British Travel Patterns - SETE library...outbound travel was observed in each year, with the exception of 1985 and 1991. Outbound travel from the UK even increased in 2001 and 2002

© Tourism Intelligence International

How the British Will Travel 2010 63

British Travel Patterns

The UK travel market abroad is estimated to be around 64.1 million travellers and ranks third in the world in terms of tourism spending (£30.3 billion in 2004). Tourism Intelligence International estimates that British travellers will take 37.1 million trips abroad and spend £35.5 billion abroad in 2010.

The UK generates 64 million travellers

The British preference for holidaying abroad has increased by leaps and bounds. In 1965 only 14.3% of British residents travelled abroad and 85.7% took holidays within the United Kingdom.

Between 1983 and 2004, the number of visits UK residents made abroad tripled, from 21.0 million to 64.1 million. Since 1983 a growth in British outbound travel was observed in each year, with the exception of 1985 and 1991. Outbound travel from the UK even increased in 2001 and 2002 in spite of the 9/11 events and subsequent hostilities in Afghanistan.

Number of trips abroad has tripled

Under the new statistical series, the share of British residents opting to travel abroad has been recalculated and currently amounts to an estimated 50.1% as at 2003.

Growth in the short-break market is far outstripping growth in day trips and long holidays. The British mainly travel by air, and June, July, August and September are the main months of travel. There is a growing preference for villa or rental accommodation at the expense of hotel accommodation.

There is strong growth in the short-break market

The British stay the longest – an average of 48 days – in Australia and New Zealand – and (amongst reporting countries) spend the most in Switzerland, £73 per day, followed by France, Japan, and the USA.

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© Tourism Intelligence International 3: British Travel Patterns

How the British Will Travel 2010

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3.1 Travel Market Growth

In 1970, there were less than 10 million British travellers abroad. By 1980, there were 17.5 million British travellers abroad, including 12 million holiday visits abroad lasting a minimum of five days. In 1990, there were over 30 million British travellers abroad, including 20.5 million 4+ night holiday visits. By 2004, these figures had risen to 64.1 million visits abroad, including some 33.6 million holiday visits of 4+ nights (see Table 3.1).

64.1 million visit abroad in 2004

Table 3.1 The British Holiday Travel Market, 1970-2010

Year

Travellers Abroad

(thousands)

Number of trips Abroad (4+

Night Holidays) (millions)

1970 8,341 5.8 1971 9,332 7.3 1972 10,573 8.5 1973 11,523 8.3 1974 10,489 6.8 1975 11,578 8.0 1976 11,560 7.3 1977 11,525 7.8 1978 13,444 9.0 1979 15,466 10.3 1980 17,507 12.0 1981 19,047 13.3 1982 20,311 14.3 1983 20,995 14.5 1984 22,072 15.5 1985 21,610 15.8 1986 24,948 17.5 1987 27,446 20.0 1988 28,829 20.3 1989 31,030 21.0 1990 31,148 20.5 1991 30,808 20.0 1992 33,836 21.8 1993 36,720 23.5 1994 39,629 26.3 1995 41,345 26.0 1996 42,050 23.3 1997 45,957 27.3

3: British Travel Patterns © Tourism Intelligence International


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Year

Travellers Abroad

(thousands)

Number of trips Abroad (4+

Night Holidays) (millions)

1998 50,872 26.9 1999 53,881 29.2 2000 56,837 30.8 2001 58,281 32.0 2002 59,377 32.8 2003 61,424 33.6 2004 64,100 34.3 2005 65,870 34.9 2006 67,462 35.4 2007 68,896 35.9 2008 70,186 36.4 2009 71,347 36.8 2010 72,391 37.1

Note: due to changes in the International Passenger Survey sampling methodology introduced in 1999, care should be taken when comparing results for 1999 to 2002 with those for earlier years. Sources: Travel Trends (several issues), Office for National Statistics Figures for 2005-2010 are forecasts from Tourism Intelligence International, 2004 Since 1991, there has been a consistent increase in the number of British travellers. By 2004, 64.1 million British travelled abroad. The number of British travelling abroad between 1993 and 2003 increased by 67.3%, representing an average annual growth rate of 5.28 per cent. The year 1998 represented the strongest 12 months of growth since 1993. The growth rate in subsequent years (1999-2003) has decelerated but has still maintained an upward trend. In 1998, there was a slight decline in the number of 4+ night trips taken (in favour of the shorter trips), but growth resumed in subsequent years, albeit modestly.

In 2005, there will be 65.87 million British travellers abroad, producing 34.9 million 4+ night holiday visits, estimates Tourism Intelligence International. By 2010, there will be 72.39 million British travellers abroad, producing 37.1 million 4+ night holiday visits (see Table 3.1).

65.87 million travellers in 2005

3.2 Growth in Holidays Abroad

Taking holidays abroad is a firmly established priority for most British consumers. Having a good holiday is the most important spending priority for the UK consumer, according to Mintel’s Annual Lifestyles Survey. Research

Taking holidays abroad is a priority



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conducted among 2,000 people in Britain revealed that travel topped the list of spending plans (46%), followed by buying a new car (38%), decorating/minor home improvements (38%) and purchasing something for the home (37%). Holidays were the second most important factor in people’s lifestyles after home ownership, and were considered essential rather than a luxury commodity, according to the British Lifestyles 2000 Report. The British preference for holidaying abroad has increased enormously over the past four decades. In 1965, only 14.3% of British residents travelled abroad and 85.7% took holidays within the United Kingdom (see Table 3.2).

Preference for holidaying abroad has increased

By 1985, the number of holiday trips taken by British residents abroad had tripled, with holidays abroad representing nearly one third (32.3%) of all holidays taken. In 1998, approximately half of all 4+ night holiday trips taken were taken abroad. Under the new statistical series, the share of British residents opting to travel abroad has been recalculated and currently amounts to an estimated 50.1% as at 2003.

Table 3.2 Foreign and Domestic Travel Compared, 1965-2003

Year No. of 4+ Night Holidays % Share Domestic Abroad Domestic Abroad

1965 30.0 5.0 85.7% 14.3% 1966 31.0 5.5 84.9% 15.1% 1967 30.0 5.0 85.7% 14.3% 1968 30.0 5.0 85.7% 14.3% 1969 30.5 5.8 84.0% 16.0% 1970 34.5 5.8 85.6% 14.4% 1971 34.0 7.3 82.3% 17.7% 1972 37.5 8.5 81.5% 18.5% 1973 40.5 8.3 83.0% 17.0% 1974 40.5 6.8 85.6% 14.4% 1975 40.0 8.0 83.3% 16.7% 1976 37.5 7.3 83.7% 16.3% 1977 36.0 7.8 82.2% 17.8% 1978 39.0 9.0 81.3% 18.8% 1979 38.5 10.3 78.9% 21.1% 1980 36.5 12.0 75.3% 24.7% 1981 36.5 13.3 73.3% 26.7%



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Year No. of 4+ Night Holidays % Share Domestic Abroad Domestic Abroad

1982 32.5 14.3 69.4% 30.6% 1983 33.5 14.5 69.8% 30.2% 1984 34.0 15.5 68.7% 31.3% 1985 33.0 15.8 67.6% 32.4% 1986 31.5 17.5 64.3% 35.7% 1987 28.5 20.0 58.8% 41.2% 1988 33.5 20.3 62.3% 37.7% 1989 31.5 21.0 60.0% 40.0% 1990 32.5 20.5 61.3% 38.7% 1991 34.0 20.0 63.0% 37.0% 1992 32.0 21.8 59.5% 40.5% 1993 32.5 23.5 58.0% 42.0% 1994 31.5 26.3 54.5% 45.5% 1995 33.0 26.0 55.9% 44.1% 1996 30.5 23.3 56.7% 43.3% 1997 30.0 27.3 52.4% 47.6% 1998 27.0 29.3 48.0% 52.0% 1999 29.2 2000 38.8 30.8 55.7% 44.3% 2001 37.4 32.0 53.9% 46.1% 2002 37.2 32.8 53.1% 46.9% 2003 33.6 33.8 49.9% 50.1%

* new series; data not comparable with that for earlier years ** provisional Sources: Travel Trends (several issues), Office for National Statistics 1999-2003: UK Tourism Facts (Star UK, Department for Culture, Media and Sport), 2003. As Figure 3.3 shows, the number of British travellers who have taken holidays abroad has increased consistently since 1965. There has been a near consistent trend towards an increase in travel abroad at the expense of domestic tourism.



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Figure 3.3 Foreign vs. Domestic Travel (million)

Sources: Travel Trends (several issues), Office for National Statistics1999-2003: UK Tourism Facts (Star UK, Department for Culture, Media and Sport), 2003. A similar trend has been observed with respect to expenditure on holidays abroad. Compared with holidays spent within the UK, expenditure on holidays abroad has far outstripped holidays taken within the UK. However, under the new statistical series introduced in 1999, there has been a substantial upward revision in the estimates for expenditure on domestic travel.

Figure 3.4 Expenditure on Foreign vs. Domestic Travel (£ million)

Sources: Travel Trends (several issues), Office for National Statistics 1999-2003: UK Tourism Facts (Star UK, Department for Culture, Media and Sport), 2003.



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British expenditure on holidays abroad has increased every year since 1965, with the exception of 1974 (oil crisis) and 1996 (financial crisis) where expenditure was reduced by £130 million (US$215.8 million) in 1974 and £700 million (US$1,162 million) in 1996. The oil crisis (1973/74) and world economic recession (1995/96) did have an impact on British travel abroad.

By 1998, 80.5% of expenditure was spent abroad and 19.5% spent within the UK. In 2003, the British spent a total of £28.6 billion on travel abroad and £16.2 billion (calculated under a new statistical series) on travel within the UK (see Table 3.5).

The British spent £28.6 billion on travel abroad in 2003

Table 3.5 Expenditure on Foreign and Domestic Travel Compared, 1965 to 2003

Year Expenditure (£ million) % Share Domestic Abroad Domestic Abroad

1965 460 265 63.4% 36.6% 1966 550 320 63.2% 36.8% 1967 560 300 65.1% 34.9% 1968 470 320 59.5% 40.5% 1969 600 390 60.6% 39.4% 1970 790 470 62.7% 37.3% 1971 810 630 56.3% 43.8% 1972 920 830 52.6% 47.4% 1973 870 1974 1,100 740 59.8% 40.2% 1975 1,270 1,080 54.0% 46.0% 1976 1,460 1,210 54.7% 45.3% 1977 1,570 1,360 53.6% 46.4% 1978 1,700 1,860 47.8% 52.2% 1979 2,380 2,570 48.1% 51.9% 1980 2,420 3,510 40.8% 59.2% 1981 2,710 4,320 38.5% 61.5% 1982 2,500 4,730 34.6% 65.4% 1983 2,640 5,000 34.6% 65.4% 1984 2,970 5,560 34.8% 65.2% 1985 3,080 6,140 33.4% 66.6% 1986 3,050 6,740 31.2% 68.8% 1987 3,100 8,500 26.7% 73.3% 1988 3,740 9,140 29.0% 71.0% 1989 3,820 10,150 27.3% 72.7% 1990 4,140 10,640 28.0% 72.0%



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Year Expenditure (£ million) % Share Domestic Abroad Domestic Abroad

1991 4,670 11,310 29.2% 70.8% 1992 4,450 12,220 26.7% 73.3% 1993 4,580 13,410 25.5% 74.5% 1994 4,620 15,140 23.4% 76.6% 1995 4,880 15,580 23.9% 76.1% 1996 4,830 14,880 24.5% 75.5% 1997 4,810 17,220 21.8% 78.2% 1998 19,489 1999 22,020 2000 16,494 24,251 40.5% 59.5% 2001 17,016 25,332 40.2% 59.8% 2002 17,352 26,962 39.2% 60.8% 2003 16,174 28,550 36.2% 63.8%

* new series; data not comparable with that for earlier years ** provisional Sources: Travel Trends (several issues), Office for National Statistics 1999-2003: UK Tourism Facts (Star UK, Department for Culture, Media and Sport), 2003. 3.3 Main and Additional Holiday Trips

With four to six weeks of paid holidays annually, the British are able to take more than one holiday per year. Approximately two thirds of British residents take at least one holiday abroad and approximately one third do not take a holiday abroad. In 1984, 60% of all British residents took at least one holiday abroad and 39% did not take a holiday abroad. In 2003, this did not change significantly.

The British have four to six weeks holiday

It is interesting to observe that one fifth of all British residents took at least two holidays abroad in 1984, and by 1998 one quarter of British travellers took at least two holidays abroad. The data show that, while the proportion of those taking holidays abroad has remained relatively constant over the 1984–2003 period, the frequency of trip-taking has increased. This can be explained by the growing popularity of short breaks.

3.4 Day Trips, Short Breaks and Long Holidays

In 2003, 3% of all UK residents’ visits abroad was for day trips. Another 15% of all visits abroad were for short breaks of between one and three nights (see Figure 3.6). But the majority of

Almost three quarters of British residents take long holidays



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UK residents’ visits abroad (82%) were long holidays (trips of at least four nights). Long holidays include both short- and long-haul trips. British holiday-makers take long holidays in short-haul destinations (e.g. Spain and France) as well as in long-haul trips (to Australia, Barbados, South Africa and Thailand). Figure 3.6 UK Residents’ Holiday Visits Abroad by Length of Stay, 2003

Day Trips3% Short Break

15%

Long Holidays82%

Source: Travel Trends 2003, Office for National Statistics The percentage share in the number of day trips abroad taken by UK residents fluctuated between 8.3% in 1994, 10.3% in 1998 and 3.2% in 2003. As the working environment has become more competitive and jobs less secure, and as more and more partners are also working, there has been pressure to take rather shorter holidays, but more frequently. The long-haul share has remained fairly stable moving from 83.3% in 1998 to 82% in 2003 (see Table 3.7).

An emerging trend for British residents is taking shorter but more frequent holidays



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Table 3.7 UK Residents’ Holiday Visits Abroad by Length of Stay, 1998-2003

% Share Year Day Trips

Short Breaks Long Holidays

1998 1999 2000 2001 2002 2003

5.2 4.3 3.3 3.4 3.3 3.2

11.5 12.3 12.7 13.7 14.4 15.8

83.3 83.4 84.0 82.9 82.3 82.0

Source: Travel Trends 2003, Office for National Statistics 3.5 Short-haul vs Long-haul

The short-haul market accounts for the major share (84.6%) of UK outbound travellers, with the long-haul market accounting for 15.4% in 2003 (see Table 3.8). Some 35 million British travellers took short-haul holiday trips in 2003, compared with around 6.4 million in long-haul trips. In 1968, only 7% of all trips abroad were long-haul, indicating that the long-haul market has more than doubled its market share since 1968. By 2000, the long-haul segment had stabilised at around 18% of the market, but saw a fall to 15.4% in 2003.

