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Activity holidays have grown only modestly over the four year period to 2014, despite potential for growth in a sector consumers are showing positive sentiments towards.
Last week’s annual Elman Wall Travel Director’s Summit heard from Nigel Dickinson, managing director of Key Note, a market research firm.
He contrasted the fortunes of the activity holiday sector, in which ski dominates in the outbound market, with all-inclusive, which saw a spectacular rise between 2010 and 2014 and looks set to grow further.
Dickinson said activity holidays grew only 1% between 2010 and 2014, from 13.6 million to 13.7 million, with domestic accounting for 9 million of the total. Overseas activity holidays remained static at around 4.6 million, although the value of the sector did increase indicating people spent more on the same number of trips.
However Dickinson pointed to research that showed a significant increase in the popularity of multi-activity holidays with 28% of people saying this year they had one of these trips in the UK and 15% abroad, up from 9% and 6% respectively in 2008.
Customer sentiment research revealed 26% of people who had not taken an activity holiday in the UK would consist it, 22% who had not taken an activity holiday abroad would consider it and 19% who had never taken an activity holiday would consider it.
Dickinson said there was “massive potential”, particularly for firms providing the opportunity for clients to do multiple activities in the one trip.
“We might be seeing cost-conscious bookers looking to use their time more efficiently. Many accommodation providers and resorts have expanded the range of services and facilities they offer or formed partnerships with local businesses that can better provide such services.”
The all-inclusive sector saw a 50% rise in UK outbound trips between 2009 and 2013 from 3.6 million to 5.4 million and the value of these trips grew from £2.65 billion to nearly £4 billion.
Dickinson said: “We forecast that the volume of outbound all-inclusive will grow by 27% between 2014 and 2017 and the market for outbound will grow in value by 33%.”
Overall the UK outbound travel market has still to recover to the pre-recession peak seen in 2007 in both volume and value, Dickinson told delegates.
Overseas trips by UK residents grew from 55.6 million in 2010 to 66.1 million last year. In 2007 that figure stood at 69.5 million. Last year the value of overseas trips was £35 billion compared to the £36.8 billion seen in 2007.
Dickinson said a pessimistic view is that that recovery is dependent on the ongoing economic recovery which he said “faces challenges”.
Government data for types of travel show holidays grew 5.8% from 2010 to 2014 to 37.8 million and spend increased 10%, trips to visit friends and family grew from 10.9 million to 13.3 million and business trips were up more modestly from 6.6 million to 6.8 million.
Dickinson said the outbound market saw air travel grow at the expense of rail and sea transport, which he said was due to enhanced competition among airlines and reflected the start of a period of falling oil prices.
Despite this Brits are continuing to favour “tried and tested” destinations, said Dickinson, with visits to EU countries up 24% and taking a higher percentage share between 2010 and 2014, the US seeing a modest increase but the rest of the world showing a decline.
“Which begs the question: are we becoming more risk averse or is this impacted by cost?” said Dickinson.
Key Note research has shown 26.5% of UK holidaymakers intended to spend more on their holidays this year than last with men slightly more inclined to spend more and younger age groups more likely to spend more than older people. In addition 32% of respondents said they intended to visit a new country this year.