Holidays - The Impact of Terrorism & Natural Disasters - UK - January 2006

INTRODUCTION
Definitions
Methodology
Consumer research
ACORN
 ABBREVIATIONS
PREMIER INSIGHT
New opportunities for the package market?
Time for a new international advisory body?
Responding and recovering
SUMMARY OF KEY REPORT FINDINGS
Resilient market
Demographic trends raise proportion of resilient travellers
Domestic holidays declining
Resilient overseas market overtakes domestic market
Long-haul market returning to growth despite catastrophes
Beach/resort holidays remain top, but are losing market share
New online operators erode traditional capacity
The trades take on catastrophes
Britons not easily put off visiting destinations…
…especially if they are discounted
MARKET FACTORS
Economic factors
Figure 1: GDP and PDI at 2000 prices plus interest rates, 2000-10
Consumer confidence
Socio-economic groups
Figure 2: Forecast adult population trends, by socio-economic group, 2000-10
Lifestage
Figure 3: Forecast adult population trends, by lifestage, 2000-10
Tourism and terrorism
Acts of nature
FCO advice
Rising oil prices
Figure 4: Crude oil prices, 2000-05
Exchange rates
Figure 5: Annual average exchange rates for Sterling against the euro and US Dollar, 2000-05
Increasing Internet usage and other technologies
Figure 6: Internet penetration, by gender, socio-economic group and age, 2000-05
Figure 7: Penetration of Internet technologies, 2003-05
Digital TV
TOTAL HOLIDAY MARKET
Figure 8: Domestic and overseas holiday volume, 2000-06
Multiple holidays becoming more common
Figure 9: Proportion of holidaymakers and number of holidays taken in the last 12 months, 2000-05
THE DOMESTIC HOLIDAY MARKET
7/7 suicide bombings
Holiday length of stay
Figure 10: Short versus long holidays, 2000-05
Number of holidays taken
Figure 11: Number of domestic holidays taken in the last 12 months, 2003-05
Domestic holidays by region
Figure 12: Area visited for last domestic holiday, 2000-05
Accommodation
Figure 13: Type of accommodation used for last domestic holiday, 2000-05
Transport
Figure 14: Main method of transport used for last domestic holiday, 2000-05
Seasonality
Figure 15: Month last domestic holiday began, 2000-05
THE OVERSEAS HOLIDAY MARKET
Figure 16: Overseas holidays and expenditure, at constant and current prices, 2000-06
Short versus long holidays
Figure 17: Short (1-3 nights) versus long holidays (4+ nights), by volume and value, 2000-06
Inclusive versus independent
Figure 18: Inclusive holidays versus independent holidays, by volume, 2000-06
Regions visited
Figure 19: Outbound holiday visits, by region visited, 2000-05
More holidays taken during the year
Figure 20: Number of holidays abroad taken in the last 12 months, 2003-05
Type of accommodation used
Figure 21: Type of accommodation used for last holiday abroad, 2000-05
Method of transport
Figure 22: Main method of transport used for last holiday abroad, 2000-05
Seasonality
Figure 23: Month last holiday abroad began, 2000-05
MARKET SEGMENTATION
Figure 24: Type of holiday taken in the past year, 2004 and 2005
Beach/resort holidays
City breaks
Camping and caravanning
Lake and mountains
Skiing/snowboarding
Figure 25: Market size, by volume and value, 2000/01-2004/05
Cruise
Figure 26: Passengers taking an ocean cruise, 2000-06
DISTRIBUTION
 DOMESTIC HOLIDAYS
Figure 27: How last domestic holiday was booked, 2000-05
Figure 28: Method used to book last domestic holiday, 2003-05
Figure 29: How last domestic holiday was booked, by booking method, 2005
 OVERSEAS HOLIDAYS
Figure 30: How last holiday abroad was booked, 2000-05
Figure 31: Method used to book last holiday abroad, 2003-05
Figure 32: How last holiday abroad was booked, by booking method, 2005
Commission cuts
Supermarkets’ foray into selling travel
THE SUPPLY STRUCTURE
 ATOLS ISSUED
Figure 33: Passengers licensed to top ten groups and companies, year to September 2001-05
 OPERATOR PROFILES
 TUI UK
General Profile
Financials
Figure 34: World of TUI, Northern Europe division, financial performance, 2001-05