Table 3.8 Short and Long-Haul Holidays Taken by UK Residents, 1967-2003 Year Travellers ('000s) Change % Share

Short Haul Long Haul Short Haul Long Haul Short Haul Long Haul 1967 4,698 291 94.2% 5.8% 1968 4,489 339 -4.4% 16.5% 93.0% 7.0% 1969 4,785 411 6.6% 21.2% 92.1% 7.9% 1970 5,169 393 8.0% -4.4% 92.9% 7.1% 1971 6,037 535 16.8% 36.1% 91.9% 8.1% 1972 6,695 677 10.9% 26.5% 90.8% 9.2% 1973 7,113 704 6.2% 4.0% 91.0% 9.0% 1974 6,049 680 -15.0% -3.4% 89.9% 10.1% 1975 6,793 685 12.3% 0.7% 90.8% 9.2% 1976 6,377 647 -6.1% -5.5% 90.8% 9.2% 1977 6,221 613 -2.4% -5.3% 91.0% 9.0% 1978 7,642 797 22.8% 30.0% 90.6% 9.4% 1979 8,621 1,206 12.8% 51.3% 87.7% 12.3% 1980 9,960 1,706 15.5% 41.5% 85.4% 14.6%



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Year Travellers ('000s) Change % Share Short Haul Long Haul Short Haul Long Haul Short Haul Long Haul

1981 11,383 1,749 14.3% 2.5% 86.7% 13.3% 1982 12,733 1,491 11.9% -14.8% 89.5% 10.5% 1983 13,222 1,346 3.8% -9.7% 90.8% 9.2% 1984 13,960 1,286 5.6% -4.5% 91.6% 8.4% 1985 13,608 1,290 -2.5% 0.3% 91.3% 8.7% 1986 16,346 1,550 20.1% 20.2% 91.3% 8.7% 1987 17,711 1,991 8.4% 28.5% 89.9% 10.1% 1988 18,275 2,425 3.2% 21.8% 88.3% 11.7% 1989 18,914 2,933 3.5% 20.9% 86.6% 13.4% 1990 18,186 3,085 -3.8% 5.2% 85.5% 14.5% 1991 17,640 3,149 -3.0% 2.1% 84.9% 15.1% 1992 19,496 3,740 10.5% 18.8% 83.9% 16.1% 1993 20,811 4,322 6.7% 15.6% 82.8% 17.2% 1994 23,022 4,164 10.6% -3.7% 84.7% 15.3% 1995 23,577 4,231 2.4% 1.6% 84.8% 15.2% 1996 22,013 4,752 -6.6% 12.3% 82.2% 17.8% 1997 23,986 5,152 9.0% 8.4% 82.3% 17.7% 1998 26,568 5,738 10.8% 11.4% 82.2% 17.8% 1999 28,747 6,276 8.2% 9.4% 82.1% 17.9% 2000 29,961 6,724 4.2% 7.1% 81.7% 18.3% 2001 32,198 6,472 7.5% -3.7% 83.3% 16.7% 2002 33,761 6,141 4.9% -5.1% 84.6% 15.4% 2003 34,839 6,358 3.2% 3.5% 84.6% 15.4%

Source: Travel Trends (several issues), Office for National Statistics Between 1971 and 2000, the growth of the long-haul market has consistently outpaced that of the short-haul market, posting higher rates of growth in each year since 1985 (see Figure 3.9). Growth slowed in 1994 and 1995 but then recovered until 2001 and 2002 when the number of long-haul holiday visits taken by UK residents actually decreased in the wake of growing fears of terrorism. However, with long-haul travel picked up again in 2003 and is expected to continue in this vein, all else being equal.

Between 1971 and 2000, the rate of growth of long-haul traffic outpaced short-haul traffic, but fell in 2001 and 2002



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Figure 3.9 Short and Long-Haul Holidays Taken by UK Residents, 1968-2002

Source: Travel Trends (several issues), Office for National Statistics

3.6 Independent Travel

In Britain, more than half of all holidays taken are arranged inclusively through a tour operator. There has, however, been a growing trend towards the taking of independent holidays, that is, in which the traveller organises and books transport and accommodation from separate sources (e.g. an airline seat and a villa in France). Independent travel also includes seat-only, where travellers purchase only a return travel fare to their holiday destinations (e.g. Florida, Majorca) and thereafter book their own accommodation, car hire etc. Travellers can book either flight or accommodation through separate sources, such as a tour operator or travel agent, but this still counts as independent travel.

There is a growing trend towards independent holidays

The European Package Directive defined a package broadly as a pre-arranged combination of any two of three elements – accommodation, transport and an additional service (such as fishing rights, theatre tickets or guided tours). For the third component to apply, it would have to represent a significant element in the customer’s holiday choice.



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In 2003, more than half (53%) of all vacationers travelled with a package tour and 47% travelled independently (see Figure 3.10). We expect the growth of the independent holiday market to continue. It is even possible that the size of the independent holiday market could be underestimated as many British travellers now use the holiday package as a “launch pad” for their independent holidays.

Figure 3.10 Independent vs. Inclusive Travel, 2003

Independent53%

Holiday Inclusive47%

Source: Travel Trends 2003, Office for National Statistics 3.7 Time of Travel

The third quarter of the year, July to September, is the most important period of travel for British holiday-makers (see Figure 3.11). In 2003, these three months together accounted for 33% of all trips abroad.

Summer months are peak travel time

The peak months of travel are generally the same for most destinations. In North America, which received 7% of British visits abroad in 2003, more than one third of visitors travelled in the Summer months of July, August and September. For other areas, relatively more Britons travel in January (Winter), April (Easter), August (Summer) and October (Autumn). Western Europe receives a disproportionately large share



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of British visitors in the Summer. The number of trips made by UK residents to Western Europe during June, July, August and September is almost double the number of trips made abroad during other months of the year. Figure 3.11 Visits Abroad by UK Residents by Quarter, 2003 (thousands)

Source: Travel Trends 2003, Office for National Statistics While weather plays a key role in the choice of holiday destinations, the availability of holidays during the Summer months, when schools have a break, is a far more important factor in deciding when holidays are taken.

3.8 Mode of Travel

The majority of British travellers travel by air. In 2003, air travel accounted for 77% of all travel abroad by the British compared with 15% who travelled by sea and 8% who used the Channel Tunnel (see Figure 3.12).

The majority of Britons travel abroad by air

Of those travelling by Sea and Channel Tunnel, the majority (55%) travelled via private means of transportation. There was an additional 22% travelling on foot (hitch-hikers). The rest travelled by coach and on goods vehicles and by



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other means of transport. The opening of the Channel Tunnel in 1994 increased competition, and this, combined with the development of low-cost, no-frills airlines, has reduced the real cost of international travel in many instances.

Figure 3.12 Share of Visits Abroad by Mode of Travel, 2003

Channel Tunnel

8%

Sea

15%

Air

77%

Source: Travel Trends 2003, Office for National Statistics The increasingly competitive air transportation market, the growth of charter flights and the seat-only market, and the growing preference for travel to exotic and distant destinations ensure that the majority of outbound travel will continue to be driven by air travel.

Competition from “no frills” airlines and regional airports could further hit the ferry market share, with flights from Luton, Gatwick and Stanstead accessible from large parts of the country.

3.9 Where the British Stay

British residents have a clear preference for staying at hotels, although hotel stays are diminishing in favour of rented villa/flat accommodation. In 1978, almost 60% of all British travellers opted for hotel/motel accommodation. Another 20.6% opted to stay at the homes of friends and relatives, while 7.5% stayed at a rented flat or villa. By 1998, about

The British have a clear preference for hotels



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half of all travellers (45.4%) opted for hotel/motel accommodation; 15.7% opted to stay at friends and relatives, and 20.4% stayed at a rented villa or flat (see Figure 3.13 and Table 3.14).

Growth in demand for non-hotel accommodation

Figure 3.13 Where the British Stay on Holiday 1978, 1988 and 1998 compared

Source: British Tourism Authority, 2000 Table 3.14 Where the British Stay on Holidays Abroad

% Accommodation

Type 1978 1988 1998 Hotel/motel 54.2 46.2 45.4 Rented villa/flat 7.5 21.8 20.4 Friends/relatives home 20.6 15.7 15.7 Other 3.7 5.7 8.3 Boat (including cruises) 2.8 1.9 2.8 Pension, boarding house 2.8 2.8 2.8 Camping 4.7 1.9 1.9 Caravan 1.9 1.9 0.9 Holiday camp 0.9 0.9 0.9 Youth hostel 0.9 0.9 0.9 Total 100 100 100 Note: Figures have been adjusted to sum to 100% because of rounding and because of proportion of people who gave no response. Source: Digest of Tourism Statistics No.23, British Tourism Authority, January 2000.



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The increased preference for rented villa/flat holidays can be explained by the increase in family travel and the need to reduce the overall price of the holiday, with rented accommodation affording the opportunity to prepare meals for oneself.

3.10 Average Length of Stay

British travellers spend an average of 10 nights abroad. British travellers spend more nights abroad when they visit friends and relatives and the second highest number of nights abroad on holiday. In 2003, a total of 15 nights were spent abroad when British residents visited their friends and relatives. The British spent a total of 10 nights away from home when they were on holiday and 5 nights on business trips (see Figure 3.15).

The British spend an average of 16 nights abroad visiting friends and relatives

Figure 3.15 Average Length of Stay by Purpose of Trip, 2003

Source: Travel Trends 2003, Office for National Statistics Since 1996, the average duration of UK visits to Europe has remained stagnant at 8 nights and worldwide has decreased from 11 to 10 nights. The general trend is a consistent decrease in the number of nights stayed per visit (see Figure 3.16).

The British spend fewer nights abroad closer to home and more nights abroad when they travel further away from home. In 2003, British



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residents spent an average of 14 nights in North America; 8 nights in the EU Europe; 11 nights in non-EU Europe and 24 nights in other countries. Figure 3.16 Average Length of Stay by Area Visited, 2003

Source: Travel Trends 2003, Office for National Statistics 3.11 How Much the British Spend

The British spent £265 million (US$439.9 million) on travel abroad in 1965 and just over four times as much (£1.08 billion or US$1.79 billion) in 1975. By 1985, the amount spent on travel abroad had increased to £6.14 billion (US$10.19 billion), and in 1997, £17.22 billion (US$28.24 billion) was spent on travel abroad. In 1998, the British spent £18.62 billion (US$28.59 billion) on travel abroad, setting a new record. In 2004, the British spent £30.3 billion on travel abroad, representing a 54% increase over 1998.

The British spent £30.3 billion in 2004

Britain (including Ireland) ranks third in the world in spending abroad, after the United States and Germany. In 2002, the British spent US$36.5 billion on travel abroad, while Americans spent US$58.9 billion on travel abroad and Germans spent US$46.2 billion. (see Figure 3.17).



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Figure 3.17 Spending on Travel Abroad, 2002

Source: Tourismus in Zahlen, 2004 A comparative analysis of the number of trips and the amount of expenditure by the British demonstrates that growth in British expenditure on holidays abroad has far outstripped growth in the number of trips made by the British since 1968 (see Figure 3.18).

Growth in expenditure outstrips growth in number of trips

Figure 3.18 Amount Spent by the British on Travel Abroad, 1969-2003

Source: Annual Abstract of Statistics (several issues), Office for National Statistics



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In absolute terms, British expenditure on travel abroad has increased every year since 1970, except in 1974 and 1996. Between 1973 and 1974, expenditure by the British on travel abroad fell by 14.9%, and in 1996 a 4.5% reduction was recorded. However, expenditure rebounded and increased by 15.7% in the following year and has continued to increase each year since then (see Table 3.19).

Expenditure on travel abroad is consistently increasing

Table 3.19 Amount Spent by the British on Travel Abroad, 1970-2010 Year Trips Abroad

(millions) % Change Expenditure (£

millions) % Change

1970 5.8 470 1971 7.3 25.9% 630 34.0% 1972 8.5 16.4% 830 31.7% 1973 8.3 -2.4% 870 4.8% 1974 6.8 -18.1% 740 -14.9% 1975 8.0 17.6% 1,080 45.9% 1976 7.3 -8.8% 1,210 12.0% 1977 7.8 6.8% 1,360 12.4% 1978 9.0 15.4% 1,860 36.8% 1979 10.3 14.4% 2,570 38.2% 1980 12.0 16.5% 3,510 36.6% 1981 13.3 10.8% 4,320 23.1% 1982 14.3 7.5% 4,730 9.5% 1983 14.5 1.4% 5,000 5.7% 1984 15.5 6.9% 5,560 11.2% 1985 15.8 1.9% 6,140 10.4% 1986 17.5 10.8% 6,740 9.8% 1987 20.0 14.3% 8,500 26.1% 1988 20.3 1.5% 9,140 7.5% 1989 21.0 3.4% 10,150 11.1% 1990 20.5 -2.4% 10,640 4.8% 1991 20.0 -2.4% 11,310 6.3% 1992 21.8 9.0% 12,220 8.0% 1993 23.5 7.8% 13,410 9.7% 1994 26.3 11.9% 15,140 12.9% 1995 26.0 -1.1% 15,580 2.9% 1996 23.3 -10.4% 14,880 -4.5% 1997 27.3 17.2% 17,220 15.7% 1998 26.9 -1.5% 19,489 13.2% 1999 29.2 8.6% 22,020 13.0% 2000 30.8 5.5% 24,251 10.1% 2001 32.0 3.9% 25,332 4.5% 2002 32.8 2.5% 26,962 6.4%



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Year Trips Abroad (millions)

% Change Expenditure (£ millions)

% Change

2003 33.6 2.4% 28,550 5.90% 2004 34.3 2.0% 29,889 4.7% 2005 34.9 1.8% 31,095 4.0% 2006 35.4 1.6% 32,179 3.5% 2007 35.9 1.4% 33,156 3.0% 2008 36.4 1.2% 34,034 2.7% 2009 36.8 1.1% 34,825 2.3% 2010 37.1 1.0% 35,537 2.0%

Note: due to changes in the International Passenger Survey sampling methodology introduced in 1999, care should be taken when comparing results for 1999 to 2003 with those for earlier years. Sources: Travel Trends (several issues), Office for National Statistics Figures for 2003-2010 are forecasts from Tourism Intelligence International, 2004 In 2003, British travellers spent an average of £465 per visit on travel abroad compared with £383 per visit in 1998. Average spending on holiday visits increased from £386 in 1998 to £480 in 2003 (see Figure 3.20).

Figure 3.20 Average Cost of Holiday Abroad per Visit, 1998-2003

Source: Travel Trends 2003, Office for National Statistics The British spend the most per visit in Other Countries and the least per visit in neighbouring Europe. Expenditure in North America also tends to be high. In 2003, the British spent £886 per visit in North America, £454 per visit in non-EU Europe, £361 per visit in EU Europe and, reflecting the higher average length of stay, £908 in other countries (see Figure 3.21).

British visitors to Other Countries spend most per visit



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Figure 3.21 Average Spending Per Person per Visit by Main Area, 2003

Source: Travel Trend 2003, Office for National Statistics As expected, expenditure on business travel is the highest, followed by holiday and visiting friends and relatives. In 2003, the British spent £512 per person when travelling on business, £480 per person when on holiday, £341 per person when visiting friends and relatives and £476 per person when on miscellaneous visits (see Figure 3.22).

Average expenditure on business travel is highest

Figure 3.22 Average Spending Per Person Per Visit by Purpose and Year, 2003

Source: Travel Trend 2003, Office for National Statistics



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3.12 Where the British Stay Longest and Spend

the Most

The British stay the longest in Australia and New Zealand, spending an average of 43 and 44 days respectively. Asia receives the second longest stay, an average of 30 days, with Hong Kong receiving the longest (33 days). Following Asia is Africa with an average of 17 days (South Africa being the highest in that region with 22 days).

The British spend the longest time in Australia and New Zealand

The British spend the most per day in Belgium, at £103 per day, followed by Iceland (£93), Luxemburg (£73) and the Netherlands (£69), (see Table 3.23).

