Travel Agents and Overseas Tour Operators

  • November 2008
  • -
  • Key Note Publications Ltd



In 2007, UK outbound tourism expenditure (excluding expenditure on travel fares to and from the UK) totalled £35.48bn — a 3.1% increase compared with 2006. Expenditure on domestic tourism (excluding day trips) stood at £21.24bn — 1.3% higher than in 2006. Combined, the total UK resident tourism market was valued at £56.71bn in 2007 — a rise of 2.4% compared with the previous year. In 2007, the turnover of travel agents and tour operators totalled £22.6bn. This was a 20% rise on 2006, and was equivalent to 39.8% of total tourism expenditure by UK residents.



Despite the current economic difficulties in the UK (as at November 2008), the UK's leading tour operators are fairly confident that demand for packaged holidays will remain strong. For example, both Thomas Cook PLC and TUI Travel PLC have indicated that demand for their 2008 summer programmes has remained on course, and that there is no evidence to suggest that consumers are trading down, curtailing their holiday plans or reducing average holiday durations. Packaged, or all-inclusive, holidays have retained their popularity, possibly because consumers prefer to pay a fixed cost in these uncertain economic conditions.



To improve their financial performances, many of the leading tour operators have been increasing prices and reducing capacity. Thomas Cook, for example, has reported that its average selling prices in the period from May to early August 2008 were 14% ahead of the corresponding period in 2007, and that its margins were significantly higher. TUI Travel PLC has announced that it aims to reduce capacity by 15% for its UK summer 2009 season, and to reduce capacity in its winter 2008/2009 season by 21%.



The UK domestic travel and tourism market faces a number of threats in 2008, including poor summer weather and the depressed state of the UK economy. However, the fall in the value of sterling against the dollar and the euro could aid the domestic market as it increases the costs of holidaying outside the UK and improves the financial competitiveness of taking breaks in the UK. It is also possible that during the economic slowdown, consumers may decide to holiday within the UK, rather than travel abroad, in order to reduce their holiday costs.



Indicators of trends for the first half of 2008 in the outbound and domestic tourism market are fairly encouraging for travel agents and overseas tour operators, with increases being shown for both volume and value tourism, compared with the corresponding periods in 2007. The combined turnover of the UK travel agents and tour operators in the first half of 2008 is also higher than in the corresponding period in 2007, and the leading travel agents and tour operators remain fairly optimistic about demand for the year as a whole. Despite these fairly bullish assessments, however, UK residents' demand for domestic and outbound travel and tourism remains vulnerable to any substantial worsening in the UK economic climate, and this could in turn affect people's choices regarding holiday destinations and whether to travel at all in the early years of the forecast period from 2008 to 2012.

 
 


Table Of Contents





Executive Summary



1. Market Definition

REPORT COVERAGE

Definitions

MARKET SECTORS

Outbound Tourism

Domestic Tourism

MARKET TRENDS

Package Tours Weather Economic Difficulties

Tour Operators Increase Their Prices and Reduce Capacity

Domestic Market May Benefit From Economic Worries

Airline Failures Rising

XL Leisure Group Goes Into Administration

ECONOMIC TRENDS

Population



Table 1: UK Resident Population Estimates by Sex (000), Mid-Years 2003-2007


Gross Domestic Product



Table 2: UK Gross Domestic Product at Current and Annual Chain-Linked Prices (£m), 2003-2007


Inflation



Table 3: UK Rate of Inflation (%), 2003-2007


Unemployment



Table 4: Actual Number of Unemployed Persons in the UK (million), 2003-2007


Household Disposable Income



Table 5: UK Household Disposable Income Per Capita (£), 2003-2007


MARKET POSITION



Table 6: The Total UK Travel and Tourism Market by Value (£m), 2003-2007


Overseas



Table 7: Forecast Expenditure on Personal Travel and Tourism by Country ($bn), 2008




2. Market Size

THE TOTAL MARKET

By Value



Table 8: The UK Resident Tourism Market by Sector by Value (£m and %), 2003-2007

Figure 1: The UK Resident Tourism Market by Sector by Value (£m), 2003-2007


By Volume



Table 9: The UK Resident Tourism Market by Sector by Volume (000 trips, million nights and average length of stay), 2003-2007


BY MARKET SECTOR

Outbound Tourism



Table 10: The UK Outbound Travel and Tourism Market by Value and Volume (£m, 000 and million), 2003-2007


By Purpose of Visit



Table 11: The UK Outbound Tourism Market by Purpose of Visit by Value (£m and %), 2003-2007

Table 12: The UK Outbound Travel and Tourism Market by Purpose of Trip by Volume (000 and %), 2003-2007


By Mode of Travel



Table 13: The UK Outbound Tourism Market by Mode of Travel and Purpose of Visit by Volume (000 and %), 2003-2007


By Destination



Table 14: The UK Outbound Travel and Tourism Market by Destination (000 trips and %), 2003-2007


Inclusive Tours



Table 15: UK Residents' Inclusive Tour Holidays by Region (000 and %), 2003-2007


Domestic Tourism



Table 16: The UK Domestic Travel and Tourism Market by Value and Volume (£m, 000 and million), 2003-2007


By Purpose of Visit



Table 17: The UK Domestic Tourism Market by Purpose of Visit by Value (£m and %), 2003-2007

Table 18: The UK Domestic Tourism Market by Purpose of Visit by Volume (million trips and %), 2003-2007


