All-Inclusive Holidays Market Assessment 2012
Key Note Publications Ltd, January 2012, Pages: 121
The all-inclusive holiday market has altered considerably since this Key Note Market Assessment was last published in 2000. Budget airlines and the increasing liberalisation and expansion of the EU’s borders have opened up new holiday destinations to many UK customers at affordable prices. Low-cost airlines now represent significant competition for travel agents and tour operators, and many holidaymakers now prefer to individually package their own holidays.
Self-package holidays have further been facilitated by the rapid rise in significance of the Internet, which has put pressure on high street travel agents and tour operators. The Internet made it much easier for consumers to research and organise their own holiday independently and, as a result, the popularity of all-inclusive holidays has declined somewhat in recent years. Last-minute deals have also become more popular, allowing many to book their summer holidays at a moment’s notice. This has affected a key revenue stream, whereby customers previously booked their holiday well in advance, for both travel agents and tour operators.
Up until the recession, domestic holidays were struggling in comparison to outbound holidays, although the outbound market was still not growing at a significantly fast rate. When the UK economy was at its worst in 2009, the number of outbound holidays taken by UK residents fell by 15.4%, while domestic holidays increased by 11.8%. This reflects the rising popularity of the ‘staycation’ seen in recent years, with many holidaymakers deciding to take a vacation within the UK in order to save money. Factors such as the weak sterling, the increased cost of flying, and restricted disposable income have also boosted the domestic holiday sector of the market.
This recession has had a significant effect on travel agents and tour operators, with numerous Air Travel Organisers Licence (ATOL)-protected businesses ceasing trading since the recession, while others have consolidated their operations. For example, Thomas Cook and The Co-operative Travel Group decided to merge their high street stores, while a number of worries have been voiced about Thomas Cook, following numerous profit warnings.
The all-inclusive holiday market can be split into two sectors — the domestic and the outbound. The outbound sector is by far the larger of the two, with destinations such as Spain, France and Greece particularly popular. The all-inclusive holidays’ market can be further subdivided into sectors, such as beach resorts, cruises and activity holidays. Although most sectors of the holiday market have experienced decline in the last decade, cruise holidays have defied the trend, with passenger numbers growing by 125.5% in the last 10 years. Cruise holidays now account for just over 10% of the UK’s all-inclusive holiday market.
Despite the recent declines observed in the holiday market, all-inclusive holidays have undergone a resurgence as a result of the financial crisis. Bookings have increased by 50% between 2008 and 2011, with many consumers attracted by the budgetary benefits, ATOL protection and the convenience of booking a holiday in one go. A third of package holidays are now estimated to be all-inclusive and this share is forecast to increase as 2012 continues to be an economically difficult year.
A number of changes involving the aviation industry are also due to be introduced in 2012. These are likely to push up the cost of flying and will put further pressure on travel agents and tour operators. In George Osborne’s Autumn Statement he confirmed that a planned hike in Air Passenger Duty (APD) will be implemented as of 1st April 2012. This equates to a double inflation rise in the rate of APD.
From 1st January 2012, aviation will become part of the EU’s Emissions Trading Scheme (ETS). This will see airlines pay for any emissions that go over 85% of their historical emission levels. Once again, this will drive the cost of air travel. However, some controversy regarding the introduction of aviation to the ETS has been expounded recently, as the Scheme will require airlines belonging to non-EU countries to account for their emission levels as well. A large number of countries have contested the Scheme, with 26 of the 36 International Civil Aviation Organisation (ICAO) members agreeing that the ETS ‘violates the cardinal principle of state sovereignty’.
Another major current issue affecting the all-inclusive holidays market concerns the Government’s proposed changes to the ATOL protection scheme. The changes aim to reflect the variety of methods in which holidays are now booked, as in 2010 only half of all leisure flights were ATOL protected. These changes have been welcomed by the industry, although the implementation deadline of 1st January 2012 is considered by many to be unrealistic.
Going into 2012, the domestic holiday market is likely to remain buoyant, following a strong 2011, while the outbound holiday market will remain stagnant due to the continued economic uncertainty. This uncertainty, however, is likely to continue to boost sales of domestic holidays, although the proportion of all-inclusive holidays involved is unlikely to register any significant growth.