Table 3.23 UK Residents’ Average Length of Stay and Average Daily Expenditure, 2003 Country Average Length

of Stay (nights) Average Daily Expenditure (£)

Canada 16 47 USA 14 65 Austria 8 62 Belgium 2 103 Denmark 6 58 Finland 8 58 France 6 54 Germany 6 55 Greece 11 43 Irish Republic 5 48 Italy 7 62 Luxembourg 4 73 Netherlands 4 69 Portugal 10 42 Spain 11 40 Sweden 5 62 Cyprus 13 45 Gibraltar 6 50 Iceland 6 93 Malta 13 30 Norway 7 52 Switzerland 7 69 Turkey 13 36 Former USSR 13 42 Former Yugoslavia 11 38



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Country Average Length of Stay (nights)

Average Daily Expenditure (£)

North Africa 12 39 South Africa 22 44 Rest of Africa 25 40 Israel 13 45 Other Middle East 16 49 Hong Kong 33 26 India 27 26 Japan 18 64 Rest of Asia 34 27 Australia 43 37 New Zealand 44 34 Caribbean 16 46 Central & South America 21 44 Rest of the World 12 96 Total World 10 46

Source: Travel Trends (several issues), Office for National Statistics 3.13 Implications for Your Business

Analysis of British travel patterns reveals a number of clear trends:

1. The British will travel;

2. There is a growing preference for travel abroad and to faraway destinations;

3. Short breaks (one to three days) are

growing in popularity;

4. Growth in independent holidays will continue;

5. The hotel sector is under threat;

6. Search for exotic and green destinations;

and

7. More activity-oriented holidays.

These trends and implications for your business are examined below:



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3.13.1 The British Will Travel

As we have seen, taking holidays abroad is a firmly established priority for most British consumers. Having a good holiday is the most important spending priority for the UK consumer and is considered essential, rather than a luxury commodity. Since 1991, there has been a consistent increase in the number of British travellers. In 2004, British travellers made 64.1 million visits abroad. There has also been a trend toward increased expenditure abroad. There is no doubt that the British will continue to travel. However, beware! Remember that Britain has one of the largest airport infrastructures and easiest access to flights in the world. Tour operators are experienced packagers and sellers of destinations worldwide. Many destinations are competing for the British market. British consumers have a wide array of destinations from which to choose and are very experienced and demanding. Destinations will need to compete on value and be innovative in their product offer in order to sustain and win market share. In addition, the British travellers are increasingly keen on “going it alone” (independently) and using the Internet to make bookings. Internet strategies for suppliers will need to be well-defined, with a clear focus.

A good holiday is an important spending priority for the British

3.13.2 There is a Growing Preference for Travel Abroad and to Faraway Destinations

The British are sophisticated and experienced travellers. The trend is for growth in travel abroad, so much so that the British tend to be apologetic about taking a holiday in Britain. The British preference for holidaying abroad has increased by leaps and bounds. In 1965 only 14.3% of British trips were abroad and 85.7% of domestic trips within the United Kingdom. In 1998, approximately half of all 4+ night holiday trips taken were taken abroad. Under the new statistical series (introduced in 1999), the share of British residents opting to travel abroad has been recalculated at an estimated 47% in 2002.

There is a growing preference for travel abroad to faraway destinations

Destinations will need to be fresh and reinvent themselves, as Spain has successfully done, in order to compete in the British market. Being



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faraway and “exotic” may not be sufficient to capture the market and satisfy British travellers. There is a growing demand for quality in all aspects of the holiday. 3.13.3 Short Breaks are Growing in Popularity

There has been a decline in the number of 4+ night trips taken in favour of shorter trips. The data show that while the proportion of those taking holidays abroad has remained relatively constant over the 1984–2002 period, the frequency of trip-taking has increased. This can be explained by the growing popularity of short breaks. Growth in the shortbreak market will mean that short-haul destinations and interesting cities will benefit from the surge in travel for shorter breaks. Long-haul destinations that offer creative, hassle-free, seamless packages will also stand to benefit. Shopping trips to New York and mid-west USA, for example, fuelled by cheap flights and the strength of the British pound, have benefited from short breaks. All-inclusives and cruises could have important advantages in this growing short-break market as they tend to offer competitive, flexible and hassle-free itineraries.

3.13.4 Growth in Independent Holidays

In Britain, more than half of all holidays taken are arranged inclusively through a tour operator. There has, however, been a growing trend towards the taking of independent holidays. In 2003, a total of 53% of all British vacationers travelled independently, and this trend is set to continue (see Chapter 4).

There is an increasing trend towards independent holidays

3.13.5 Hotel Sector under Threat

British travellers have a clear preference for staying at hotels. However, hotel stays are diminishing, in favour of rented villa/flat accommodation. By 1998, less than half of all travellers (45.4%) opted for hotel/motel accommodation; 15.7% opted to stay at friends and relatives and 20.4% stayed at a rented villa or flat (up from 7.5% in 1978). Hotels and resorts will need to be far more flexible in their offerings and increasingly cater to the needs of individual British travellers.



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3.13.6 Search for Exotic and Green Destinations

There is also a trend away from the pure sun, sand and sea holidays toward more exotic green destinations. Culture and adventure, particularly soft but increasingly medium adventure, will rise in popularity.

3.13.7 More Activity-oriented Holidays

There is also a trend towards more activity-oriented/special-interest holidays. British travellers are not content to just be around and do nothing. The range of activities on offer to suit the wide variety and eccentricity of British travellers is explored in Chapter 4.

There is a trend towards more activity oriented holiday



Most Preferred Holiday Types

Tourism Intelligence International launched an UK tour operator survey in May 2000 and again in July 2004 where the top tour operators from the Association of British Travel Agents (ABTA) were systematically interviewed. Tour operators were asked to indicate which holiday type was most likely to be in greatest demand in the next five years. The top six holiday types identified by British tour operators were: • Cruising • Special interest/niche areas/activity

holidays/safari adventure • Short breaks • Beach • Independent travel • All-inclusive

Tour operator survey reveals top holiday types in greatest demand in the next five years

Figure 4.1 Most Favoured Holiday Types in the Next Five Years

Source: Tourism Intelligence International, 2005

4

© Tourism Intelligence International 4:Most Preferred Holiday Types


In this report, we examine five of the six preferred holiday types: • Cruising • Short breaks • All-inclusives • Special interest/niche areas/activity

holidays • Independent travel

More than two fifths (43%) of UK tour operators identified cruising and special-interest niche markets as the most favoured holiday types of their clients in the next five years. Another third (33%) identified short breaks as growing in favour among British travellers. More than 20% of tour operators surveyed identified beach holidays, independent travel and all-inclusives as holiday types favoured by their clients.

Cruising and special interest/niche markets will be the most favoured holiday types in the next five years

As the number of UK residents taking a cruise increased, the proportion of ‘first timers’ has steadily fallen – from 55% of all UK cruise passengers in 1995 to 41% in 2002, and from 66% to 42% over the same period for flycruisers. Nevertheless, it continues to be a source of concern for cruise companies that almost two-fifths of their passengers have to be newly acquired each year.

Two-fifths are first time cruisers

In 2003, the average price paid for a cruise was £1,052 compared with £1,108 in 2002.

4.1 Cruising

Cruising will be the most preferred holiday type for two fifths of British holiday-makers in the next five years.

In 2003, cruise sales represented 4.9% (or one in twenty) of all foreign inclusive (package) holidays taken by Britons compared with less than 2% in 1993.

Cruises represent 4.9% of all foreign inclusive holidays

The UK is the second largest cruise source market after North America and almost double the size of Germany which with 537,000 ocean cruise sales in 2003 is the third largest cruise source market.

4:Most Preferred Holiday Types © Tourism Intelligence International


The number of cruises sold annually in Britain passed the one million mark for the first time in 2003. Notwithstanding the travel hesitancy caused by the Iraq war, record cruise bookings were not just achieved in the UK but also worldwide.

Over 1 million cruises sold in 2003

About 12.2 million cruises were booked worldwide in 2003, of which 8.2 million were in North America (up 7.3%) and 1.05 million in the UK with 11 new ships being introduced during 2004, with an average capacity of just under 3,000 passengers, the 2004 total is expected to approach 13.4 million. Although new ship orders have slowed down in the past two years, there are still 17 being built for delivery between now and 2008. These include the largest yet, Royal Caribbean’s Ultra Voyager.

William Gibbons, Director of the Passenger Shipping Association (PSA) has commented: “2003 has been a year of extraordinary growth for the cruising industry with a 14 per cent increase in ocean cruises compared to 2002 and the launch of more than 20 new ships from P&O’s Ocean Village and Royal Caribbean’s Serenade of the Seas to Crystal’s Serenity and Norwegian Coastal Voyage’s Midnastol.”

2003 – a year of extraordinary growth for the cruising industry

Further expansion came in 2004 with the launch of the largest cruise ship in the world, Cunard’s Queen Mary 2 in January. There will be further new ship builds from a number of cruise lines including Royal Caribbean and P&O Princess. This will help to deliver a further rise of 10% in UK cruise passengers in 2004 for ocean cruising.

Not only did the UK total pass one million and show year-on-year growth for the 17th year in succession but the actual rise was more than 12% - the largest increase since 1999. The increase in ocean cruising was even more impressive, with a 17.4% growth rate bringing sales to 964,000. Over one-third of the increase in ocean cruisers in 2003 was due to the introduction of a new brand – P&O Ocean Village – launched in the spring and targeted exclusively at UK passengers and the informal market.

Over one million British cruisers Double digit growth



For the third successive year, the ongoing Israeli-Palestinian conflict contributed to a sharp drop in the number of cruises booked out of Cyprus.

The growth in cruising is across almost all areas: ex-UK port cruises and flycruises; budget-priced to high-priced luxury cruises; mainstream destinations such as the Mediterranean and the Caribbean through to soft adventure and expedition cruises to Antarctica and the Arctic – all are showing consistent growth, with only Alaska, Short Cruises ex-Cyprus and Round the World showing decreases in 2003. Further details are shown in Table 4.2.

The UK is the fastest growing cruise market in the world

Table 4.2 Cruises Taken by UK Residents, 1995, 2002 and 2003 Destination 1995 2002 2003 Growth

2002/03 Mediterranean 141,150 354,323 410,633 15.9% Caribbean 87,339 171,328 187,929 9.7% Scandinavia/Baltic 26,242 69,371 89,912 29.6% Atlantic Isles 19,194 73,137 85,081 16.3% Short Cruises (ex-Cyprus) N/A 53,372 30,891 - 42.1% West Coast/Hawaii/Trans Canal 7,518 18,934 22,805 20.4% Far East/Australasia 6,812 14,996 18,215 21.5% South America/Antarctica N/A 6,433 14,610 127.1% Alaska 10,256 16,968 13,186 - 22.3% Round the World 5,418 8,824 8,659 - 1.9% Note: figures do not include river cruises Source: Annual Cruise Review 2003 (UK and Europe), Cruise Information Service Passenger Shipping Association, May 2004 Overall, flycruises are still the most popular option for UK cruisers, representing about 72% of all cruises sold in 2003, but the gap with other types of cruise continues to close with a 27.6% increase in ex-UK cruises compared with a 15.9% increase in flycruises in 2003.

Flycruises are popular

UK cruisers are taking longer cruises and although some of this is due to the continuing increase in popularity of two-week (or longer) cruises from UK ports, there is also a clear trend towards more exotic destinations e.g. South America and Antarctica) usually involving long-haul flights.

Trend towards more exotic destinations



An important reason for the growth of cruising in Britain is the fact that the large tour operators, such as Thomson and Airtours, offer cruises as an integral part of their holidays. Tour operators can combine their traditional land-based holiday offer with the flexibility of “cruise and stay” holidays.

Cruising has also grown quickly in popularity in the UK because of the diversity of different types of holiday on offer. The Passenger Shipping Association (PSA) believes there is a ship and a cruise holiday out there to suit everybody – from sailing to working ships; exquisitely indulgent luxury ships to hugely entertaining larger ships; short jaunts from Cyprus and the UK to a two-week “cruise and stay” where you combine a holiday on land with one at sea.

Cruising has grown because of the diversity of the cruise offering

A recent development has been the emergence of Ultra-Luxury Cruises as a distinct market segment. Ultra luxury cruises (which carried 18,400 UK passengers in 2003 up almost threefold since 1999) are defined by the Passenger Shipping Association as ships with fewer than 1,100 passengers, at least one crew member to every two passengers and a space-to-passenger ration of more than 40 square metres. Ultra luxury cruises also cost at least £350 per day. The PSA has formed an alliance called the Exclusive Collection to clearly define ultra-luxury cruise lines. Members include Crystal Cruises, Hebridean Island Cruises, Peter Dellman, Radisson Seven Seas Cruises, Seabourn, SeaDream Yacht Club and Windstar.

Emergence of ultra-luxury cruises

There has also been an upsurge in so-called Niche Cruising which covers coastal voyages and special interest cruises offering unusual itineraries on smaller, sometimes sail or sail-assisted ships, accompanied by expert lecturers.

Upsurge of “niche cruises”

4.1.1 Length of Stay

On average, UK cruise passengers are booking longer cruises and making their bookings later. The average cruise was significantly longer - an average of 9.6 days in 2003 compared with 8.9 days in 2002. The seven-day cruise is confirmed as the most popular choice with more than half of all cruises taken within the 5-7 day range.

Seven day cruise is the most popular



4.1.2 Where Did the British Cruise?

In 2003, the most popular destinations were the Mediterranean (410,633), Caribbean (187,929), Scandinavia/Baltic (89,912), Atlantic Islands (85,081), Short Cruises ex-Cyprus (30,891), West Coast/Hawaii/Trans Canal (22,805) and the Far East/Australasia (18,215) (See Figure 4.3).

The Mediterranean and the Caribbean are the most popular cruise destinations

Figure 4.3 Most Popular Cruise Destinations, 2003

Source: Annual Cruise Review 2003 (UK & Europe, Cruise Information Service Passenger Association, May 2004) The recent UK cruise boom has centred on the Mediterranean, due to three developments: • Tour operators setting up cruise divisions

and offering cruise-and-stay holidays in resorts popular with millions of British tourists.

• Cruise lines bringing in larger and larger

ships, including one 100,000 t-plus mega vessel.

• The development of a short-cruise

operation out of Cyprus.

Short cruises for Cyprus



4.1.3 Who Took Cruises?

Cruising used to be for the “wealthy elderly”. Cruises today are attracting a younger market.

In 2003, the average age of all UK cruise passengers was 54.6 years, and slightly younger (51.5 years) for those taking fly cruises. While more and more young people are taking cruise holidays, demographic changes will mean that the share taken by older age groups will increase because of the ageing population.

Cruises are attracting a younger market but the share taken by older age groups will increase because of the ageing population.

4.2 Short Breaks

An important trend is the increase in short breaks, frequently but not exclusively city breaks, as people take more leisure trips per year and, being more used to flying, travel further afield or to new destinations for a shorter duration.

An important trend is the increase in short breaks

The short, more frequent, holiday is here to stay. There is a clear tendency to take shorter, but more frequent, holidays.

The number of short breaks that were independent holidays has nearly trebled between 1994 and 2002 - from 1.4 million visits to 3.9 million. Between 1994 and 2002, independent holiday short breaks have increased every year. The inclusive short-break holiday has also increased from 962,000 visits in 1994 to 1.9 million in 2002, almost doubling. Short breaks for business have also been on the increase but at a slower rate, from 2.4 million visits in 1994 to 4.0 million visits in 2002 (after peaking at 4.5 million in 2000 (see Figure 4.4).



