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Viewing report
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Travel Agents & Overseas Tour Operators Market Report
Key Note Publications Ltd, Nov 2010
In 2009, UK outbound tourism expenditure (excluding expenditure on travel fares to and from the UK) totaled £31.69bn, a 14% reduction compared with 2008. Expenditure on domestic tourism (excluding day trips) stood at £21.88bn, which was a 3.7% increase on 2008. Combined, the total UK resident tourism market contracted by 7.5% and was at its lowest level since at least 2005. Despite this decline, the turnover of travel agents and tour operators increased by 1.7% in 2009.
The UK outbound travel and tourism market was significantly affected by economic factors in 2009, as the recession, unemployment concerns, increasing levels of air travel taxation and a low exchange rate for sterling affected the propensity of consumers to travel abroad. By contrast, the UK domestic travel and tourism market enjoyed somewhat of a renaissance in 2009, as a weak pound made overseas holidays more expensive and many UK consumers chose to holiday at home in preference to travelling overseas.
The Government has indicated that it is unlikely to pay for the cost of the disruption caused by the volcanic ash cloud in April 2010 and that the airlines and travel agents should themselves meet the costs of the hotels, meals and taxis, etc., which were incurred by their customers during the crises. Thomas Cook has stated that the financial impact of the Icelandic volcanic ash disruption cost it £81.9m. TUI Travel reports that it lost around £105m owing to the volcanic ash disruption.
The coalition Government has announced that it will put forward proposals to reform Air Passenger Duty (APD) and replace it with a per-plane duty (PPD). APD has risen disproportionately in the UK in recent years and it is now seen as having the potential to seriously affect outbound and inbound tourism to the UK, especially long-haul travel. The travel and tourism industry supports the change to PPD but has concerns on the exact design, structure and level of any new aviation tax.
2010 is expected to be another difficult year for the UK outbound tourism market, as the recession and many of the other negative factors which affected the market in 2009 continue to have an impact. In contrast, the domestic tourism market is once again expected to benefit from the trend for `staycation' holidays and is forecast to show further growth. The turnover of the travel agents and tour operators is projected to fall in 2010, in line with the contraction in the overall value of the UK resident tourism market, but then return to growth in 2011.
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