Developments
Thomas Cook
General Profile
Financials
Figure 35: Thomas Cook AG and Thomas Cook UK, financial performance, 2000/01-2003/04
Developments
 MYTRAVEL
General profile
Financials
Figure 36: MyTravel Group plc, financial performance, 2000-05
Developments
 FIRST CHOICE HOLIDAYS PLC
General Profile
Financials
Figure 37: First Choice Holidays plc, group financial performance, 2000-05
Developments
 COSMOS GROUP OF COMPANIES
General profile
Developments
 EXPEDIA
Parent: Expedia Inc fully quoted
Figure 38: Expedia.com Ltd, financial performance, 2001-03
Figure 39: Ebookers, financial performance, 2000-2004
Figure 40: Excel Airways group, financial performance, 2003 and 2004
Figure 41: Gold Medal International, financial performance, 2000-04
THE CONSUMER
 TYPES OF HOLIDAYS TAKEN
Figure 42: Type of holiday taken in the past year, 2004 and 2005
 MULTIPLE HOLIDAYMAKING
Figure 43: Number of holidays taken, by the organisation of holiday, October 2005
Essential factors for an enjoyable holiday
Figure 44: Elements of an enjoyable holiday, 2000-05
Figure 45: Elements of an enjoyable holiday, by type of holiday taken, 2005
THE IMPACT OF TERRORISM AND NATURAL DISASTERS – AN INDUSTRY PERSPECTIVE
Terrorism – the least damage to tourism volume
Natural disasters
Price
Health scares
Repatriation
Foreign Office Advice
THE IMPACT OF TERRORISM AND NATURAL DISASTERS – A CONSUMER PERSPECTIVE
 DESTINATIONS AVOIDED
Figure 46: Destinations avoided due to terrorism, natural disasters or health scares, September 2005
Egypt
Figure 47: UK visits and spending in Egypt, 1995-2004
The United States
Figure 48: British residents’ arrivals and expenditure to the US, 1995-2004
The Middle East
Figure 49: British residents’ expenditure and visitor numbers to the Middle East, 1995-2004
London
Figure 50: Overseas arrivals in London, Q1 2003-Q3 2005
Turkey
Figure 51: British residents’ expenditure and visitor numbers to Turkey, 1995-2004
Thailand
Figure 52: British residents’ expenditure and visitor numbers in Thailand, 1995-2004
Indonesia
Figure 53: British residents’ expenditure and visitors number to Indonesia, 1995-2004
 DESTINATIONS AVOIDED BY ORGANISATION OF HOLIDAY
Package versus independent
Figure 54: Destinations avoided, by independent and package holidaymakers, September 2005
Short-haul versus long-haul
Figure 55: Destinations avoided, by short-haul and long-haul holidaymakers, September 2005
Destination avoided by type of holiday taken
Figure 56: Main destinations put off visiting by package holidaymakers, September 2005
Destinations avoided by factors that make an enjoyable holiday
Organisational elements
Figure 57: Main destinations put off visiting, by organisational factors that make an enjoyable holiday, September 2005
Destination elements
Figure 58: Main destinations put off visiting, by destinational factors that make an enjoyable holiday, September 2005
 ATTITUDES TOWARDS DISASTERS
Figure 59: Attitudes towards disasters, September 2005
The Cautious
Cautious attitudes by organisation of holiday
Independent versus package holidays
Figure 60: Agreement with cautious attitudes, by organisation of holiday taken in the past 12 months, September 2005
Short-haul versus long-haul
Figure 61: Agreement with the cautious attitudes, by type of package holiday taken in the past 12 months, September 2005
Cautious attitudes by destinations put off visiting
Figure 62: Main destinations put off visiting, by cautious attitudes, September 2005
The Resilient
Resilient attitudes by organisation of holiday
Independent versus package holidaymakers
Figure 63: Resilient attitudes, by type of independent holiday taken in the past 12 months, September 2005
Short-haul versus long-haul
Figure 64: Resilient attitudes, by type of independent holiday taken in the past 12 months, September 2005
Resilient attitudes by destinations put off visiting
Figure 65: Main destinations put off visiting, by resilient attitudes, September 2005
 ARE TOURISTS BECOMING MORE RESISTANT?