Figure 4.4 Breakdown of Short Breaks by Purpose of Trip, 1998 - 2002

Source: Travel Trends 2003, Office for National Statistics, 2004 City Breaks

City breaks are an important component of the short-break market. For the British, the top five destinations for city breaks have been consistent between 2002 and 2003. Paris, Amsterdam, Brugge, Barcelona and Rome maintained their top five positions although Barcelona moved up to fourth place in 2003 ahead of Rome. Brussels has fallen from fifth place in 1995 to seventh in 2003. On the other hand, Dublin has grown in popularity, moving from thirteenth place in 1996 to sixth place in 2003 (see Table 4.5).

City breaks are an important component of the short-break market



Table 4.5 Top 20 City Breaks in 2003 (and 2002 in parentheses) Rank City Rank City 1 2 3 4 5 6 7 8 9 10

Paris (1) Amsterdam (2) Bruges (3) Barcelona (5) Rome (4) Dublin (8) Brussels (6) Venice (9) Prague (7) Lille (11)

11 12 13 14 15 16 17 18 19 20

Milan (13) Madrid (10) Marne La Vallee (-) Florence (12) Vienna (15) Rotterdam (-) Nice & Monte Carlo (14) Seville (17) New York (19) Reykjavik (-)

Source: Travel Trade Gazette, Travelscene City Break Report, 2004 The new cities that either entered or re-entered the list of top twenty destinations in 2003 are Marne La Vallee (close to Disneyland Paris), Rotterdam, Reykjavik, Gibraltar, Copenhagen, Helsinki, The Hague, Budapest, Palma, Athens and Budapest.

The increased maturity and travel sophistication of British consumers as well as advances in aircraft technology are certainly changing the landscape of the “short break” market. British residents are now prepared to travel further away for shorter periods.

The British are prepared to travel further away for shorter periods

Destinations will need to make their products attractive in order to tap into this British shorter, more frequent holiday-taking habit. Good transportation connections, ease and hassle free holiday options will be a premium. Here, all-inclusive and cruise holiday offerings will need to take these changes on board in developing and re-designing products that can be enjoyed for the shorter duration market.

4.3 All-Inclusives

The British market has warmed to all-inclusives more than any other global market, perhaps with the exception of the USA. British tour operators expect all-inclusives to be among the top holiday types for which British travellers will have a strong preference in the next five years. Leading tour operators such as JMC (Thomas Cook), First Choice and Thomson already have dedicated all-

All-inclusives set to grow



inclusive brochures. The all-inclusive holiday concept refers to vacations where virtually everything is included in a pre-paid price – from airport transfers, baggage handling, government taxes, room, all meals, snacks, drinks and cigarettes, to the use of all facilities, equipment and certified instructors. Even gratuities (tips and service charges) and nightly entertainment are included in the price. The result is that the use of cash is eliminated from the holiday experience and visitors know in advance the exact cost of their holiday. The German tour operator, TUI, has gone a step further and, together with Jack Tar Village in the Dominican Republic, extended the all-inclusive package to include leisure shirt, long and short pants, linen dress, polo shirt, straw hat, belt, shaving cream, sun screen lotion, sandals, tee shirts, underwear, toothbrushes, powder, deodorant, sunglasses etc.

Visitors know in advance the exact cost of holiday

The all-inclusive holiday has brought financial certainty to vacation planning. All too often British travellers go to a destination with pre-paid bed and breakfast and eventually find that the price of the additional “extras” (airport transfers, meals, cigarettes, drink, service charge, value-added tax, energy surcharges and petrol) turns out to be far more than budgeted. With an all-inclusive vacation, all financial decisions are largely pre-paid and pre-made. Therefore, any extra spending on the holiday (for example on telephone calls, laundry and shopping) is because guests want to, rather than because they need to.

The idea of the all-inclusive holiday is to minimise financial transactions during the holiday experience. The absence of financial decision-making during the vacation removes the potential for embarrassment, stress or conflict that the spending of money could generate.

The attraction of the all-inclusive concept lies in its value-for-money appeal to consumers and the simplification of procedures and control that it offers management. Travel agents also like to sell all-inclusives as they earn commissions on the whole package – even on tips and taxes! The main disadvantage of the all-inclusive concept is

Consumers believe that all-inclusives provide value for money



the “enclave” type of tourism it perpetuates in destinations which accommodate these resorts. This has been the subject of some debate and the source of criticism of all-inclusives. A list of the strengths and weaknesses of all-inclusives is provided in Table 4.6. Table 4.6 Strengths and Weaknesses of All-Inclusives Strengths Weaknesses • Value for money • Excessive animation, buffet lines

• Tourists can plan holidays better knowing up front what the cost of the holiday will be

• Low inclination to spend outside the budget

• Easier for travel agents to sell and they get commissions on the whole package

• All-inclusive resorts pay out higher commissions package (greater incentive to sell)

• Simplifies relationships between hotels and guests, and minimises capital expenditure on computer equipment to track guest bills

• High expenditure/investment on skilled labour

• Simplifies inventory and stock procedures as all meals are prepaid

• Theft difficult to control

• Eliminates the money relationship between hosts and guests (no tipping allowed)

• Eliminates money incentive for workers

• Guests do not have to leave hotel so value-added from spin-off activities is captutred by the hotel

• Potential for linkages outside of the hotel (e.g. taxi drivers, restaurants) can be limited

• Tourists can feel secure in a well-planned and orchestrated environment

• Leads to enclave type of tourism; limits local participation and interaction of tourists in local community

• Creation of skilled, flexible and empowered staff

• Staff can be easily exploited and over-worked

• Minimum size of 150 room seems to be necessary

• Not as well suited for smaller properties

• Introduces another category of vacation and possibly new markets. Adds diversity to destination

• Unable to take advantage of walk-ins, cruise passengers and business lunches as would conventional hotels.

Source: Tourism Intelligence International, 2005



Sandals, one of the leading all-inclusive resort operators in the Caribbean, offers the following at its Negril, Jamaica, resort: • Round-trip airport transfers and baggage

handling; • Government hotel taxes;

• Tips, gratuities, service charges;

• All meals;

• Unlimited drinks;

• Anytime snacks;

• 2 gourmet specialty dining restaurants;

• Air-conditioned rooms (and suites) with

king-sized beds, hair dryers, clock/radios, telephone, safe, satellite TV with movie channel;

• Exercise/weight rooms/fitness centre;

• Nightly entertainment;

• Indoor games room, movies;

• Pool tables;

• White sand beaches;

• Scuba diving, snorkelling, sailing,

windsurfing, Hobie Cats (including certified instruction);

• Canoes, kayaks, paddle boats, glass-bottom

boats, water-skiing; • Sauna, whirlpool, steam baths;

• 2 freshwater pools;

• Swim-up pool bars;

• 3 tennis courts (day & night);

• Racquet ball, squash, table tennis,



volleyball, basketball; • Lawn chess;

• Shuffleboard, horseshoes, croquet;

• Play makers (hosts & hostesses);

• Discotheque;

• Piano bar;

• Group and meeting facilities;

• Golf (18) holes, including green fees;

• Offshore island;

• Stay at one, vacation at all six; and

• Stay at one, dine at all six.

According to market research firm, Mintel, the number of all-inclusive holidays taken by UK tourists rose from 170,000 in 1995 to 820,000 in 1998, and is estimated by Tourism Intelligence International at over one million in 2006.

While all-inclusive holidays still represent a relatively small proportion of the total British holiday market (less than 10 percent), its share is expected to continue to increase.

Although growing, all-inclusives represent a small portion of all package holidays

The number of UK travellers going to short-haul all-inclusive resorts has risen faster than those going to resorts in long-haul destinations, and now form the largest segment of the all-inclusive market.

The average cost of a holiday in this market has fallen in recent years. In 1995, the average price of an all-inclusive holiday was £959 per person. Today it is less than £500 per person.

According to a recent Mintel survey, value for money is the most important factor in deciding to take an all-inclusive holiday. The next most important reasons for choosing all-inclusives were that they allow people to know how much they are going to spend in advance; they are good

Value for money is the most important factor in all-inclusive holidays



for families; and they offer a wide range of facilities and entertainment. A major plus that the all-inclusive concept has brought to its management is certainty in planning and inventory control. The resort at all times will know how many meals will be needed on a particular day and therefore can adjust purchase and inventory of food and beverages with greater certainty than other types of resorts. What’s more, while conventional hotels have invested in expensive computer equipment to track guest expenditure to ensure that transactions do not go unrecorded, this need is virtually eliminated in an all-inclusive resort – a saving of a great deal of time, equipment, training, maintenance and energy costs.

Certainty in planning and inventory control is a major plus

All-inclusive resorts also offer unique advantages to their employees. With higher year-round occupancy rates, staff is assured of year-round employment. Further, the uniquely Caribbean style of management, motivation, training and employee empowerment of Caribbean all-inclusive resorts result in higher staff loyalty and satisfaction than conventional hotels.

The major weakness of the all-inclusive concept is its enclave nature. Guests are often tempted to stay within the confines of the resort where everything is pre-paid. A similar problem occurs for destinations hosting cruise ships.

The enclave nature is a major weakness

When asked what they wanted in an all-inclusive holiday, 56% of respondents wanted a choice of restaurants, Mintel reported. More than half said a courtesy bus to the nearest town should be provided; 49% said day trips should be included; and 44% wanted children’s clubs.

The majority of all-inclusive visitors want a wide choice of restaurants

All-inclusive resorts seem to have already begun to respond to these concerns, as many of them already have children’s clubs and many have introduced fine dining at their properties.

Tourism Intelligence International expects that the demand for all-inclusives will continue to increase in the next five years, although it is starting from a small base.



4.4 Special Interest/Niche Markets

Whilst cruising and beach holidays are expected to continue to be highly popular, UK tour operators also predict an increase in special-interest or themed holidays and activity/sport or soft-adventure holidays.

Special-interest and themed holidays are on the rise

Other holiday types mentioned were escorted tours, customised flexible, tailor-made holidays, multi-centre stopover breaks, family holidays, self-catering, cultural holidays, lake and mountain trips, and anything based on the British lifestyle were all considered to be in great demand in the next five years, but these holiday types were mentioned less frequently.

The British are interested in a number of different activities. The following table gives an illustration of the types of activities that can be organised by tour operators for British tourists. Activities include anything from bungee jumping to pottery tours (see Table 4.7).

Table 4.7 Activities by Category Offered by UK Tour Operators

Category Activity Extreme Sports Abseiling, Air Sports, Aviation, Ballooning (hot air),

Bungee Jumping, Flying, Hang-Gliding, Para-gliding, Soft Adventure Bird-watching, Camel Riding, Climbing, Elephant

Riding, Motor Racing, Gorilla Viewing, Harp Seal Viewing, Horse Riding, Karting, Overland Expeditions, Pony Trekking. Polar Bear Viewing, Safaris on Elephant-Back, Camel Safari, Tiger Viewing, Whale Viewing

Hard Adventure Camping & Mobile Homes, Caravans, Hiking, Hunting, Jungle-Trekking, Mountain Climbing, Mountain Biking, Mountaineering, Rafting, Safaris, Running of the Bulls, White Water Rafting

Agricultural Agricultural, Bee-keeping, Botany, Bulb Fields, Ecological tours, Environmental Study Tours, Flower Festivals, Garden Tours, Gardening, Wild Flowers

Outdoor (Water) Angling, Boat Tours, Boating (river), Canal, Canoeing, Deep Sea Fishing, Game Fishing, Ferry Excursions, Kayaking, River Adventures, Sailing, Scuba Diving, Snorkelling, Surfing, Water Skiing, Wind Surfing,



Category Activity Yachting, Yacht Charters

Niche Markets Disabled, Gay, Gastronomic, Health and Fitness, Honeymoons, Children’s Multi-Activity Holidays, City Breaks, Coach Tours, Spa, Weddings

Active Sports Cycling, Biking, Golf, Archery, Dancing, Ice Skating, Marathon Running, Motor Cycling, Skating, Ski Safaris, Skiing, Snowboarding, Snow Mobiling, Squash, Swimming, Winter Sports

Spectator Sports American Football, Baseball, Basketball, Clay Pigeon Shooting, Cricket, Falconry, Soccer, Hockey, Horse Racing, Netball, Rugby, Tennis, Volleyball

Educational/ Cultural

Archaeology, Architecture, Art Tours, Ballet, Bible Land Cruises, Calligraphy, Castles, Congresses, Crafts, Cookery, Creative Arts, Cultural, Curry Tours, Dracula Tours, Drama, Antiques, Expeditions, Battlefield Tours, Folk, American Indian Tours, Geology, Gold Panning, Historic Houses, Jazz, Language Study Courses, Museum Visits, National History, Opera, Theatre, Vineyards, Wine Tours

Festivals Beer Festivals, Carnival, Mardi Gras, Music Concerts Religious Holy Shrines & Mosques, Kibbutz Holidays, Churches,

Monastery, Pilgrimages, Religious Coach Tours Eco-tours National Parks, Nature Reserves, Naturism, Nature

Tours Cruises Cruise (Icebreaker), Ocean and River Cruising, Glacier

Tours, Jungle Cruising Passive Sports Bowling (Green and Tenpin), Bridge, Darts, Shooting,

Snooker, Walking, Whist Hobby Painting and Sketching, Photography, Underwater

Photography, Pottery, Yoga Source: Travel Trade Gazette Directory, 2001. Another Mintel survey sheds some additional light on the types of activity holidays in which the British are interested. The British consumers have most interest in water sports, the survey revealed. Just over 60% of all British persons interviewed indicated that water sports is the activity in which they were most interested, followed closely by golf (59%) and horse riding or pony trekking (54%) as is seen in Barbados. Just over half of all British travellers are interested in snow sports; 44% in air sports and 39% in cycling. A total of 34% of travellers are enlisted in team sports or racket sports, 33% in multi-activity; 26% in mountaineering or rock

Have most interest in watersports



climbing and 22% in general fitness training. In this report, we cover the following special interest activities:

1. Golf; 2. Weddings and Honeymoons; and 3. The Ski Market

4.4.1 Golf

Golf and related businesses in the United States, the world’s leading market with an estimated 40 million golfers and 17,000 golf courses, accounts for about 6% of Gross Domestic Product, coming in above gambling, motion pictures and mining.

40 million golfers in the USA and 8 million in Europe

It is also big business in the European Union. Europe has an estimated 8 million golfers playing at 6,500 golf facilities, with Britain, France, Germany and Sweden accounting for 69% of all golf courses and 67% of all registered players. The number of European golfers is growing at about 7% annually, with Norway currently the fastest-growing market.

Golfers also tend to be higher-end tourists, spending more, while a range of complimentary services and businesses, in addition to golf courses, prosper form the millions of golfers, their spouses and families, who take golf-related holidays. The proportion of regular golfers taking golf holidays ranges from 25% in the UK to 50% of Germans, with both groups favouring sunshine destinations such as Spain and Portugal.

The number of golf club members in Europe increased threefold between 1985 and 2004 - from 1.3 million to 4 million. The major source markets include UK, Scandinavia, Germany, France, Ireland, the Netherlands and Spain – about 92% of the total of 4 million European golfers.

Britain is by far the biggest European golfing nation, accounting for some 31% of all European golfers in 2004. Sweden has the second largest golf market in Europe, accounting for 15% of all European golfers, followed by Germany with 11.5% (see Figure 4.8).

Britain accounts for 31% of all European golfers



Figure 4.8 Top Ten Golfing Nations in Europe, 2004

Source: European Golf Association, 2004 According to research published in the Millennium European Golf Travel Report: • 51% of UK golfers have ever been on a

Golf Holiday compared with 70% of German and Swedish golfers, and 51% of French golfers;

• 25% took more than one golf holiday last

year which compared with 57% of Germans; and

• 73% of golf-holiday-makers like to visit

new countries and new destinations – termed “Adventurists”.

