentation of holiday products, budget, mid-range and luxury, but many holidaymakers also have higher than ever expectations, and there is growing demand for more upmarket versions of mass market products – the concept of affordable luxury is increasingly used across the industry.
This report explores key market drivers, discusses budget, mid-market, premiumisation and luxury trends across the market, and focuses on an in-depth analysis of the spending approaches of overseas package, independent and UK domestic holidaymakers. This is the first time Mintel has reported on this theme.
Definition
This report examines approaches to spending on domestic and overseas holidays taken by UK residents. These holidays must constitute a stay of at least one night and do not include business trips, visits to stay with friends and relatives or stays solely for events such as weddings or funerals.
An adult, for the purposes of Mintel’s research, is anyone aged 16 years old or over.
The standard travel and tourism definitions used in the terminology of this report are as follows:
Tourism is any travel, which involves an overnight stay away from home.
A holiday is a subjectively defined form of tourism, as defined by the tourist in response to surveys such as the IPS. A holiday can be distinguished from other leisure travel such as visits to friends and relatives (VFR) or shopping trips.
A long holiday is a holiday of four nights or more away from home; a short break is a holiday that involves one to three nights away from home.
Short-haul refers to air holidays within Europe, dominated by flights to Mediterranean resorts but including the Canaries, which are treated as a part of the Spanish market. Long-haul, therefore, refers to holidays outside Europe.
An inclusive tour, or ‘package holiday (also referred to in this report as ‘pure package’), is defined as the simultaneous sale of at least two elements of a holiday to the traveller: fares on public transport (eg flights) and commercial accommodation (eg hotel or self-catering apartment). Other elements, such as meals or excursions, are not essential to the definition of an inclusive tour. The term ‘all-inclusive’ is used to describe a special type of resort holiday in which food, drink, excursions and other services are provided as part of the total holiday cost.
An independent holiday is one in which the traveller organises and books transport and accommodation from separate sources (eg a Channel ferry crossing and a caravan site in France).
A dynamically packaged holiday or Flight-Plus holiday is a holiday in which individual components (eg flight, hotel and car hire) are put together from different suppliers, either via a high street travel agent or online travel intermediary.
Seat- or flight-only is a type of independent holiday, and the terms are used to denote holidays in which travellers only purchase a return fare and thereafter book their own accommodation, car hire etc.
In addition to quantitative consumer research, Mintel also conducted an online discussion group among a demographically mixed group of around 15 consumers.
This discussion group was asynchronous (ie not run in real time), functioning like a blog or bulletin board, with questions remaining posted for a pre-determined period of time. This method allows participants to respond reflectively, at their leisure, or to log off to think about any issues raised and return later to respond. Participants were recruited from GMI’s online consumer panel.
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