Package vs Independent Holidays - UK - May 2011

INTRODUCTION
Definition
Abbreviations
EXECUTIVE SUMMARY
 THE MARKET
Figure 1: Package holidays market volume size and forecast 2005-15
Figure 2: Independent Holidays market volume size and forecast 2005-15
Impact of recession
All-inclusive boost
Squeeze to continue
Market factors
Overseas holidays hit hardest
AB/C2 growth boosts potential demand
Pound recovery could stimulate overseas holidays
Companies, brands and innovation
Higher margin strategy
First Choice goes all-inclusive
Independent share grows
easyjet’s challenge to ‘big two’
Rebranding Benidorm
The consumer
Figure 3: Overseas holidays taken in the last 12 months, April 2011
Package penetration half that of independent
C2DE package enthusiasm
Independent holidays rise sharply with income
Figure 4: Attitudes towards package holidays, April 2011
Time-saving advantages
Financial protection a live issue
Too samey, too many Brits
Figure 5: Attitudes towards independent holidays, April 2011
Freedom, flexibility, choice
Direct booking preferred
Independent hassles
What we think
ISSUES IN THE MARKET
The package share of the overall holiday market has increased for the first time in over a decade. Could this herald a revival?
What are the implications of the government’s proposed ATOL (financial protection) reforms for the travel trade and the consumer?
What effect is the growth of all-inclusive package holidays likely to have on the market?
In what product areas can package holidays avoid competition from independent travel?
How can package and independent holidays benefit from growth in the retired population over the next few years?
FUTURE OPPORTUNITIES
Trend: Life Coaching
Trend: Evolving Media
INTERNAL MARKET ENVIRONMENT
Key points
Market conditions still weak
Figure 6: Domestic and overseas holiday volume, 2005-10
Figure 7: Domestic and overseas holidays expenditure, 2005-10
Mixed fortunes
Figure 8: Scheduled passengers carried by main low-cost airlines, 2006-10
Figure 9: comparison of passenger growth across selected uk airlines 2008-10
Price of failure
Figure 10: ATOL tour operator failures/closures in the UK in the year to 1 may 2011
Flight-plus changes
Holiday costs fall in Spain
Figure 11: Holiday resort costs 2011
BROADER MARKET ENVIRONMENT
Key points
Confidence low as incomes fall
Figure 12: GDP quarterly percentage change, Q1 2004-Q1 2011
Figure 13: UK consumer confidence index, May 2010-April 2011
Growth in families with kids 5-9
Figure 14: Trends in the age structure of the UK population, 2005-15
Figure 15: Forecast adult population trends, by lifestage, 2005-15
AB/C2 polarity
Figure 16: Forecast adult population trends, by socio-economic group, 2005-15
Oil on troubled waters
Figure 17: Crude oil prices, 2005-11
Pound stays weak
Figure 18: Annual average exchange rates for sterling, 2007-11
COMPETITIVE CONTEXT
Key points
Holidays hit hardest
Figure 19: Market size trends 2005-10, for selected activities, 2005-10
Downsized treats
Figure 20: Trends in what extra money is spent on November 2009-February 2011
STRENGTHS AND WEAKNESSES IN THE MARKET
Strengths
Safety first
Unfamiliar suits packages
Hassle free
All-inclusive growth
Independent freedoms
Weaknesses
Consumer spending power remains weak
Cookie-cutter packages
Packages considered too expensive
Travel trade independent doubts
Travel information overload
WHO’S INNOVATING?
Key points
100% all-inclusive
Easy challenge
Halal Holidays
Costa del Cool
Smart thinking
MARKET SIZE AND FORECAST
Key points
Past and present
Figure 21: Volume of overseas package and independent holidays 2005-15
Figure 22: Expenditure on overseas package and independent holidays 2005-15*
Figure 23: Average expenditure on overseas package and independent holidays 2005-10*
The Future
Figure 24: Package holidays market volume size and forecast 2005-15
Figure 25: Package holidays market value size and forecast 2005-15*
Figure 26: Independent holidays market volume size and forecast 2005-15
Figure 27: Independent holidays market value size and forecast 2005-15*
Forecast methodology
SEGMENT PERFORMANCE
Key points
Package strengths beyond Europe
Figure 28: Overseas package and independent holidays by region, 2005-10
Turkey triumphs
Figure 29: Top 10 package holiday short-haul destinations by number of visits, 2005-10
Mexican wave
Figure 30: Top 10 Package holiday long haul destinations, by number of visits, 2005-10
Shorter holidays
Figure 31: Average overseas package and independent holiday duration, 2005-09
Package costs outweigh independent
Figure 32: Total amount spent on holidays* (for self and family) in the last 12 months (excluding spending money), 2010
Figure 33: Total amount spent on short breaks* (for self and family) in the last 12 months (excluding spending money), 2010
Time away
Figure 34: Time spent away on holidays/short breaks in the last 12 months, 2010
Accommodation differences
Figure 35: Accommodation for holidays/short breaks taken in the last 12 months, 2010
Independent diversity
Figure 36: Types of holidays/short breaks taken in the last 12 months, 2010
MARKET SHARE
Key points
Figure 37: UK tour operators ranked by atol passenger licenses, May 2011
Bricks & clicks for big two
Figure 38: Most visited UK travel websites, 23 March 2011
COMPANIES AND PRODUCTS
Cosmos/Monarch
Figure 39: Key financials for Cosmos Holidays PIc, 2008-09
Expedia
Figure 40: Key financials for Expedia.com Limited UK, 2008-09