51% of UK golfers have taken golf holidays

For UK golfers, the top destinations for golf holidays were: England; Spain; Scotland; Portugal; France; United States; Ireland and Wales, whereas German, Swedish and French golfers were more inclined to choose, in addition to European destinations, long-haul destinations such as Tunisia, Thailand, the Caribbean and South Africa.



Golfers’ main reason for travel is to play. Destinations, therefore, are chosen on the basis of the quality of their golf courses. When choosing a destination, golfers place heavy emphasis on golf-specific information, for example: • What golf courses are available?

• Who designed the courses?

• The length of the entire course and

individual holes; and • The club requirements that players must

meet.

Golfers also require tips and suggestions on what to do while visiting the country.

Golfers travel a lot more often and spend more on travelling and accommodation than non-golfers. A disproportionately high number of golfers travel more than twice a year and are willing to spend between US$2,500 and US$3,000 on each occasion.

According to one survey, having a golf course near to culturally, historically or visually interesting places, having other possibilities for entertainment other than golf, or being close to good restaurants are also criteria for deciding on which destination to choose. Proximity to beaches is of secondary importance.

Britain and Ireland have an estimated 1.5 million regular golfers (belonging to a club) and up to an additional 1.5 million who play either on public courses or on private pay-as-you-play courses. In terms of courses, Britain and Ireland have nearly half of all golf courses throughout Europe (see Table 4.9).

Britain has 1.5 million regular golfers



Table 4.9 Number of British and Irish Golfers and Courses, 2004

Number of Players Nation

Number Of

Courses Male Female Juniors

Total

England Scotland Wales Ireland Total

1,822 542 161 399

2,924

683,560 196,687 53,798

172,200

1,106,245

131,002 30,134 8,775

47,500

217,411

64,259 33,222 8,155

35,500

141,136

878,821 260,043 70,728

255,200

1,464,792

Source: European Golf Association, 2005 In the UK, golf participation is dominated by affluent white males in the 35-64 age bracket.

This was one of the main findings of market research firm Mintel's Golf UK report, which was published in 2003. The report says: "In terms of basic population growth, the best prospects are offered for those marketing to the 55-64 age group, which is expanding strongly, and to the 35-44s, who have the advantage of having grown up in even more affluent conditions and who are also increasing."

Mintel's research also shows that golf’s potential is inherently restricted because two thirds of adults (53% of men, 82% of women) say they have never played the sport and never will.

Nevertheless, in spite of the difficulties in attracting new members, it is not all doom and gloom. The annual TGI survey of sports participation shows that golf has been neither growing nor waning in popularity in the past few years.

The reason the industry is so keen to attract more players is the result of a massive golf building programme in the 1990s. There have been 603 new golf facilities built in the UK since 1990, according to the Golf Research Group (GRG). Some of these facilities were only nine-hole courses, while some existing facilities added new holes. So overall, the equivalent of 727 courses of 18 holes have been built since 1990.



The GRG claims that the £2 billion golf-course building boom of the early 1990s, which rode on the wave of golf as a yuppie sport, is over. It estimates that £1.3 billion of the investment in golf since 1990 has been lost and, while the figure for courses in the UK nears 3,000, the number of players has remained static at three million.

Golf course building boom of the early 1990s is over

4.4.2 Weddings & Honeymoons

The total number of marriages in the United Kingdom has fallen from a peak of nearly 400,000 in 1972 to around 300,000 currently. This is largely due to the fact that more couples cohabit rather than get married. However, the weddings and honeymoons abroad market has always been a significant sector for some destinations. Statistics on the UK wedding market show a long-term decline while the market for taking weddings abroad remains buoyant.

It is estimated that over 30,000 British couples now have their wedding in an overseas destination.

With weddings in Britain costing on average three or four times as much as overseas, one of the main attractions of a wedding overseas is cost. To encourage larger groups, several operators offer weddings free of charge (up to a maximum value) when 10 or more people travel. Another trend is twin centres, where couples marry in one destination and escape for an intimate honeymoon in another. Popular combinations include Sri Lanka and the Maldives, Cancun and Playa del Carmen, and Havana and Varadero. Safaris are also proving popular.

Thomas Cook’s JMC predicts that popular destinations will continue to do well but there will be more demand for unusual locations such as Sri Lanka, where couples wear traditional outfits.

Non-traditional destinations are becoming popular honeymoon spots

It is estimated that as much as 40% of weddings are now booked direct, with the rest through travel agents. There is also a demand for off-beat wedding locations such as the Grand Canyon and Cinderella’s Castle in Walt Disney World in Florida.



A special report by America Express Travel, which studies trends, says that romantic destinations across American and the Caribbean take six of the top ten places for honeymoons. For the choice of an actual wedding ceremony, the research reveals seven US and Caribbean destinations dominate the bridal wishes, with Orlando and New York figuring for the first time.

According to American Express, the top overseas destinations for weddings in 2004 (with last year’s placing in brackets) were:

1. St. Lucia (2); 2. Barbados (1); and 3. Cyprus (3).

Competitive prices in the Caribbean has put St. Lucia in the Number 1 spot as top wedding choice - pushing Barbados into second place. For honeymoons, the top destinations were:

1. Mauritius (1); 2. Maldives (3); and 3. St. Lucia (5);

Further details are given in Table 4.10.

Table 4.10 Top Ten Wedding and Honeymoon Destinations, 2004

Top 10 Wedding Destinations

Top 10 Honeymoon Destinations

1. St. Lucia (2) 2. Barbados (1) 3. Cyprus (3) 4. Mauritius (6) 5. Las Vegas (7) 6. Antigua (4) 7. Jamaica (6) 8. Orlando (-) 9. Maldives (10) 10. New York (-)

1. Mauritius (1) 2. Maldives (3) 3. St. Lucia (5) 4. Barbados (2) 5. Seychelles (6) 6. Cyprus (-) 7. Antigua (4) 8. Las Vegas (-) 9. Jamaica (7) 10. Hawaii (-)

Source: American Express Travel, 2004



British Tour Operators even provide advice on when and where to get married abroad. The following Table 4.11 gives ideas of when and where to get married abroad.

Table 4.11 When and Where to Wed

Month Unijet Tradewinds First Choice

January Sri Lanka, Florida, Caribbean

Caribbean, Mexico, Dubai, Hawaii, Sydney, Sri Lanka,

Malaysia, Phuket, Maldives, South Africa, Mombasa

Sri Lanka/Maldives, Kenya, Mexico,

Caribbean, Margarita, Florida

February Sri Lanka, Florida, Caribbean

Caribbean, Mexico, Dubai, Hawaii, Sydney, Sri Lanka,




March Florida, Caribbean Caribbean, Mexico, Dubai, Hawaii, Sydney, Sri Lanka,




April Florida, Caribbean Caribbean, Mexico, Dubai, Las Vegas, Sri Lanka,

Hawaii, Penang, Maldives

Sri Lanka/Maldives, Caribbean, Florida Mexico, Margarita

May Las Vegas Hawaii, Mexico, Las Vegas Caribbean, Florida Mexico, Margarita

June Cyprus Seychelles, Hawaii, Las Vegas, South Pacific, Koh

Samul, San Francisco

Short-haul, Mexico, Margarita, Caribbean,

Florida, Kenya

July Barbados, Tobago, Grenada

Seychelles, Hawaii, Las Vegas, South Pacific, Koh

Samul, San Francisco


Florida, Kenya, Sri Lanka

August Barbados, Tobago, Grenada

Mauritius, Seychelles, Hawaii, Las Vegas, South

Pacific, Koh Samul, San Francisco


Florida, Kenya, Sri Lanka

September Cyprus Seychelles, Hawaii, Las Vegas, South Pacific, Koh

Kenya, Sri Lanka, Puerto Vallarta,



Month Unijet Tradewinds First Choice Samul, San Francisco Margarita

October Las Vegas Mauritius, Sydney, Hawaii, Las Vegas, South Pacific,

Kenya, Puerto Vallarta, Magarita

November Caribbean, Florida Mauritius, Sydney, Hawaii, Mexico, South Pacific,

Phuket, Langkawi

Caribbean, Kenya, Mexico, Margarita

December Sri Lanka, Caribbean, Florida

Mauritius, Sydney, Hawaii, Mexico, South Africa, Dubai

Phuket, Langkawi

Caribbean, Sri Lanka/ Maldives, Kenya,

Mexico, Margarita Source: Travel Trade Gazette 4.4.3 The Ski Market

The annual Ski and Snowboard Industry Report from market leader Crystal Holidays reports that the British ski market grew another 3% in Winter 2003/04 to 1,041,000, which is up 45% on the 720,000 figure in 1980.

Over one million Britons took ski holidays

The most popular destinations remain unchanged, with France number one, with 36.5% of the market, Austria taking 19.8% and Italy 16% all up by a fraction of one percent. Andorra, fourth with 13.8%, North America with 5.8% and Switzerland 4.9% are all unchanged or down very slightly. Bulgaria is seventh with 2.1%, up from 1.7% the previous season - the biggest growth of any country. Andorra's market share was down slightly after many seasons of continued growth (see Figure 4.12).

France – the Number 1 ski destination

Crystal carried 140,000 passengers, 23% of the total tour operator market, with Inghams reported to carry 108,000 (17.9% of the market). The third to sixth placed operators First Choice, Thomson, Neilson and Panorama all saw small falls in their business according to the report.

Trends reported include the continuing dramatic expansion of the use of online information services and bookings. Use of direct low-cost flights to Europe continues to grow by nearly 10% per annum and the number of skiers confident enough to book accommodation and flights themselves is also up by 7%, although this



growth has slowed a little on last year. The fact that 2003-4 was a good snow season also helped. Projections for 2004-5 include a growth in the US market thanks to the continuing weakness of the dollar and continuing growth in the family market.

For a dozen or more years in a row Andorra increased its share of the UK ski market, and by 2002/3 more than 14 per cent of British skiers were taking holidays there. Having already attracted more skiers than Switzerland and North America combined, Andorra had Italy in its sights, and seemed set to replace it as the third most popular ski destination for Britons, but suffered a slight decline in popularity in 2003/04 as accommodation prices have risen beyond the markets 'willingness to pay.'

Otherwise, the most popular countries remained more or less unchanged since 2001.

The stability of the ski market can also be attributed to the excellent snow of last season, leading to confidence in the market. The season saw more people booking directly with tour operators, via the internet and call centres. Tour operators have also responded to the changing market requirements by providing dynamic packaging and flexible durations.

Austria used to be the most popular destination for UK skiers, who loved the traditional charm of its villages. In the 1980s the destination captured at least half of the UK market. By the mid-1990s, however, Austria’s share had plummeted to under 30% and by the winter of 1997/98 to around 13%. France, which saw its share rise from a quarter to a third, was one of the beneficiaries, partly because it was cheaper, but also because it was closer to Britain. In addition, the now more experienced UK skiers appreciated the extensive ski domains that France has to offer.



Figure 4.12 The UK Overseas Winter Sport Market, 2003/04

Source: Ski and Snowboard Industry Report 2004 (Crystal Holidays) 4.5 Independent Travel

It is interesting that the tour operators themselves identified independent travel among the top six holiday types that would be in greatest demand, as independent travel could potentially cut out the tour operator. British tour operators identified use of the Internet and booking directly with hotels and finding the lowest fare as the way in which the independent traveller operates.

There is a growing trend towards independent holidays

In Britain, more than half of all holidays taken are arranged inclusively through a tour operator. There has, however, been a growing trend towards the taking of independent holidays. Independent holidays are those in which the traveller organises and books transport and accommodation from separate sources (e.g. an airline seat and a villa in France). Independent travel also includes seat-only, where travellers only purchase a return travel fare to their holiday destinations (e.g. Florida, Majorca) and thereafter book their own accommodation, car hire etc. Travellers can book either flight or accommodation through separate sources, such as

Travellers opt to make up their own ‘packages’



a tour operator or travel agent, but this still counts as independent travel. The most important differentiating feature of independent travel is the fact that the travellers do not purchase a “package” (two or more holiday elements) from the same source. If the traveller purchases accommodation-only from the tour operator and combines this with a cheap flight from Easyjet, for example, this counts as independent travel. Holiday makers are assembling their own holidays at home.

Purchasing holiday components from different sources – ‘home assembly’

The Directive of the Council of the European Communities on Package Travel, Package Holidays and Package Tours (901314/EEC) was implemented by the UK as from January 1993. This defined a package broadly as a pre-arranged combination of any two of three elements – accommodation, transport and an additional service (such as fishing rights, theatre tickets or guided tours). For the third component to apply, it would have to represent a significant element in the customer’s holiday choice.

Independent travel is different from the traditional package holiday which involves the simultaneous purchase of at least two elements of a holiday by the traveller: fares on public transport (e.g. flights) and commercial accommodation (e.g. hotel or self-catering apartment) or services such as theatre or concert tickets.

Independent travel is different from the traditional package holiday

In practice, the market comprises a continuum of travel arrangements, rather than an either-or pattern, stretching from the fully packaged, all-inclusive tour, through to the completely independent journey in which the traveller arranges transport and accommodation separately (without even consulting a travel agent) and may not even book the return fare in advance.

In 2002, more than half (52%) of all holiday visits abroad were made with a package tour and 48% were independent visits. As we will demonstrate, the share of independent travel could already be even bigger.

Just under half of all holidays were independent visits

When one examines the growth of independent and package holidays over the 1967–2002 period, one can observe a near-steady increase in the



growth in independent holidays. There has also been an upward trend in the growth in package holidays, although the growth has been somewhat more volatile. Each time package tour growth seems to wane, for example in 1992 and 1996 (see Figure 4.13), there is an almost immediate rebound in the demand for package holidays. At the same time, it seems as though despite the “hype” about independent holidays, the value and volume of package tours sold every year increases, albeit more slowly in recent years. Figure 4.13 Independent vs. Inclusive Travel, 1998 – 2002

Source: Travel Trends (several issues), Office for National Statistics 2004 The growth in independent holidays and their significance, compared with package holidays, is and continues to be, a hotly debated topic among industry observers. The role and significance of independent travel have profound implications for the traditional package holidays offered by tour operators. The more holiday-makers decide to travel independently, the less will be the demand for the traditional “bread and butter” holiday packages sold by the leading tour operators.



It is interesting to observe the simultaneous development of independent travel and the full “all-inclusive” package tour in the British market. It seems strange, at first glance, that British travellers opt for what seems to be two completely different holiday extremes – the “all-inclusive” package holiday and the independent holiday. The all-inclusive package tour is one of the most inclusive packages available. The price of the all-inclusive holiday includes all meals, snacks, beverages, sports equipment and instructions, government taxes and even gratuities! In Britain, there is a growing demand for all-inclusive holidays to the Caribbean and the Mediterranean, driven largely by considerations of value for money. British tour operators have successfully developed the short-haul all-inclusive market in the Mediterranean, and although there have been initial concerns about the quality and all-inclusivity of the Mediterranean resorts, much of the initial problems have been solved and short-haul all-inclusive resorts continue to be popular in the UK, especially for the traditional two-week summer sun holiday.

British travel demand is complex, as independent and all inclusive demand exist side by side

At the same time, there is a growing demand for independent, non-packaged holidays. That these two extremes (all-inclusive and independent travel) can exist side by side is linked to the extremely complex yet sophisticated British travel demand.