Figure 66: Whether tourists are more resistant towards terrorism and natural disasters, September 2005
Changing attitudes by organisation of holiday
Package versus independent
Figure 67: Whether tourist are more resistant towards terrorism and natural disasters, package versus independent holidays, September 2005
Short-haul versus long-haul
Figure 68: Whether tourists are more resistant towards terrorism and natural disasters, long-haul versus short-haul, September 2005
Changing attitudes by destinations avoided
Figure 69: Whether tourists are more resistant towards terrorism and natural disasters, by destinations avoided, September 2005
Resistant towards terrorism and natural disasters by cautious and resilient attitudes
Cautious attitudes
Figure 70: Whether tourists are more resistant towards terrorism and natural disasters, by cautious attitudes, September 2005
Resilient attitudes
Figure 71: Whether tourists are more resistant towards terrorism and natural disasters, by resilient attitudes, September 2005
 THE IMPACT OF DISCOUNTING
Figure 72: The impact of discounting at destinations affected by terrorism and natural disasters, September 2005
The impact of discounting by organisation of holiday
Figure 73: The impact of discounting at destinations affected by terrorism and natural disasters, independent versus package holdiays, September 2005
Figure 74: The impact of discounting at destinations affected by terrorism and natural disasters, short-haul versus long-haul, September 2005
The impact of discounting by destinations avoided
Figure 75: The impact of discounting at destinations affected by terrorism and natural disasters, by destinations avoided, September 2005
The impact of discounting by cautious attitudes
Figure 76: The impact of discounting at destinations affected by terrorism and natural disasters, by cautious attitudes, September 2005
The impact of discounting by resilient attitudes
Figure 77: The impact of discounting at destinations affected by terrorism and natural disasters, by resilient attitudes, September 2005
 CONSUMER TARGET GROUPS
Tenacious Travellers (37% of the population) 18.3 million adults
Placid Travellers (28% of the population) 13.8 million adults
Terror-stricken Travellers (35% of the population) 17.3 million adults
Figure 78: Target groups, by gender, age, socio-economic group, working and marital status, September 2005
Figure 79: Target groups, by region and ACORN group, September 2005
Figure 80: Target groups, by detailed lifestage groups, September 2005
Figure 81: Target groups, by daily and Sunday newspaper readership and supermarket usage, September 2005
Target groups by organisation of holiday
Figure 82: Target groups, by location organisation of holiday, September 2005
Target groups by type of holiday taken
Figure 83: Types of holidays taken, by typology, September 2005
Target groups by what makes an enjoyable holiday
Figure 84: Target groups, by what factors make an enjoyable holiday, September 2005
Target groups by countries avoided
Figure 85: Target groups, by countries avoided, September 2005
DETAILED DEMOGRAPHICS
 TYPES OF HOLIDAY TAKEN
Figure 86: Types of holiday, by gender, age, socio-economic group, working and marital status, September 2005
Figure 87: Types of holiday, by region and ACORN group, September 2005
Figure 88: Types of holiday, by detailed lifestage groups, September 2005
Figure 89: Types of holiday, by daily and Sunday newspaper readership, grocery storesupermarket usage and commercial TV viewing, September 2005
 DESTINATIONS PUT OFF VISITING
Figure 90: Main destinations put off visiting, by gender, age, socio-economic group, working and marital status, September 2005
Figure 91: Main destinations put off visiting, by region and ACORN group, September 2005
Figure 92: Main destinations put off visiting, by detailed lifestage groups, September 2005
Figure 93: Main destinations put off visiting, by daily and Sunday newspaper readership, supermarket usage and commercial TV viewing, September 2005
