Key Tourism Trends

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Key Tourism Trends

• David EdwardsTourism Trends Manager
• May 2008

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Trends in inbound and outbound tourism
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The UKs International Tourism Balance of Payments
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UKs global market share of international tourism
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Inbound visitor spend per visit
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Inbound markets contrasting trends 2000-2007 (1)
1.4 million more visits from Spain 1.1 million
more visits from Poland 900,000 more visits from
Ireland 700,000 more visits from Germany 700,000
more visits from Italy
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Inbound markets contrasting trends 2000-2007 (2)
346,000 fewer visitors from USA 225,000 fewer
visitors from Japan 66,000 fewer visitors from
Israel 52,000 fewer visitors from Greece 34,000
fewer visitors from Hong Kong
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Americans are they still travelling?
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Inbound market shares (1)
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Inbound market shares (2)
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Global picture share of international arrivals
in 2007
4 in 5 are intra-Europe trips
9 in 10 are intra-AP trips
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Inbound to Europe trends and forecasts
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Length of stay
43 inbound visits are 1-3 nights
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Where visitors go

• 1996 32 of overnight domestic trips were to a
  large city, 2007 39
• 1996 25 of overnight domestic trips were to a
  seaside, 2007 21
• London continues to dominate inbound tourism
  half of spend in 2007
• The South West continues to dominate overnight
  domestic tourism 18 of spend in 2007

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Nations and regions inbound shares
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Nations and regions - domestic overnight shares
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Getting to (and from) Britain

• Low-cost carriers increase access to regions from
  Europe, and vice-versa
• No new runways in South East not so in France,
  Holland and Germany
• Ferries losing market share to low-cost flights
  and the Channel Tunnel
• Getting a visa to visit the UK has got more
  expensive and more onerous
• 25 Schengen members by end 2008

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Over the past few years...

• UK population is more diverse (550,000 A12
  nationals live in the UK)
• More UK residents own a second home abroad
  (around 250,000)
• More Brits live permanently abroad (IPPR estimate
  is 5.6 million)
• More foreign students study at UK universities
  (49,000 entered in 2007)
• More UK based multi-nationals
• Competition for holiday visitors is more intense
  (Krakow, Dubai, Marrakech)

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Leading to a shift in the purpose mix of
inbound trips
19792007
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Visiting Friends and Relatives trips do they
really matter?

• 22 of inbound spend in 2007 (137 real growth
  since 1979 17 holiday growth)
• Regional spread 60 of VFR spend is outside
  London, 40 for holiday visits
• Seasonality 49 of VFR visits between October
  and March, 38 of holiday visits
• 1.8m visits to museums/galleries, 2.6m visits to
  a castle, church or historic house
• 8 million nights in paid accommodation
• Hosts spend too!

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Business Tourism

• A trading nation (business visits from 137
  markets in 2007)
• 29 of inbound spend (111 since 79)
• Trade Fairs/Exhibitions only 4 of business
  spend, attending Conference or Large Meeting
  18 of spend
• But spend 200 more per visit than other
  business visitors
• Vital for delivering profitable hotel occupancy
  and event revenue

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Socio-demographic drivers

• Older age groups more important in relative terms
  (12 inbound visits were by the over 55s in 1993,
  17 in 2007)
• British ex-pats account for one-in-eight inbound
  visits (626,000 from Spain alone)
• Domestic overnight tourism highly dependent on
  higher social grades (ABs account for 39 of
  spend but 20 of population, DEs 14 spend, 31
  population)
• The family unit is evolving

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Internet

• Enabled the low-cost carrier revolution
• More price transparency / competition
• Empowered tourists to share opinions with the
  world no hiding place for those offering poor
  quality
• Provides incomparable route to market for
  tourism businesses big or small
• Only 5 of Indians have access, but that is 60
  million people

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Accommodation

• England 1.1 milllion bedspaces in 31,000
  serviced accommodation establishments
• 1.3 million bedspaces in 26,000 non-serviced
  establishments
• On average 47 of available bedspaces are filled
  in serviced accommodation
• Owners in it for the lifestyle, not profit
• Planning rules and old stock hinder
  productivity
• The rise of the budget chain

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Travel Trade Trends

• Long-haul markets unfamiliar with UK still highly
  dependent on travel trade
• 90 book through trade in some markets, whereas
  14 in Nordic area
• Trade provides reassurance, delivers product
  fit and is culturally sensitive
• However, even in China increased on-line research
  and engagement with UGC
• Rise of the DIY package tour

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Heritage and culture remains a core UK strength

• Britain perceived as a world leader (Ranked 3rd
  in NBI behind France and Italy)
• Potential holiday visitors express desire to
  experience our heritage and culture
• Among the most popular activities undertaken by
  actual holiday visitors
• In an increasingly competitive market vital to
  build on USPs and not rely solely on tactical use
  of fashion

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UK end of year report the Could do better
aspects

• Visitors expectations of welcome are poor (UK
  ranked 16th by NBI, Canada top)
• Britain has a high cost base, so the experience
  must offer value for money
• Potential visitors have poor perception of
  weather and food but neither is a deterrent

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Increasingly fragmented market, but with some
common themes

• what you do more important than where you do
  it experiences not destinations count
• Authenticity travel-savvy visitors have higher
  expectations than earlier generations
• Fly in on Ryanair, stay in a Hilton, grab lunch
  in McDonalds no neat segments

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The future (1)

• Economic cycles will ensure good years and bad
  years
• but is the era of rising disposable income
  (especially for the retired) and falling travel
  costs at an end?
• New global hubs for business set to challenge
  London (Mumbai, Shanghai)
• Socio-demographic change will impact why we
  travel and who we travel with

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The future (2)

• Geo-politics matters (China wont have a
  significant balance of payments deficit)
• Fashions will come and go
• Technology will alter how we research, book,
  experience and recount travel
• Climate change will shape government, business
  and consumer behaviour there will be winners and
  losers
• Competition for the tourist , and potential
  tourists attention will intensify

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The future (3)

• The unexpected (9/11) will continue to take us
  by surprise, and the expected (EU expansion)
  will continue to have unexpected implications