4.5.1 Top 20 Destinations for Package and Independent Travel

In 2004, Spain, France and Greece were the top three countries for inclusive holidays for UK travellers, accounting for 59% of total inclusive holiday visits (see Table 4.14). Some seven million visits were received by Spain – the top destination for inclusive package holidays. France was the second most popular destination, receiving 2.7 million visitors, and Greece the third most popular, with almost 2.4 million visits. North Africa and the Caribbean received just over 400,000 visits, while Central and South America received less than 250,000 visitors on inclusive tours.

Spain and France are the most popular destinations for package travel



Table 4.14 Top 20 Destinations for Inclusive Holiday Visits by UK Residents, 2002 Country Visited Visits

(‘000) Share (%)

Spain France Greece Cyprus Italy Portugal Turkey United States North Africa Austria Caribbean Malta Republic of Ireland Netherlands Belgium Central & South America Rest of Asia (excluding Hong Kong, India & Japan) Central & Eastern Europe Germany Canada

7,056 2,702 2,387

905 842 821 712 677 420 417 415 310 304 287 279 251 245

232 222 125

34.2 13.1 11.6 4.4 4.1 4.0 3.4 3.3 2.0 2.0 2.0 1.5 1.5 1.4 1.4 1.2 1.2

1.1 1.1 0.6

Source: Travel Trends 2003, Office for National Statistics, 2004 France and Spain are also among the top three countries for independent holidays by UK travellers. They represent just under 50% of the independent holidays taken by British travellers (see Table 4.15). These two countries are followed by the United States (7.7%) and the Irish Republic (7.0%) as significant destinations for independent holidays taken by UK travellers. Asia, in particular destinations such as India, is by far the largest destination for independent travel outside Europe and the USA. The Caribbean, Canada, Australia and South Africa are also significant destinations for independent travel.

Spain and France are also top holiday destinations for independent travel



Table 4.15 Top 20 Destinations for Independent Holiday Visits by UK Residents, 2002 Country Visited Visits

(‘000) Share (%)

France Spain United States Republic of Ireland Italy Netherlands Portugal Belgium Greece Germany Rest of Asia Cyprus Central & Eastern Europe Switzerland Caribbean Australia Canada South Africa Turkey India

4,869 4,323 1,484 1,342

978 842 755 511 395 390 352 281 247 236 214 200 174 169 155 135

25.3 22.4 7.7 7.0 5.1 4.4 3.9 2.7 2.1 2.0 1.8 1.5 1.3 1.2 1.1 1.0 0.9 0.9 0.8 0.7

Source: Travel Trends 2003, Office for National Statistics 2004 4.5.2 The March of Independent Holidays

Tourism Intelligence International believes that the growth in independent holidays will continue because of a number of factors:

1. Changing consumer tastes and lifestyles;

2. Package tours as a launch pad for independent holidays;

3. Growth in the seat-only market and

expansion of low-cost airlines;

4. Growth in accommodation-only sales and non-hotel accommodation;

5. Tour operators offering flexible,

independent options;

6. Growth in frequent flyer programmes;

Growth in independent travel will continue



7. Improved quality and standards of independent suppliers;

8. Growth in time-share business and property

ownership abroad;

9. Youth and gap-year travel; and

10. Internet. For these reasons, Tourism Intelligence International believes that the traditional demarcation between independent and inclusive holidays may be less significant in tracking the growth and development of the independent holiday market.

Recall that there are three main elements of the holiday package – air travel, accommodation and “other services”. The simultaneous sale of any two of these elements will constitute an inclusive tour package. The future of the inclusive tour package will therefore depend on the ability of the tour operator to continue to deliver at least two of these elements.

In Table 4.16 Tourism Intelligence International identifies the three main elements of the package holiday and the main factors that are pressuring the dismantling of the package holiday or the trend towards independent sales of each package. From Table 4.16, it can be seen that the major pressures for independent holidays are coming from the air travel and accommodation sectors. In the case of air travel, the growing importance of consolidations and rise of seat-only sales and low-cost airlines as well as frequent flyer programmes are driving British travellers to purchase/organise the air travel component of their holiday independently.

There is pressure being placed on the holiday package



Table 4.16 Pressures on the Package Holiday Air Travel Accommodation Other Services • Seat-only sales • Low-cost airlines • Frequent flyer

programmes • Fly and cruise

• Time-share • Rise of all-inclusive

hotels and resorts • Improved standards and

branding of independent accommodation

• Frequent flyer miles • Preference for non-hotel

accommodation • Tour operator flexible

offerings (e.g. seat only, hotel required)

• Consumer preferences • Growth in gap-year

travel

• Improved quality of suppliers

• Improved distribution channels of independent suppliers

• Increased branding and loyalty programmes, e.g. for hotels, car rentals, etc. included in all-inclusive resorts

I N T E R N E T Source: Tourism Intelligence International, 2005 The growth in time-sharing, improved branding and standards of independent accommodation establishments (e.g. Relais Chateau, Four Seasons, Romantik Hotels, Accor, SuperClubs and Silence Hotels), and the preference for non-hotel accommodation, are all driving British travellers to secure accommodation independently. The Internet is having an impact on all elements of the package – air travel, accommodation and “other services”.

As yet, many of the on-site services that fall into the “other services” category are generally disorganised. Only all-inclusives and some special-interest activities, such as ski holidays, have systematically organised their services under one umbrella. This high degree of organisation, together with good brand awareness, will make these services ideal candidates for independent travel.

Need for branding and organisation of on-site services

The Internet (see Section 4.5.11) is having far-reaching impact, making it easier to book accommodation, travel and services at the destinations, all independently. The Internet is especially changing the face of the “other

The Internet is affecting all elements of the package holiday



services” component. The Internet is proving to be a great equaliser. The Internet can make small remote suppliers as visible as large suppliers. Not surprisingly, many Internet providers are targeting specialist services such as skiing. There are fewer pressures driving the independent demand for “other services” at the destination. The Internet is one of the main driving forces. The organisation and packaging of these other services (e.g. sports & special interest) will be an important avenue for tour operators to recapture their increasingly independent clients. This will call for even more co-ordination and control of the product and far better quality and packaging of services, as well as the implementation of important measures on standards, training, quality, environment protection and infrastructure provision on the part of the destinations themselves. On the other hand, independent operators all continuously need to improve their products and standards, invest in technology and form alliances with tour operators and other suppliers in order to capture market share and satisfy clients.

Improved branding and standards will also drive independent travel

It is perhaps because cruise lines and all-inclusives have “captured” the other-services sector and have integrated these services into their product, that they have emerged as one of the most successful travel and tourism leisure suppliers today.

In what follows, we review the factors that are driving the growth of the independent travel market in Britain.

In fact, with the growing trend towards “experience” travel, it is more and more critical for suppliers to bundle these “experiences” (on site services) as part of their product/experience offer. This is analysed in Tourism Intelligence International’s publication, Successful Hotel and Resorts – Lessons from the Leaders (July 2005).



4.5.3 Changing Consumer Tastes and Lifestyles

One of the main characteristics of the British travel market is its growing sophistication. The British have travelled. It is relatively easier for Europeans, e.g. Germans, to travel within Europe. Travel by Germans to Austria and Italy, for example, is a relatively short drive by car. For residents of Britain, 74% of all travel abroad involves travel by air. The British are experienced travellers. More British residents as a percentage of their travelling population travel to long-haul destinations than their counterparts in Germany.

The British market is sophisticated

It is the growing experience and sophistication of British travellers that is driving the demand for independent, non-packaged holidays. Very importantly, also, the British feel very comfortable travelling abroad and some are definitely more risk-taking than their US, German and Japanese counterparts. This thirst for independence and independent travel is being supported by a number of related developments, such as the growth in the seat-only market and the widespread use of the Internet for travel bookings. Traditional tour operators’ offerings are being used as launch pads for more independent holidays. In addition, tour operators themselves have begun to offer their clients more choice and flexibility.

4.5.4 Package Tour as a Launch Pad for Independent Holidays

The traditional package tour is increasingly being used as a launch pad for independent holidays. As consumers travel abroad more, there is a greater willingness to “go it alone”. However, as tour operator prices for the package holiday tend to be lower than seat-only options, particularly on scheduled carriers, clients are still willing to purchase the tour operator standard packages and use them as a “launch pad” for their more individual and independent holidays. It is not unusual, for example, for customers to buy the holiday package from the tour operator, stay in the “packaged” hotel for some of the nights, rent a car, go touring and stay at alternative types of

Traditional packages are launch-pads for independent holidays



accommodation for some nights, then take the return flight home with the tour operator. The emergence of this hybrid demand is an important development. It means that the traditional dichotomy between independent and inclusive holidays may be less and less significant in the future. This means that tour operators, destinations and other package suppliers cannot sit comfortably simply by looking at how many “more” packages were sold and the simple shares of inclusive versus independent travel as a guide to the development of this important independent travel market. At present, there is little data to capture exactly the growth of the hybrid inclusive/ independent segment of the market. However, Tourism Intelligence International believes that the internal dynamics of the British travel market and specific consumer preferences are changing so rapidly and radically, that there could already be more independent travellers than package holiday tourists, despite the category of travel measured by the statistics. What is more, we believe that the independent travel market will continue to grow.

4.5.5 Growth in Accommodation-only Sales and Non-hotel Accommodation

Another important development in holiday types is the rise in accommodation-only sales, as a direct impact of the growth in low-cost airline seats. Passengers are tempted by the low fares, then look to the tour operators to sell them accommodation-only to go with the low-cost flights. As passengers become more confident in putting their own holidays together, especially with Internet access, this trend is expected to grow. At the same time, operators expect to see flight-only growth as property ownership overseas and Internet usage increases.

Passengers are tempted by low fares

The growing desire for independence on the part of British travellers is asserting itself in the preference for non-traditional accommodation options.



British residents’ preference for staying at hotels is diminishing in favour of rented villa/flat accommodation. In 1978, almost 60% of all British travellers opted for hotel/motel accommodation and another 20.6% opted to stay at the homes of friends and relatives, while 7.5% stayed at a rented flat or villa. By 1998 (latest year for which data are available), about half of all travellers (45.4%) opted for hotel/motel accommodation; 15.7% opted to stay at friends and relatives and 20.4% stayed at a rented villa or flat. Rented villas offer the ultimate in flexibility, especially those which are staffed, where meals and services are “on demand” rather than fixed and pre-arranged as in traditional tour operator packages and hotel offerings.

The British preference for staying at hotels is diminishing

Many UK tour operators have expanded their programmes to offer villas and other rented accommodation, allowing their clients the flexibility to enjoy their holiday at their own pace. Some operators offer villas only, some include airline seats and car rental, depending on the needs of their clientele.

4.5.6 Tour Operators Offer Flexible, Independent Options

Another significant development in the travel market is the dynamism of the UK tour operator market. UK tour operators have not just sat back and observed their clients wanting more flexible options and done nothing. Tour operators have also become more flexible in their package offerings, allowing their clients to virtually “mix and match” or tailor-make their own packages. The Internet and other information technologies being adopted by tour operators will allow them to be even more flexible in their product offerings. Tour operators have also been very aggressive in targeting lifestyle segments of the British market, with many tour operators offering dedicated brochures for weddings and honeymoons, couples, families, the 18–30-year-olds, the over-50-year-olds (Saga Holidays), adventure, golf, cruises, etc. Tourism Intelligence International expects that tour operators will continue to offer flexible options to their clients, continuing to blur the traditional distinction

The UK tour operator market is dynamic



between packaged and independent travel and fundamentally transforming the role of the tour operator in Britain’s radically changing travel and tourism industry. 4.5.7 Growth of Frequent Flyer Programmes

The growth of frequent flyer programmes and participation therein is another factor that will increasingly tend to “unpackage” the traditional holiday package and give impetus to more independent holidays. Dreamt up 20 years ago by American Airlines, frequent flyer miles have become a powerful marketing tool. In the USA, frequent flyer miles have almost become a national addiction and a second national currency. Few anticipated how far consumers would go to get the extra mile. The public perceives miles to be more valuable than they really are. More than 40 million consumers are members of frequent flyer programmes. For companies offering frequent flyer miles, this has proven to be a demographic gold mine. Consider that frequent flyers spend more on their dinner bill than a non-frequent flyer.

Frequent flyer programmes encourage travellers to book travel independently

With “a mile a dollar” or “mile a Euro” offered by most credit card companies, building a house using a credit card could mean than you can earn enough miles to travel free for a lifetime. With airlines and suppliers both profiting, mileage offers appear to be a new staple in the marketing diet and not just a marketing fad. The Virgin Flying Club, for example, has a special at Marco Polo hotels where, if you spend three nights, you can earn triple miles.

With more and more consumers owning miles, there will be a greater tendency to book seats with miles and secure accommodation from a different source. Frequent flyer programmes are very likely to contribute to the value and volume of independent travel from Britain.

4.5.8 Improved Quality and Standards of Independent Suppliers

Another important factor driving the demand for independent holidays is increased quality and standards offered by independent suppliers.



Excellent examples of independent brands include, for example, the Romantik Hotels in Europe, the Elegant Resorts, Sandals, SuperClubs and Almond Resorts in the Caribbean, Conservation Corporation Game Lodge in Southern Africa and many others. With quality and standards assured at the destination, British customers are more and more confident in putting together their holidays independently. Independent suppliers will need to go a step further in their product offer, controlling as many aspects of the holiday experience at the destination to win the confidence of independent travellers. Even for all-inclusive suppliers who have the quality of their products under control, the traditional “all-inclusive” offer must undergo further transformation to make it suitable for the more independent traveller. We will see, for example, that a choice of restaurants is a key preference of customers at all-inclusive resorts, as well as complementary transportation to nearby sites and shopping.

Independent suppliers need to continue to improve on quality and standards

4.5.9 Growth of Time-share Business and Property

The rapid growth of time-share ownership among the British means that, with accommodation in hand, there is less need to purchase the standard holiday packages. Seat-only sales and independent travel are a logical outcome of time-share resort ownership. Time-sharing is therefore an important factor that will drive the growing trend toward independent travel in the UK market.

The British market is the second largest worldwide market for time-sharing, after the USA. More than 400,000 Britons own timeshares around the world, mainly in the Mediterranean (see Table 4.8). In Spain, for example, British residents have timeshares in properties in Malaga, Tenerife, Arecife, Alicante and Las Palmas.

More than 400,000 Britons own timeshares around the world

The top 10 timeshare locations are USA, Spain, Mexico, Italy, South Africa, France, Argentina, Portugal, Canada and Japan.



Time-sharing is an arrangement involving the purchase of vacation time at a specified tourist resort. It amounts, for example, to owning time (usually one week) of one apartment/ hotel room in a resort apartment, for a number of years (spanning the life of the unit), usually 20 years. Timeshare resorts first appeared in the mid-1960s, although growth was slow during the first two decades. At the beginning of the 1980s the time-share industry counted a mere 155,000 owners with intervals in 506 resorts worldwide. From 1985 to 1998, time-sharing grew by an annual average of between 10% and 15%. By 1998, there were some 5 million timeshare owners in 5,156 timeshare projects, generating sales of US$6.1 billion. By 2002, these figures had increased to 6.7 million owners and 5,425 projects, generating worldwide sales of $9.4 billion (see Table 4.17).

