Holiday Review - UK - January 2018

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Slowdown in growth expected over the next few years
Figure 1: Forecast of total holiday market volume, 2012-22
Bright outlook for the domestic market
Figure 2: Forecast of domestic holiday market volume, 2012-22
Overseas volume finally surpasses a milestone but a slowdown is expected
Figure 3: Forecast of overseas holiday market volume, 2012-22
The consumer
A greater proportion of UK residents took a holiday in 2017
Figure 4: Destinations visited, November 2016 and December 2017
A reduction in city breaks on the cards?
Figure 5: Type of holidays taken, December 2017
How much was spent on consumers’ most expensive holidays?
Figure 6: Holiday spending, December 2017
All-inclusive products could prove popular as consumers look to manage their money
Figure 7: How most expensive holiday was booked – Package versus independent bookings, December 2017
Most holidaymakers save and pay in one go
Figure 8: How most expensive holiday was booked, December 2017
Consumers keen on holidays but will seek out cheaper destinations
Figure 9: Future plans for holidays, 2015-17
Long-haul versus short-haul holidays in 2018
Figure 10: Long-haul vs short-haul, December 2017
How are Brexit and the Open Skies Agreement affecting holidaymakers?
Figure 11: Holiday behaviours – Brexit, December 2017
What we think
ISSUES AND INSIGHTS
Holidaymakers could cut back on short city breaks in 2018
The facts
The implications
Will all-inclusive holiday products prove more popular in 2018?
The facts
The implications
How are holidaymakers paying for their trips?
The facts
The implications
The majority of 25-34s feel that Brexit will make it more difficult to holiday overseas
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
2017 was a good year for domestic travel
A possible return to staycations on the horizon
Slower growth, but overseas volume surpassed a milestone
Many will likely cut back on overseas short breaks in the low seasons
Inbound visits to the UK rise as the Pound remains low
Seniors are the most positive about their finances; likely to boost cruises
MARKET SIZE AND FORECAST
Slowdown in growth expected over the next few years
Figure 12: Total holiday market volume and value*, 2012-22
Figure 13: Forecast of total holiday market volume, 2012-22
Figure 14: Forecast of total holiday market value*, 2012-22
The domestic market; a return to staycations on the horizon?
Figure 15: Domestic holiday market volume and value* forecast, 2012-22
Figure 16: Forecast of domestic holiday market volume, 2012-22
Figure 17: Forecast of domestic holiday market value*, 2012-22
Overseas volume finally surpasses a milestone but a slowdown is expected
Figure 18: Overseas holiday market volume and value*, 2012-22
Figure 19: Forecast of overseas holiday market volume, 2012-22
Figure 20: Forecast of overseas holiday market value*, 2012-22
MARKET SEGMENTATION
Inbound visits to the UK rise as the Pound remains low
Figure 21: Inbound holiday volume from overseas residents to the UK, 2012-18
Top 10 destinations for UK visitors going abroad
Figure 22: Top 10 countries, 2015 versus 2016
Figure 23: Top 10 countries, H1 2016 versus H1 2017
All-inclusive deals could prove popular as consumers look to monitor their spending
Figure 24: UK overseas volume, package and independent holidays, 2012-17
Airlines: passenger growth forecast to slow over the next few years
Figure 25: Passenger numbers uplifted at UK airports, 2012-22
MARKET DRIVERS
Inflation curbs spending power
Figure 26: How consumers would describe their financial situation, November 2017
Figure 27: Trends in consumer sentiment for the coming year, by age, November 2017
Despite some concerns over finances, consumers still plan to book holidays
Figure 28: Plans to book a holiday in the next 3 months, June 2012-December 2017
Oil prices are rising which could limit cheap airfare offers
Figure 29: Europe Brent Spot Price FOB* (Dollars per Barrel), January 2014-18
Figure 30: US Gulf Coast Kerosene-Type Jet Fuel Spot Price FOB (Dollars per gallon), January 2014-18
The weak Pound makes holidaying overseas more expensive
Figure 31: Pound versus euro and US Dollar, April 2016-January 2018
LAUNCH ACTIVITY AND INNOVATION
Low-cost long-haul airlines
New app from Heritage Cities Group leverages the latest in augmented reality
Travelodge launches its premium economy SuperRooms
Hotelplan and Google partner to offer packages
Airbnb incorporates restaurant bookings
One-click payments can help boost chatbots
Lufthansa flight information is now searchable via Google Home
Snap’s new ad targeting
Skurt – An Uber-style car rental app that supplies fleet cars on demand
THE CONSUMER – WHAT YOU NEED TO KNOW
A greater proportion of UK residents took a holiday in 2017
A reduction in city breaks on the cards?
How much was spent on consumers’ most expensive holidays?
