Table of Contents
Overview
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- What you need to know
- Scope of the Report
Executive Summary
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- The market
- Growth opportunities for package holidays over the next two years
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- Figure 1: Forecast volume of UK overseas independent holidays, 2011-21
- Figure 2: Forecast volume of UK overseas package holidays, 2011-21
- The consumer
- Package and independent bookings remain the same
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- Figure 3: Package versus independent bookings, February 2017
- Perceived value is the main reason for booking a package
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- Figure 4: Reasons for booking holiday as a package, February 2017
- Value and flexibility the main driver of independent bookings
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- Figure 5: Reasons for booking holiday independently, February 2017
- Young and affluent want to have unique accommodation
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- Figure 6: Package holiday attitudes I, February 2017
- Consumers recognise all-inclusive can help manage their money
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- Figure 7: Package holiday attitudes II, February 2017
- What we think
Issues and Insights
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- All-inclusive deals likely to be even more popular going forward, but diversification is key
- The facts
- The implications
- Young and affluent want to have unique accommodation, but many feel that packages don’t offer this
- The facts
- The implications
- Customisation is key for younger consumers
- The facts
- The implications
- Customisation via B2C live chat messaging apps could help encourage younger consumers to book packages
- The facts
- The implications
The Market – What You Need to Know
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- 2015 and 2016 were strong growth years for packages
- Package market share is expected to grow over the next two years
- Cheaper airfares have fuelled independent bookings…
- …but package bookings likely to increase in market share with the launch of Ryanair Holidays
- Spain, Greece and France are the top pakcage destinations
Market Size and Forecast
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- Growth opportunities for package holidays over the next two years
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- Figure 8: Forecast of UK overseas volume, package and independent holidays, 2010-20
- Figure 9: Forecast volume of UK overseas independent holidays, 2011-21
- Figure 10: Forecast volume of UK overseas package holidays, 2011-21
- Figure 11: Forecast of UK overseas value*, package and independent holidays, 2010-20
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- Figure 12: Forecast value of UK overseas independent holidays, 2011-21
- Figure 13: Forecast value of UK overseas package holidays, 2011-21
- Brexit and the travel market
Market Segmentation
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- Cheaper airfares driving independent bookings
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- Figure 14: easyJet’s pay day notification
- Package bookings likely to increase in market share with the launch of Ryanair Holidays
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- Figure 15: Package versus independent overseas holidays, by transport method, 2010-16
- Spain, Greece and France are the top pakcage destinations
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- Figure 16: Top 20 destinations for Package Holidays , Q3 2015 to Q3 2016
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- Figure 17: UK Foreign Office travel advice for Turkey, March 2017
- Top 20 destinations for package bookings
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- Figure 18: Top 20 countries for package bookings, Q1-Q3 2015 versus Q1-Q3 2016
- Top 20 destinations for independent bookings
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- Figure 19: Top 20 countries for independent bookings, Q1-Q3 2015 versus Q1-Q3 2016
Market Drivers
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- Inflation rises while the Pound remains low
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- Figure 20: Pounds versus euro and US Dollar, March 2016-March 2017
- Oil is cheap compared to 2013/14 but has increased in price recently
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- Figure 21: Brent Crude Oil prices in US Dollars, 2013 average – January 2017 average
- Despite negativity surrounding Brexit, demand for holidays is still high
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- Figure 22: percentage of the UK population that plan to book a holiday in the next 3 months, January 2017
- Older consumers much more financially confident
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- Figure 23: Current financial situation, by age, January 2017
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- Figure 24: Consumer sentiment for the coming year, by age, January 2017
- Portugal, Bulgaria, and Spain are the cheapest holiday destinations
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- Figure 25: Post Office travel cost barometer 2017
Regulatory Changes
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- The Package Travel Directive
- How will Brexit affect the new Package Travel Directive?
- The falling pound means travel companies can impose surcharges
- Denied Boarding Regulation could be called into question
- Passenger protections in light of Brexit
Market Share
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- TUI and Jet2holidays enjoy double-digit growth
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- Figure 26: Passengers licensed under ATOL protection, by top 10 ATOL holders, 2011-17
Launch Activity and Innovation
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- Hotelplan and Google partner to offer packages
- Skyscanner and Finnair partner
- Inghams adds two new ski packages for the Easter 2017 break
- Music festival packages
The Consumer – What You Need to Know
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- Package and independent bookings remain the same
- Value is the main reason for booking a package
- Value and flexibly the main driver of independent bookings
- Young and affluent want to have unique accommodation
- Many consumers view package destinations as being too touristy
Package versus Independent Bookings
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- Package and independent bookings remain the same
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- Figure 27: Package versus independent bookings, February 2017
- Packages most popular amongst over-55s
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- Figure 28: Package versus independent bookings, by age, February 2017
- Beach breaks tend to be booked as packages, while city breaks tend to be independently booked
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- Figure 29: Holiday types taken in the last 12 months, by package versus independent bookings, February 2017
All-inclusive Packages
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- Two thirds of packages are all-inclusive
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- Figure 29: All-inclusive bookings, February 2017
- Plans for booking a package holiday in the future
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- Figure 30: Package holiday bookings in 2017, February 2017
Reasons for Booking a Package
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- Value is the main reason for booking a package
- The convenience of packages
- A quarter of consumers feel that packages offer greater financial protection
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- Figure 31: Reasons for booking holiday as a package, February 2017
- Reasons for Booking Independently
- Value and flexibly the main driver of independent bookings
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- Figure 32: Cheap flight email alerts form online flight aggregator and flight comparison site Skyscanner
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- Figure 33: Travel versus accommodation bookings, March 2017
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- Figure 34: Reasons for booking holiday independently, February 2017
Attitudes towards Package Bookings
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- Young and affluent want to have unique accommodation
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- Figure 35: Attitudes towards accommodation in package holidays, February 2017
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- Figure 36: Attitudes towards accommodation in package holidays, February 2017
- Many consumers see package destinations as too touristy
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- Figure 37: Attitudes towards accommodation in package holidays, February 2017
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- Figure 38: Package holiday attitudes I, February 2017
- Consumers recognise all-inclusive can help manage their money
- Customisation via business-to-customer live chat messaging apps
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- Figure 39: Attitudes towards access to a travel expert while on holidays, February 2017
- Airlines entering the package space
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- Figure 40: Package holiday attitudes II, February 2017
CHAID Analysis – Attitudes towards Package Bookings
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- Methodology
- Younger package bookers under-45 are the most receptive to B2C live chat/messaging…
- … and are more likely to book an all-inclusive deal because the weak Pound
- Affluent parents recognise that all-inclusive deals can be a good way to manage their spending
- Affluent consumers are more likely to think that more interesting/unique accommodation can be found by booking independently
- Package deals and ‘living like a local’ for city breakers
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- Figure 41: Target groups based on attitudes towards package and independent holidays – CHAID – Tree output, February 2017
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- Figure 42: Target groups based on attitudes towards package and independent holidays – CHAID – Table output, February 2017
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
- Travel and tourism definitions
Appendix – Market Size and Forecast Best- and Worst-case Forecast
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- Forecast methodology
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- Figure 43: Best- and worst-case forecast for independent volume, 2016-21
- Figure 44: Best- and worst-case forecast for Package volume, 2016-21
- Figure 45: Best- and worst-case forecast for Independent value, 2016-21
- Figure 46: Best- and worst-case forecast for Package value, 2016-21
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