Time-sharing generated US$9.4 billion in sales in 2002

The main reasons why consumers buy timeshare are:

• Flexibility (including location, unit size and time of year);

• Opportunity to exchange with other

resorts;

• Certainty of quality accommodations; and

• Credibility of the timeshare company. (Source: American Resort Development Association, 2005)



Table 4.17 Time-Share Markets and Destinations, 2002 Residents owning Timeshares United States Rest of World - of which the United Kingdom Total

3.0 million 3.7 million

405,000 6.7 million

Number of Timeshare Resorts United States Rest of world Total

1,590 3,835 5,425

Sales United States Rest of World Total

$5.5 billion $3.9 billion $9.4 billion

Source: Timeshare Industry: Facts at a Glance (American Resort Development Association, 2003) Tough regulations on the timeshare industry will further clean up the image of time-sharing and increase industry growth.

4.5.10 Youth and Gap-year Travel

The student travel market is an important and growing source of independent travel. There is an established pattern in the UK for students going into tertiary education to take what is called a “gap year”, either in the period between finishing school and beginning university, i.e. at around age 18/19 years, or, more usually, following their university course, at age 21/22 years.

In a recent report (Review of Gap Year Provision by Dr Andrew Jones, University of London, April 2004), a gap year is defined as “any period of time between 3 and 24 months which an individual takes ‘out’ of formal education, training or the workplace, and where the time out sits in the context of a longer career trajectory”. In reality, most young people take a period of time out of around a year.

The student travel market is a growing source of independent travel

The taking of a gap year has become a growing phenomenon amongst young people in the UK over the last decade. From a position in the 1980s where taking a year out either between school and



university or after university was relatively rare, during the 1990s there has been a substantial increase in its popularity. Quantification of gap year taking is difficult however as no comprehensive national level data sources for all possible categories of gap year participant exists. In the UK, the gap year travel market comprises approximately 1% of all UK outbound trips and around 10% of outbound travel expenditure.

Gap year takers tend to have a series of characteristics as a social group: • Predominantly white with few ethnic

minority participants; • Women outnumber men;

• From relatively affluent ‘middle class’

backgrounds; • Over-representation of private and

grammar school backgrounds; • Under representation of persons with

disabilities; and • Geographically, gap year participants are

mainly from the southern English Higher education institutions.

In this context, the last ten or fifteen years or so has also seen a significant growth in organisations providing opportunities for young people to undertake during their gap year. A commercial gap year industry sector has emerged in the UK consisting of a large number of diverse gap year activity providers offering a huge range of different potential activities for young people to undertake during their year out. These range through paid and voluntary work, various forms of training, travel and leisure activities located both in the UK and across the globe.

Development of a commercial ‘gap year’ industry

Gap year students are relatively well educated and have already frequently travelled extensively within Europe, and often further afield, with their parents. Long-haul trips have been fuelled by

Far East and Australia are appealing



cheap air tickets and prices within the destination. The Far East and Australia are particularly appealing to this group who want to enjoy the freedom of unlimited time to travel before they commit themselves to the rigours of finding and keeping a job. They tend to seek more unusual locations especially and those that have not yet become fully established as tourism destinations – Cambodia, for example, is currently of interest. Travel books that are particularly popular with student travellers, and on which they rely for a good deal of start-up information, are the Lonely Planet and Rough Guides, which include descriptions of budget operations within the country concerned. Student travellers tend to buy their tickets from consolidators, either those especially targeted at the student market or more general bodies such as Trailfinders. The principal student travel organisation in the UK is the Student Travel Association (STA), a worldwide body that has some 40 offices in the UK and more than 250 branches around the world. These student travellers, once they experience the adrenaline, freedom and flexibility of travelling independently, are very likely to continue this pattern in their future travels.

Independent travel par excellence

4.5.11 Internet

The Internet is another factor driving the independent travel market as consumers can more directly buy seats-only or accommodation-only, for example, at prices that are highly competitive with the traditional tour operator offerings. Already, tour operators believe that the biggest areas of Internet bookings will come from independent segments. Tour operators indicated that the impact of the Internet will be higher on the simple product such as fly and room only, and city breaks, and not for complex itineraries, especially the Far East, or difficult destinations with language barriers.

Internet – Driver and facilitator of independent travel

Holidays which are modular in style, in English-speaking countries, are expected to be sold more via the Internet, because passengers are more comfortable with them. Flight-only sales, including low-cost airlines, will be on the



increase, in turn giving rise to an increase in accommodation-only purchases, e.g. via tour operators. In the fourth quarter of 2004, 52% of households in the UK (or 12.6 million) could access the Internet from home, compared with just 9% (or 2.2 million) in the same quarter of 1998, according to the Office of National Statistics (ONS).

12.8 million households online in the UK

The UK remained the largest online travel market in Europe in 2003, accounting for 39% (up from 36% in 2001) of the European online travel market, according to the study (updated in May 2004) “Trends in European Internet Distribution – of Travel and Tourism Services” by Carl H. Marcussen of the Danish-based Centre for Regional Tourism Research.

UK the largest online travel market in Europe

The UK became the largest online travel market in Europe in 1999, and extended its lead during 2000, 2001 and 2002. According to the Centre, during 2003 in the UK accommodation bookings made on the Internet showed an increase of 80% when compared to 2001. The Centre says that the consumer experience of booking no-frills carriers online has given people confidence to book a hotel online as well.

4.5.12 Travel Blogs

A growing number of travellers are using traveller’s online journals (or travel blogs) to plan their trips. A recent article in the Wall Street Journal quotes one international traveller as saying that travel blogs are a valuable resource because they are based on people’s experiences, and usually advise holidaymakers to ‘try this out,’ and ‘go here,’ whereas a travel book may not. The articles indicates that such blogs (shorthand for web logs) typically use words and photographs to describe their experiences and impressions of a place, often providing a good sense of what it feels like to visit a place.

Growing use of traveller’s online journals (travel blogs) to plan trips.

On the plus side, the article indicates that blogs are timely (avoiding the lapse between editions of printed guidebooks), idiosyncratic and full of detail but on the downside a good travel blog for



one person may not be a good blog for all. Experts recommend that people look for blogs written by those appearing to be on the same travelling wavelength and socio-economic level as themselves. Travel companies have been racing to capitalise on the popularity of travel blogs by letting website visitors browse other travellers’ journals.

4.6 Emerging Trends and Implications for Your Business

The British travel market is experienced, mature and demanding. Tour operators have proven themselves to be very adaptable, providing the flexibility that their customers increasingly demand.

British travellers are also experienced travellers and are very comfortable with travelling to faraway destinations. We expect continued growth in the following preferred holiday types in the next five years: • Cruising • Independent travel • Short break • All-inclusive • Special interest/niche areas/activity

holidays/safari adventure

In addition, there are a number of key emerging trends in the British travel and tourism industry to which suppliers will need to adapt.

Tourism Intelligence International’s British tour operator survey confirmed a number of key trends developing in the British travel market. These are summarised in Figure 4.18.



Figure 4.18 Emerging Trends in the British Market, 2005 From To Rigidly Packaged Independent

Short Haul Long Haul

Long Holiday Short Holiday

Saturated Areas New, untouched areas

Sand and Sea Exotic, green

Do nothing Activity-oriented

Down-market Quality

Source: Tourism Intelligence International, 2005 In addition to these trends, the Internet and technology on the whole are producing far- reaching impacts (see Chapter 7).

An important trend is the increased demand for long-haul travel. British travellers are so experienced and comfortable with travel that they are travelling farther and farther away. The thirst for new, faraway destinations is being firmly entrenched. One must remember that Britain is an island – travel abroad for three-quarters of travellers is by air. While Germans travel to Europe with ease by car (e.g. to Austria, Italy), for the British, travel to Spain and Italy has always been made a more medium- than short-haul destination. Today, therefore, adding on a few hours and travelling to farther and more exotic destinations is becoming the norm.

Increased demand for long-haul travel

Another trend is for British travellers to move away from saturated areas into new, untouched areas. This trend will continue. Those destinations that can offer new and different experiences will win.

There is also a significant trend toward organising travel independently as opposed to the traditional package, although the independent travel could be to same destinations, perhaps more “off the beaten track” (e.g. Andalucia, South of France).



There is also a growing trend towards more quality up-market resorts, choosing to book these independently and directly. British travellers are increasingly demanding quality in every element of their holiday.



Where The British Travel

As we have seen in Chapter 3, the British have a growing preference for holidays abroad. In 1965, only 14.3 % of British residents travelled abroad on holiday trips of 4 + nights compared with 85.7% who took similar holidays within the United Kingdom. By 1998 (based on the final year of the former British National Travel Survey) more than half (52%) of all such holiday trips were taken abroad. However, based on information contained in the new UK Tourism Facts (published by Star Check as replacement for the former British National Travel Survey), nearly three-fifths (58.7%) of all holiday trips were still taken within the United Kingdom in 2003, an increase over 2002 figures (53%). Both series showed a continuing decline in the proportion of domestic holiday trips with the exception of last year.

The British have a growing preference for holidays abroad

Of those who travelled abroad in 2003, some 78% chose destinations within Europe a decline over 2002 (80%). Of the remaining number who travelled outside of Europe, the Americas (including North America, Canada, Central and South America and the Caribbean) accounted for 45% of the total compared with 55% in 1998, followed by East Asia & the Pacific (28%), Africa (11%), the Middle East (10%) and South Asia (6%).

The majority travel to Europe

5.1 Destination Britain

The British have a growing preference for holidays abroad. For the past four decades, the percentage of all holiday trips that Britons have been taking at home rather than abroad has been decreasing. From a high of 85.7% in 1965, the share of all 4+ night holiday trips taken domestically fell to 50% in 1998, and (under the new statistical series introduced in 2000), the share continued to decline from 55.7% in 2000 to 53.1% in 2002 (see Table 5.1).

Just under half of holiday trips are to destinations abroad

5

© Tourism Intelligence International 5: Where The British Travel


140

Between 1989 and 1998, the number of domestic holiday trips declined by 14.3%, with a further decline of 4.1% between 2000 and 2002 (see Table 5.2).

Decline in trips within the UK

Table 5.1 Share of Domestic Trips and Trips Abroad 1965-2002 Year

Domestic Trips (4+ nights holiday)

Trips Abroad (4+ nights holiday)

1965 1970 1975 1980 1985 1990 1995 1998 1999 2000* 2001* 2002*

85.7% 85.7% 83.3% 75.3% 67.7% 61.3% 55.9% 50.1% N/A

55.7% 53.9% 53.1%

14.3% 14.3% 16.7% 24.7% 32.3% 38.7% 44.1% 49.9% N/A

44.3% 46.1% 46.9%

* new series; data not comparable with that for earlier years Sources: 1965-1998: British National Travel Survey (survey ceased in 1998) 2000-2002: UK Tourism Facts (Star UK, Department for Culture, Media and Sport). Between 1989 and 1998, the number of domestic holiday trips declined by 14.3%, with a further decline of 13.4% between 2000 and 2003 (see Table 5.2). Unless major efforts are taken to reverse this trend, it is expected that Britain will continue to lose market share vis-à-vis destinations abroad.

5: Where The British Travel © Tourism Intelligence International


Table 5.2 Declining Preference for Travel Within Britain, 1989-2002 Year

No. of Domestic Trips (4+ nights holiday)

Percentage Change

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000* 2001* 2002* 2003*

31.5 32.5 34.0 32.0 32.5 31.5 33.0 30.5 30.0 27.0 N/A 38.8 37.4 37.2 33.6

-5.97% 3.17% 4.62% -5.88% 1.56% -3.08% 4.76% -7.58% -1.64%

-10.00% N/A N/A

-3.61% -0.53% -9.67%

* new series; data not comparable with that for earlier years Sources: 1965-1998: British National Travel Survey (survey ceased in 1998) 2000-2002: UK Tourism Facts (2004) 5.2 Destination Europe

In 2002, Europe accounted for some 80% of all travel flows outside of the UK. The Americas accounted for just under 9%, of which North America (7%), the Caribbean (1.3%) and Central & South America (0.6%). East Asia & the Pacific attracted 5.6% of total trips abroad; followed by Africa (2.1%); the Middle East (1.9%); and South Asia (1.1%) (see Figure 5.3).

80% of British travellers visit Europe



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Figure 5.3 Share of UK Trips Abroad, 2002

Europe80.4%

South & Central America0.6%

Caribbean1.3%

Africa2.1%

South Asia 1.1%

North America7.0%

East Asia & Pacific5.6%

Middle East1.9%

Source: World Tourism Organization, 2004 Europe’s share of the UK outbound market has been relatively consistent since 1988. In that year, 82.7% of all UK outbound travellers visited Europe. In 1996, this share had fallen to 78.1% but since then there has been a rebound to 80.4% in 2002 (see Figure 5.4).

Figure 5.4 Development of European Market Shares, 1992-2002

0%

20%

40%

60%

80%

100%

ROW 5.686 6.309 6.515 6.604 7.699 8.128 8.354 8.765 9.546 10.531 11.553 13.063 12.888 12.715

Europe 27.111 28.031 27.485 27.412 29.611 30.228 35.728 34.919 33.991 36.886 45.240 48.968 51.246 52.129

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1999 2000 2001 2002

Source: World Tourism Organization, 2004 As can be seen from Figure 5.4, Europe has been losing its market share of UK outbound travellers, albeit marginally, to the rest of the world. It is probable that this marginal decline in the share of UK travellers going to Europe will accelerate to the benefit of long-haul destinations. Already, there is perceptible growth in UK travel to long-haul destinations (especially those outside North



America). Reflecting this, the rest of the world’s (ROW) share of UK trips abroad has increased from 17.3% in 1998 to 19.6% in 2002. Within Europe, the favourite destinations for the British are France, Spain, Ireland, Greece, Italy, the Netherlands, Portugal and Germany.

In 2002, France and Spain each accounted for some 28% of total trips by British residents to European destinations, followed by Ireland (7.7%), Greece (5.5%), Italy (5%), the Netherlands (3.5%), Portugal (3.5%) and Germany (3.1%). The rest of Europe attracted 15% of UK trips to Europe (see Figure 5.5).

France and Spain are the most popular destinations in Europe

Figure 5.5 Country Share of UK Trips Abroad to Europe, 2002

Source: World Tourism Organization, 2004 Between 1998 and 2002, the greatest rates of growth in UK arrivals in European destinations were recorded by Croatia (75.3%), Bulgaria (53.6%), Greece (39.8%), Italy (37.4%) Denmark (33.8%), Cyprus (31.8%), Spain (29.2%) and Belgium (22.3%).

Most dynamic growth experienced by Croatia and Bulgaria



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Among the top ten destinations, Ireland (7.5%), Portugal (6.9%) and Germany (3.97%) experienced relatively modest growth (see Table 5.6).

Table 5.6 UK Arrivals (trips abroad) to Selected European Destinations, 2002

Country

No. of Arrivals (2002)

% Growth (2002/1998)

Croatia Bulgaria Greece Italy Denmark Cyprus Spain Belgium Austria Hungary France Netherlands Switzerland Finland Czech Republic Ireland Portugal Germany

132,160 124,382

2,858,360 2,624,903

110,557 1,337,646

14,697,387 1,250,298

684,839 142,663

14,779,000 1,851,200

619,313 152,022 286,746

4,009,000 1,841,770 1,644,506

75.30% 53.61% 39.82% 37.36% 33.80% 31.76% 29.24% 22.31% 21.34% 17.57% 16.16% 15.84% 12.72% 12.60% 11.77% 7.51% 6.90% 3.97%

Source: World Tourism Organization, 2004 Over the period 1988 to 2002, the most dynamic growth in arrivals from the UK has been experienced by Cyprus, Belgium and the Netherlands. In contrast, the growth in UK travel to Germany, Ireland and Spain has been relatively modest.