Figure 94: Other destinations put off visiting, by gender, age, socio-economic group, working and marital status, September 2005
Figure 95: Other destinations put off visiting, by region and ACORN group, September 2005
Figure 96: Other destinations put off visiting, by detailed lifestage groups, September 2005
Figure 97: Other destinations put off visiting, by daily and Sunday newspaper readership, supermarket usage, September 2005
 CAUTIOUS ATTITUDES
Figure 98: Penetration of cautious attitudes, by gender, age, socio-economic group, working and marital status, September 2005
Figure 99: Penetration of cautious attitudes, by region and ACORN group, September 2005
Figure 100: Penetration of cautious attitudes, by detailed lifestage groups, September 2005
Figure 101: Penetration of cautious attitudes, by daily and Sunday newspaper readership, supermarket usage and commercial TV viewing, September 2005
 RESILIENT ATTITUDES
Figure 102: Penetration of cautious attitudes, by gender, age, socio-economic group, working and marital status, September 2005
Figure 103: Penetration of cautious attitudes, by region and ACORN group, September 2005
Figure 104: Penetration of cautious attitudes, by detailed lifestage groups, September 2005
Figure 105: Penetration of cautious attitudes, by daily and Sunday newspaper readership, supermarket usage and commercial TV viewing, September 2005
 CHANGING ATTITUDES
Figure 106: Whether tourists are more resistant towards terrorism and natural disasters: response, by gender, age, socio-economic group, working and marital status, September 2005
Figure 107: Whether tourists are more resistant towards terrorism and natural disasters: Response, by region and ACORN group, September 2005
Figure 108: Whether tourists are more resistant towards terrorism and natural disasters: Response, by detailed lifestage groups, September 2005
Figure 109: Whether tourists are more resistant towards terrorism and natural disasters: Response, by daily and Sunday newspaper readership, supermarket usage and commercial TV viewing, September 2005
 ATTITUDES TOWARDS DISCOUNTING
Figure 110: Attitudes towards price discounts, by gender, age, socio-economic group, working status, September 2005
Figure 111: Attitudes towards price discounts, by region and ACORN group, September 2005
Figure 112: Attitudes towards price discounts, by detailed lifestage groups, September 2005
Figure 113: Attitudes to price discounts, by daily and Sunday newspaper readership, supermarket usage and commercial TV viewing, September 2005
Figure 114: Target groups, by attitudes towards terrorism and natural disasters, September 2005
Figure 115: Target groups, by resistance to terrorism and natural disasters, September 2005
Figure 116: The impact of discounting at destinations affected by terrorism and natural disasters, by target groups, September 2005
THE FUTURE
Short-term uncertainties but long-term growth
Bird flu
More guidance
Return to package?
Trends
FORECAST
 EXPENDITURE AND OVERSEAS TRIPS CONTINUE TO GROW
Figure 117: Forecast of expenditure on overseas holidays, volume and value 2005-10
Short versus long holidays
Figure 118: Forecast for long versus short breaks by volume, 2005-10
Inclusive versus independent holidays
Figure 119: Forecast of inclusive volume versus independent holidays by volume, 2005-10
 SCENARIO-BASED FORECAST
Scenario 1 – static
Figure 120: Static demographic forecast on the outlook of holiday destinations forecast, 2005-10
Scenario 2 – travellers are becoming more ‘hardened’ to terror-stricken destinations
Figure 121: Positive change in demographic outlook on holiday destinations forecast, 2005-10
Scenario 3 – travellers lose confidence
Figure 122: Negative change in demographic outlook on holiday destinations forecast, 2005-10
Figure 123: Demographic breakdown of consumer typologies, 2005
 FACTORS USED IN THE FORECAST