Despite the continued troubles experienced in the outbound holiday market, all-inclusive outbound holidays are forecast to observe strong growth in 2012. The convenience of booking all-inclusive holidays, as well as the budgetary control and ATOL protection that they provide are all appealing facets to customers, particularly during turbulent economic conditions. However, high street operators are likely to continue to suffer, as major travel agents and tour operators migrate over to online distribution.
Foreword
Executive Summary
Introduction
OVERVIEW
DEFINITIONS
Travel and Tourism
All-Inclusive Holidays
SUPPLY SECTORS
Land Transport and Transport Via Pipelines (SIC)
Water Transport (SIC)
Air Transport (SIC)
Warehousing and Support Activities for Transportation (SIC)
Accommodation (SIC)
Travel Agency, Tour Operator and Other Reservation Service and Related Activities (SIC)
Research
Strategy Overview
MARKETS DYNAMIC AND SEGENTATION
The Total UK Tourism Market
Domestic Package Holidays
Package Holidays Abroad
All-Inclusive Holidays Market
DISTRIBUTION
The Role of Travel Agents and Tour Operators
Booking Methods
COMPETITVE STRUCTURE
ADVERTISING
Domestic Package Holidays
Package Holidays Abroad
MEDIA
THE CONSUMER
Holiday Opinions
All-Inclusive Activity Holiday Taking
MARKET FORECASTS
Beach and Resort Hotel Holidays
BACKGROUND
CONSUMER TRENDS
MARKETING ACTIVITY
ADVERTISING
DISTRIBUTION
Activity Holidays
BACKGROUND
CONSUMER TRENDS
MARKETING ACTIVITY
ADVERTISING
DISTRIBUTION
Cruise Holidays
BACKGROUND
CONSUMER TRENDS
MARKETING ACTIVITY
ADVERTISING
[(c)DISTRIBUTION
An International Perspective
MARKET DEVELOPMENTS
[(c)International Tourism Demand
[(c)The Importance of Domestic Spending
[(c)The Future
COMPETITOR ENVIRONMENT
CONSUMER BEHAVIOUR
[(c)Holidays Booked Online
[(c)The US
PEST Analysis
POLITICAL
Air Passenger Duty
Proposed Changes to Air Travel Organiser' Licensing Regulations
ECONOMIC
The UK Economy
[(c)The Contribution of Tourism to the UK
The Contribution of Tourism to the European and World Economy
SOCIAL
The Environment
Resurgence of Package Holidays
[(c)Holidaymakers Opinions of Review Websites
Air Passenger Duty Not a Key Factor for Holidaymakers
TECHNOLOGICAL
The Internet and Cloud Computing
Lost Online Travel Purchases
Popularity of Apps
EU Bans Pre-Ticked Boxes on Websites
Consumer Dynamics
OVERVIEW
OPINIONS REGARDING HOLIDAYS AND TOURISM
Booking a Holiday
Holiday Preferences
The Importance of Sustainable Tourism
Company Profiles
CLUB MED
Corporate Structure and Strategy
Product and Brand Development
Advertising
Distribution
Profitability
Future Company Developments
EASYJET
Corporate Structure and Strategy
Product and Brand Development
Advertising
Distribution
Profitability
Future Company Developments
SANDALS
Corporate Structure and Strategy
Product and Brand Development
Advertising
Distribution
Profitability
Future Company Developments
THOMAS COOK GROUP PLC
Corporate Structure and Strategy
Product and Brand Development
Advertising
Distribution
Profitability
Future Company Developments
TUI
Corporate Structure and Strategy
Product and Brand Development
Advertising
Distribution
Profitability
Future Company Developments
VIRGIN HOLIDAYS
Corporate Structure and Strategy
Product and Brand Development
Advertising
Distribution
Profitability
Future Company Developments
The Future
FUTURE ISSUES
Tourism by UK Residents in
The Economy
Political Issues
Technology
All-Inclusive Holidays
Forecasts
Further Sources
Associations
Publications
General Sources
Government Publications
Other Sources
Understanding TGI Data
Number, Profile, Penetration
Social Grade
Standard Region
- Club Med
- Easyjet
- Sandals
- Thomas Cook Group Plc
- TUI
- Virgin Holidays
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