Most dynamic growth experienced by Cyprus and Belgium



Figure 5.7 Comparative Growth in UK Arrivals to Selected European Destinations, 1998-2002

Source: World Tourism Organization, 2004 5.3 Destinations Outside of Europe

In 2002, destinations beyond Europe accounted for just under 20% of total UK trips abroad. Nevertheless, British travellers contribute significantly to the economies of many of those destinations, for example, in the Caribbean whose economies are among the most tourism-dependent in the world. In 2002, a total of 826,398 Britons visited the Caribbean.

In 2002, North America (USA and Canada) accounted for the largest share (35.9%) of UK arrivals in destinations outside Europe, followed in order of market share by East Asia & the Pacific (28.5%); Africa (10.9%); the Middle East (9.8%); the Caribbean (6.5%); Central and South America (2.9%); and South Asia (5.5%). See Figure 5.8.

North America accounts for the largest share of UK arrivals outside Europe



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The top four British long-haul destination regions in 2002 were: 1. North America (36% market share ) 2. East Asia & Pacific (28.5%), mainly

Australia, Thailand, Singapore, Hong Kong, and China

3. Africa (11%), mainly South Africa, Tunisia,

Kenya and Morocco 4. The Middle East (10%), mainly the United

Arab Emirates (especially Dubai) and Egypt

Since 1998, the Middle East has overtaken the Caribbean (6.5%) for the fourth position (see Figure 5.8).

Figure 5.8 The UK Outbound Market Beyond Europe, 2002

Source: World Tourism Organization, 2004 5.4 The Americas

In 2002, the majority (79%) of UK arrivals to the Americas were to North America. The USA alone accounted for 66.2% of the total. The USA is followed by the Caribbean (14.3%), Canada (13%), South America (5.2%) and Central America (1.3%) (see Figure 5.9).

USA receives two-thirds of UK arrivals to the Americas



Figure 5.9 UK Arrivals to the Americas

USA

67%

Caribbean

14%

Canada

13%

Central America

1%

South America

5%

Source: World Tourism Organization, 2004 Since 1988, the most dynamic growth in UK arrivals to the Americas has been to South and Central America, followed by the Caribbean (with the exception of the years 1998, 1999 and 2002), the United States and Canada. Only Central America escaped the general downturn in UK arrivals to the Americas in 2002 following the events of 9/11 in the previous year (see Figure 5.10).

South America has experienced the most dynamic growth

Figure 5.10 Comparative Growth in UK Arrivals to the Americas, 1988-2002

Source: World Tourism Organization, 2004



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In 2002, Barbados and the Dominican Republic were the most-visited destinations by Britons, accounting for 23.3% and 17.7%, respectively of total UK arrivals in the Caribbean. They were followed in terms of market share by Jamaica (15.2%), Cuba (12.5%), St. Lucia (7.7%), Trinidad & Tobago (6.3%), The Bahamas (5.7%) and Bermuda (3.1%) (see Figure 5.11).

Barbados and the Dominican Republic are the most visited destinations in the Caribbean

Figure 5.11 UK Arrivals to Selected Caribbean Destinations, 2002

Barbados22%

Dominican Republic18%

Jamaica15%

Cuba13%

St. Lucia8%

Trinidad & Tobago6%

Bahamas6%

Bermuda3%

Other9%

Source: World Tourism Organization, 2004 Within the Caribbean, the most dynamic growth since 1988 has been to Jamaica, St. Lucia and Barbados. However, in recent years, both Barbados and Jamaica have recorded decreases from the peak figures registered in 2000 (see Figure 5.12).

Jamaica shows the most dynamic growth



Figure 5.12 Comparative Growth in UK Arrivals to Selected Caribbean Destinations, 1988-2002

Source: World Tourism Organization, 2004 In 2002, two-fifths of all UK visits to Central and South America were to Brazil. However, it should be noted that the 2002 figures exclude Argentina (which received 24% of all UK visits in 1998) as well as other destinations for which information is not available. Because of this, the data should be used cautiously. After Brazil, the next largest reporting destinations for British arrivals in 2002 were Peru, Chile, Venezuela. Costa Rica and Belize (see Figure 5.13).

Brazil is the most popular destination in South America

Figure 5.13 UK Arrivals to Selected Destinations in Central and South America, 2002

Brazil

40%

Venezuela

7%Chile

10%

Peru

11%

Costa Rica

5%

Belize

3%

Other

24%




150

Since 1988, Chile, Costa Rica and Brazil have been the most dynamic destinations within the region for British travellers. Between 1998-2002, Brazil has recorded a particularly high average annual rate of growth of 5.7% from the British market (see Figure 5.14).

Chile, Costa Rica and Brazil show the most dynamic growth

Figure 5.14 Comparative Growth in UK Arrivals to Selected Destinations in Central and South America, 1988-2002

Source: World Tourism Organisation, 2004 5.5 Africa

In 2002, almost one-third of UK arrivals to the African region went to South Africa (32%). South Africa was followed by Tunisia (18.7%), Kenya (11.2%), Morocco (10.6%), Mauritius (5.85%), Zambia (4.6%), Tanzania (3.1%) and Ghana (3%) (see Figure 5.15).

South Africa and Tunisia are the most popular destinations in Africa



Figure 5.15 UK Arrivals to Selected African Destinations, 2002

Source: World Tourism Organization, 2004 Within the African region, the most dynamic growth is seen in Zambia, This is followed closely by Mauritius and South Africa.

Zambia has experienced the most dynamic growth

The rate of growth in UK travellers to Tunisia and Kenya has been relatively flat, with Tunisia experiencing a sharp decrease in 2002 (see Figure 5.16).

Figure 5.16 Comparative Growth in UK Arrivals to Selected African Destinations, 1988-2002




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5.6 East Asia & Pacific

In 2002, Australia received the largest share (17.7%) of UK arrivals to the East Asia & Pacific region, followed by Thailand (15.8%), Singapore (12.7%), Hong Kong (10.5%), China (9.5%), Malaysia (6.6%), New Zealand (6.6%), Japan (6.1%) and Indonesia (4.4%) (see Figure 5.17).

Australia is the most popular destination in East Asia and the Pacific

Figure 5.17 UK Arrivals to Selected Destinations in East Asia & the Pacific, 2002

Source: World Tourism Organization, 2004 Within the East Asia & Pacific region, China, Thailand and New Zealand have shown the most dynamic growth. Australia, Singapore, Hong Kong, Japan and Indonesia have also shown consistent growth, although the rate of growth in UK travellers to Hong Kong has been relatively flat in recent years while, following the Bali bombing, Indonesia suffered a sharp fall in UK arrivals in 2002 (see Figure 5.18).

China, Thailand and New Zealand show the most dynamic growth



Figure 5.18 Comparative Growth in UK Arrivals to Selected Destinations in East Asia & the Pacific, 1988-2002

Source: World Tourism Organization, 2004 5.7 Middle East

Nearly two-fifths of UK travellers to the Middle East visit the United Arab Emirates (mainly Dubai). Another 29% visit Egypt, followed by Bahrain (13%), Oman (6.4%), Saudi Arabia (6%), Jordan (2.8%) and Lebanon (2.3%) (see Figure 5.19).

United Arab Emirates and Egypt are the most popular destinations in the Middle East

Figure 5.19 UK Arrivals to Selected Destinations in the Middle East, 2002




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Syria showed the most consistent growth until 1996 but has since (apart from 2000) recorded a significant fall in the rate of growth.

United Arab Emirates have shown the most dynamic growth

More recently, the United Arab Emirates (especially Dubai) and Oman have experienced the fastest rate of increase in UK arrivals. Arrivals in Egypt fell sharply in 1998 in the wake of the Luxor attack, but recovered strongly in 1999 and 2000 (see Figure 5.20). For a more detailed analysis of Dubai, refer to Tourism Intelligence International’s report on Successful Tourism Destinations – Lessons from the Leaders, 2004.

Figure 5.20 Comparative Growth in UK Arrivals to Selected Destinations in the Middle East, 1988-2002

Source: World Tourism Organization, 2004 5.8 South Asia

In 2001, over half (53%) of all UK arrivals to the South Asia region were in India, followed by Pakistan (19%), the Maldives (10%), Sri Lanka (9%) and Bangladesh (4.5%). Calculation of comparable figures for 2002 are affected by the lack of information for Bangladesh (see Figure 5.21).

India is the most popular destination in South Asia



Figure 5.21 UK Arrivals to Selected Destinations in South Asia, 2001

Source: World Tourism Organization, 2004 Within South Asia, the Maldives has experienced constant growth since 1991. UK arrivals in both Pakistan and Sri Lanka grew rapidly to 2000, but decreased sharply in 2001. Arrivals in India have tended to fluctuate from year to year, but the trend for Bangladesh has been steadily upward since 1998 (see Figure 5.22).

The Maldives have shown the most consistent growth

Figure 5.22 Comparative Growth in UK Arrivals to Selected Destinations in South Asia, 1988-2002


5.9 Comparative Growth among Regions and Countries

Although Europe is clearly the favourite destination for the British, in recent years there has been an increasing interest in long-haul destinations. Measured by the rate of growth over the period 1988 to 2002, the top three long-haul

Middle East, East Asia & Pacific and Central & South America are the most dynamic long-haul regions



156

regions are: 1. Middle East (United Arab Emirates and

Egypt) 2. East Asia & Pacific (Australia and Thailand) 3. Central & South America (Brazil and

Argentina)

North America is the least dynamic

The rate of growth in British travel to European countries - while still significant – has not been able to keep pace with that to most long-haul destinations. Although North America receives the lion’s share (36% in 2002) of UK long-haul traffic, its rate of growth has been lagging behind the other long-haul regions.

Growth in Europe has not kept pace

Whereas the Caribbean was the most dynamic long-haul destination for British travellers over the period 1988-98, growth has been sluggish in recent years.

Growth to the Caribbean sluggish in recent years

It should be noted that comparisons of growth rates for different regions are for reporting countries only and can be affected by inconsistencies in coverage.

Figure 5.23 Comparative Growth in UK Arrivals to Long-Haul Destinations, 1988-2002




Data for the more recent period 1998-2002 reveal somewhat different results. The top three long-haul destination regions in terms of average annual growth rates for that period still include the Middle East (14.1%) and East Asia & Pacific (6.8%), but Africa (13.5%) takes the place of Central & South America (6.1%).

Middle East and Africa show the highest percentage growth between 1998 and 2002

In Table 5.24, the absolute number of UK arrivals in each long-haul destination region and the respective average annual rates of growth over the period 1998-2002 are provided.

Table 5.24 Number of UK Arrivals to Main Regions of the World and Average Annual Rates of Growth, 1998-2002

Regions Arrivals (2002)

Average Annual Growth Rate (1998-2002)

Middle East South Asia Africa Central & South America East Asia & Pacific Europe Caribbean North America TOTAL

1,248,984 707,295

1,379,095 3,816,736 3,616,790

52,129,613 826,398

4,566,395 64,844,762

14.07% 1.64% 13.50% 6.07% 6.79% 4.89% -0.41% -1.10% 4.71%

Source: World Tourism Organization, 2004 Tables 5.25 and 5.26 provide data on the number of UK arrivals to key destinations around the world. It can be seen from Table 5.25 (where destinations are ranked by size in terms of the order of the number of UK arrivals) that, in 2002, the top European destinations for UK arrivals were Spain, France, Ireland, Greece, Italy Portugal, Germany, the Netherlands, Belgium and Cyprus, while the USA, Canada and Australia were the most visited destinations outside Europe.

In terms of average annual growth rates from the UK market over the period 1998-2002, only two of the top ten destinations are within Europe, namely Croatia (15.1%) and Bulgaria (11.3%). The other top ten destinations – all long-haul – were United Arab Emirates (21%), Cuba (12.7%),



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Egypt (11.6%), New Zealand (11.1%), Thailand (11%), Malaysia (10.5%), Morocco (9.5%) and China (9%). Table 5.25 Number of UK Arrivals Ranked by Size, 2002

Destinations Arrivals (2002)


France Spain Ireland United States Greece Italy Netherlands Portugal Germany Cyprus Belgium Turkey Austria Switzerland Canada Australia Thailand Sweden United Arab Emirates Singapore Malta South Africa India Hong Kong Egypt China Czech Republic Tunisia Norway Malaysia New Zealand Japan Poland Barbados Indonesia Bahrain Kenya Finland Pakistan

14,779,000 14,697,387 4,009,000 3,816,736 2,858,360 2,624,903 1,851,200 1,841,770 1,644,506 1,337,646 1,250,298

917,872 684,839 619,313 749,659 640,782 569,812 499,000 491,604 458,528 444,335 442,910 387,846 379,965 357,546 342,967 286,746 257,799 242,000 239,294 236,986 219,271 201,512 192,606 160,077 157,557 154,933 152,022 151,341

3.82% 6.62% 1.83%

-1.01% 8.74% 8.26% 3.74% 1.68% 0.98% 7.14% 5.17% 0.44% 4.95% 3.04% 0.08% 8.24%

10.96% N/A

20.96% 6.39%

-0.02% 7.43% 0.74% 1.86%

11.56% 9.01% 2.82%

-0.06% 0.63%

10.47% 11.15% 4.83%

-5.01% 7.12% 3.86% 7.91% 3.93% 3.01% 8.36%





Russian Federation Brazil Morocco Dominican Republic Hungary Croatia Jamaica Bulgaria Denmark Cuba

149,384 146,793 146,576 146,257 142,663 132,160 125,859 124,382 110,557 103,741

1.67% 5.72% 9.46%

-6.27% 4.13%

15.07% 1.95%

11.34% 7.55%

12.72%

Source: World Tourism Organization, 2004 Table 5.26 Number of UK Arrivals Ranked by Average Annual Rate of Growth 1998-2002



United Arab Emirates Croatia Cuba Egypt Bulgaria New Zealand Thailand Malaysia Morocco China Greece Pakistan Italy Australia Bahrain Denmark South Africa Cyprus Barbados Spain Singapore Brazil Belgium Austria Japan Hungary Kenya Indonesia

491,604 132,160 103,741 357,546 124,382 236,986 569,812 239,294 146,576 342,967

2,858,360 151,341

2,624,903 640,782 157,557 110,557 442,910

1,337,646 192,606

14,697,387 458,528 146,793

1,250,298 684,839 219,271 142,663 154,933 160,077

20.96% 15.07% 12.72% 11.56% 11.34% 11.15% 10.96% 10.47% 9.46% 9.01% 8.74% 8.36% 8.26% 8.24% 7.91% 7.55% 7.43% 7.14% 7.12% 6.62% 6.39% 5.72% 5.17% 4.95% 4.83% 4.13% 3.93% 3.86%



160



France Netherlands Switzerland Finland Czech Republic Jamaica Hong Kong Ireland Portugal Russian Federation Germany India Norway Turkey Canada Malta Tunisia United States Poland Dominican Republic Sweden

14,779,000 1,851,200

619,313 152,022 286,746 125,859 379,965

4,009,000 1,841,770

149,384 1,644,506

387,846 242,000 917,872 749,659 444,335 257,799

3,816,736 201,512 146,257 499,000

3.82% 3.74% 3.04% 3.01% 2.82% 1.95% 1.86% 1.83% 1.68% 1.67% 0.98% 0.74% 0.63% 0.44% 0.08%

-0.02% -0.06% -1.01% -5.01% -6.27%

N/A * new series Source: World Tourism Organization

Documents

British Travel Patterns - SETE library...outbound travel was observed in each year, with the exception of 1985 and 1991. Outbound travel from the UK even increased in 2001 and 2002