Lastminute.com
Olympic Holidays (Travelworld Vacations Ltd)
Saga Holidays
Figure 41: Key financials for Acromas Holidays Limited, 2009-10
Thomas Cook
Figure 42: Key financials for Thomas Cook Group Plc – UK & Ireland, India and Middle East segment, 2009-10
Travelrepublic.co.uk
Figure 43: Key financials for Travel Republic Limited, 2009-10
TripAdvisor
Figure 44: Key financials for TripAdvisor Limited, 2009
TUI
Figure 45: Key financials for TUI Plc – UK & Ireland market, 2009-10
Virgin Holidays
Figure 46: Key financials for Virgin Holidays Limited, 2009-10
CHANNELS TO MARKET
Key points
Viral independents
Figure 47: Research sources used for holidays/short breaks taken in the last 12 months
High street resilience
Figure 48: Booking methods used for holidays/short breaks taken in the last 12 months
HOLIDAYS TAKEN
Key points
Figure 49: Holidays taken in the last 12 months, April 2011
Cross-class package appeal
IMPORTANT HOLIDAY FACTORS
Key points
Figure 50: Important holiday factors, April 2011
We’re all gastro-tourists now
Package versus independent holiday factors
Flavour of the destination
City excites under-35s and over-55s
Female bookworms
ATTITUDES TOWARDS PACKAGE HOLIDAYS
Key points
Figure 51: Attitudes towards package holidays, April 2011
Life in the old package
Same old, same old
Different class
Figure 52: Attitudes towards package holidays by socio-economic group, April 2011
Family concern
Inclusive and tailor-made packages
ATTITUDES TOWARDS INDEPENDENT HOLIDAYS
Key points
Figure 53: Attitudes towards independent holidays, April 2011
Road to freedom
Information overload
Independent ethics
Aviation-avoiders
TARGETING OPPORTUNITIES
Key points
Target groups
Figure 54: Package versus independent holidays target groups, May 2011
Package Lovers
Demographic profile
Marketing message
Independently Minded
Demographic profile
Marketing message
Independent With Doubts
Demographic profile
Marketing message
Indifferent
Demographic profile
Marketing message
APPENDIX – HOLIDAYS TAKEN
Figure 55: Most popular holidays taken in the last 12 months, by demographics, April 2011
Figure 56: Next most popular holidays taken in the last 12 months by demographics, April 2011
Figure 57: Other holidays taken in the last 12 months by demographics, April 2011
APPENDIX – IMPORTANT HOLIDAY FACTORS
Figure 58: Important holiday factors, by most popular holidays taken in the last 12 months, April 2011
Figure 59: Important holiday factors, by next most popular holidays taken in the last 12 months, April 2011
Figure 60: Important holiday factors by other holidays, taken in the last 12 months, April 2011
Figure 61: Most popular important holiday factors, by demographics, April 2011
Figure 62: Next most popular important holiday factors by demographics, April 2011
Figure 63: Other important holiday factors, by demographics, April 2011
Figure 64: Least popular important holiday factors, by demographics, April 2011
APPENDIX – ATTITUDES TOWARDS PACKAGE HOLIDAYS
Figure 65: Attitudes towards package holidays, by most popular holidays taken in the last 12 months, April 2011
Figure 66: Attitudes towards package holidays by next most popular holidays taken in the last 12 months, April 2011
Figure 67: Attitudes towards package holidays, by other holidays taken in the last 12 months, April 2011
Figure 68: Attitudes towards package holidays, by most popular important holiday factors, April 2011
Figure 69: Attitudes towards package holidays, by next most popular important holiday factors, April 2011
Figure 70: Attitudes towards package holidays, by other important holiday factors, April 2011
Figure 71: Attitudes towards package holidays, by least popular important holiday factors, April 2011
Figure 72: Attitudes towards package holidays, by demographics, April 2011
Figure 73: Further attitudes towards package holidays, by demographics, April 2011
Figure 74: Further attitudes (continued) to package holidays by demographics, April 2011
APPENDIX – ATTITUDES TOWARDS INDEPENDENT HOLIDAYS
Figure 75: Attitudes towards independent holidays, by most popular holidays taken in the last 12 months, April 2011
Figure 76: Attitudes towards independent holidays, by next most popular holidays taken in the last 12 months, April 2011
Figure 77: Attitudes towards independent holidays, by other holidays taken in the last 12 months, April 2011
Figure 78: Attitudes towards independent holidays, by most popular important holiday factors, April 2011
Figure 79: Attitudes to independent holidays by next most popular important holiday factors, April 2011
Figure 80: Attitudes to independent holidays by other important holiday factors, April 2011
Figure 81: Attitudes to independent holidays by least popular important holiday factors, April 2011
Figure 82: Attitudes towards independent holidays, by demographics, April 2011
Figure 83: Further attitudes towards independent holidays, by demographics, April 2011
Figure 84: Further attitudes (continued) towards independent holidays, by demographics, April 2011
APPENDIX – TARGETING OPPORTUNITIES
Figure 85: Holidays taken in the last 12 months, by target groups, April 2011
Figure 86: Important holiday factors, by target groups, April 2011
Figure 87: Attitudes towards package holidays, by target groups, April 2011
Figure 88: Attitudes towards independent holidays, by target groups, April 2011
Figure 89: Target groups, by demographics, April 2011