All-inclusive products could prove popular as consumers look to manage their money
How holidaymakers pay; credit card users tend to be older
Consumers keen on holidays but will seek out cheaper destinations
Attitudes towards Brexit and holidays
DESTINATIONS VISITED
A greater proportion of UK residents took a holiday in 2017
Figure 32: Destinations visited, November 2016 and December 2017
Who is taking holidays? A look at demographics
Figure 33: Destinations visited, by age, December 2017
Regional holiday habits
Figure 34: Destinations visited, by region, December 2017
Figure 35: Destinations visited, by socio-economic group, December 2017
The importance of family holidays for domestic tourism
Figure 36: Destinations visited, by presence of children, December 2017
Spain and Portugal see strong growth in UK visitors
Figure 37: Destinations visited, by country, November 2016 and December 2017
Figure 38: Overseas visits by UK residents, H1* 2016 versus H1 2017
25-34s far more likely than over-35s to visit France
Figure 39: Destinations visited, by age, December 2017
TYPES OF HOLIDAYS TAKEN 
A reduction in city breaks on the cards?
Figure 40: Type of holidays taken, December 2017
Figure 41: Type of holidays taken, by age, December 2017
Beach holiday market should remain stable
A focus on authenticity and what this means
Figure 42: Type of holidays taken, by age, December 2017
Cruise likely to weather any economic storms
Growth in domestic tourism could boost the camping and caravanning market
Figure 43: Type of holidays taken, by presence of children, December 2017
HOLIDAY SPENDING
How much was spent on consumers’ most expensive holidays?
Figure 44: Holiday spending, 2016 and 2017
Holiday spending – A look at demographics
Figure 45: Holiday spending, by presence of children, December 2017
Figure 46: Holiday spending, by age, December 2017
Even affluent consumers are feeling the squeeze
Figure 47: Holiday spending, by socio-economic group, December 2017
PACKAGE VERSUS INDEPENDENT BOOKINGS
45% of holidaymakers booked independently
Figure 48: How most expensive holiday was booked – Package versus independent bookings, December 2017
All-inclusive products could prove popular as consumers look to manage their money
Added expense for agents with the banning of card charges
HOLIDAY PAYMENTS 
Most holidaymakers save and pay in one go
Figure 49: How most expensive holiday was booked, December 2017
Holidaymakers who save and pay in one go
Figure 50: How most expensive holiday was booked, by presence of children, December 2017
Credit card users tend to be older
Figure 51: How most expensive holiday was booked, by age, December 2017
Figure 52: How most expensive holiday was booked, by socio-economic group, December 2017
Where do cryptocurrencies fit into the travel market?
FUTURE PLANS FOR HOLIDAYS 
Consumers keen on holidays but will seek out cheaper destinations
Figure 53: Future plans for holidays, 2015-17
As are naturally the most likely to spend but even they are not immune to economic pressures
Figure 54: Future plans for holidays, by age, December 2017
Figure 55: Future plans for holidays, by socio-economic group, December 2017
Airbnb could prove a cost-saving option for families
Figure 56: Future holiday plans, by presence of children, December 2017
Long-haul versus short-haul tips in 2018
Figure 57: Long-haul versus short-haul holidays, by volume, 2013-17
Figure 58: Long-haul vs short-haul, December 2017
Over-55s are important targets for the domestic market while younger consumers are more likely to travel long-haul
Figure 59: Long-haul vs short-haul, by age, December 2017
HOLIDAY BEHAVIOURS 
How are Brexit and the Open Skies Agreement affecting holidaymakers?
Figure 60: Holiday behaviours – Brexit, December 2017
The majority of 25-34s feel that Brexit will make it more difficult to holiday overseas
Figure 61: Holiday behaviours – Brexit, by age, December 2017
The high-profile collapse of Monarch makes some consumers uneasy
Figure 62: Holiday behaviours – Booking, December 2017
The safety of major cities concerns almost half of holidaymakers
Figure 63: Holiday behaviours, December 2017
CHAID ANALYSIS
Methodology
Parents of under-16s most likely to use a high street travel agent
Figure 64: Target groups based on statements about holidaying – CHAID – Tree output, December 2017
Figure 65: Target groups based on statements about holidaying – CHAID – Table output, December 2017
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
Definitions
APPENDIX – MARKET SIZE AND FORECAST
Forecast methodology
Figure 66: Best- and worst-case forecast for total holiday volume, 2017-22
Figure 67: Best- and worst-case forecast for total holiday value, 2017-22
Figure 68: Best- and worst-case forecast for domestic volume, 2017-22
Figure 69: Best- and worst-case forecast for domestic value, 2017-22
Figure 70: Best- and worst-case forecast for overseas volume, 2017-22
Figure 71: Best- and worst-case forecast for overseas value, 2016-21