By Destination



Table 19: Distribution of Domestic Tourism in the UK by Government Office Region Visited (£m, million and %), 2007




3. Industry Background

RECENT HISTORY

NUMBER OF COMPANIES



Table 20: Number of UK VAT-Based Enterprises Engaged as Travel Agents and Tour Operators by Turnover Sizeband (£000), 2003-2007


ATOL Licence Holders



Table 21: Air Travel Organisers' Licences (million), Years Ending December 2003-2007


EMPLOYMENT



Table 22: Number of People Employed in the Travel Agents and Tour Operators Market in Great Britain by Sex and Status of Employment (000), Years Ending March 2007 and 2008

Table 23: Number of UK VAT-Based Enterprises Engaged as Travel Agents and Tour Operators by Employment Sizeband, 2003-2007


REGIONAL VARIATIONS IN THE MARKETPLACE



Table 24: Number of UK VAT-Based Enterprises Engaged as Travel Agencies and Tour Operators by Government Office Region (number and %), 2007


Outbound Tourism



Table 25: UK Ports/Airports of Departure for UK Residents Travelling Abroad (million visits and %), 2006


Domestic Tourism



Table 26: UK Domestic Tourism by Region of Residence and Destination Region (million trips and %), 2007


DISTRIBUTION



Table 27: Leading UK Travel Agents by Estimated Number of Branches (number and %), Years Ending March 2004-2008


HOW RoBUST IS THE MARKET?



Table 28: Number of UK VAT-Based Enterprises Engaged as Travel Agencies and Tour Operators by Age of Business (number and %), 2007


LEGISLATION

Package Travel Directive

EU Moves to Outlaw Misleading Prices

Rights For Passengers With Reduced Mobility

ATOL Protection Contribution

KEY TRADE ASSOCIATIONS

ABTA — The Travel Association

Advantage

Air Transport Users Council

Association of Independent Tour Operators

Civil Aviation Authority

Confederation of Passenger Transport UK

European Travel Agents' and Tour Operators' Associations

Federation of Tour Operators

Guild of European Business Travel Agents

Guild of Travel Management Companies

Passenger Shipping Association

Travel Trust Association

World Tourism Organization

World Travel andamp; Tourism Council



4. Competitor Analysis

THE MARKETPLACE

Vertically-Integrated Travel Companies

Tour Operators

Retail Travel Agencies

Online Travel/Booking Agents

MARKET LEADERS

Thomas Cook Group PLC

Company Structure

Current and Future Developments

Financial Results

TUI Travel PLC

Company Structure

Current and Future Developments

Financial Results

OTHER TRAVEL COMPANIES

Trailfinders Group Ltd

Lastminute.com Ltd

Virgin Holidays Ltd

Holidaybreak PLC

Kuoni Travel Ltd

Saga Holidays Ltd

OUTSIDE SUPPLIERS

Transport Operators

Airlines



Table 29: Number of Passengers Uplifted by UK Airlines on International Charter Services (000), 2003-2007


Other Transport Operators

Accommodation Providers

MARKETING ACTIVITY


Main Media Advertising Expenditure



Table 30: Main Media Advertising by UK Travel Agents and Overseas Tour Operators (£000 and %), Years Ending June 2004-2008


Overseas Tour Operators



Table 31: Main Media Advertising Expenditure by Overseas Tour Operators (£000 and %), Year Ending June 2008


Online Travel/Booking Agents



Table 32: Main Media Advertising Expenditure by Online Travel/Booking Agents (£000 and %), Year Ending June 2008


UK Retail Travel Agents



Table 33: Main Media Advertising Expenditure by UK Retail Travel Agents (£000 and %), Year Ending June 2008


Exhibitions/Trade Shows



5. Strengths, Weaknesses, Opportunities and Threats

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS



6. Buying Behaviour

consumer penetration

Holidaymakers



Table 34: Penetration of Holidays Taken in the Past 12 Months (% of adults), Years Ending March 2004-2008

Table 35: Penetration of Holidays Taken in the British Isles and Abroad in the Past 12 Months (% of adults), Years Ending March 2006 and 2007


Holidays Taken in the British Isles

By Penetration



Table 36: Penetration of Holidays Taken in the British Isles in the Past 12 Months by Sex, Age, Social Grade, Marital Status, Working Status, Region, Household Size, Presence of Children in Household and Tenure (% of adults), Year Ending March 2007


By Profile



Table 37: Profile of Adults Who Had Taken One or More Holidays in the British Isles in the Past 12 Months by Sex, Age, Social Grade, Marital Status, Working Status, Region, Household Size, Presence of Children in Household and Tenure (% of adults), Year Ending March 2007


Holidays Taken Abroad

By Penetration



Table 38: Penetration of Holidays Taken Abroad in the Past 12 Months by Sex, Age, Social Grade, Marital Status, Working Status, Region, Household Size, Presence of Children in Household and Tenure (% of adults), Year Ending March 2007


By Profile



Table 39: Profile of Adults Who Had Taken One or More Holidays Abroad in the Past 12 Months by Sex, Age, Social Grade, Marital Status, Working Status, Region, Presence of Children in Household and Tenure (% of adults), Year Ending March 2007


Type of Holiday



Table 40: Last Holiday Taken in the Past 12 Months by Type of Holiday (% of adults), Years Ending March 2006 and 2007


Length of Stay



Table 41: Last Holiday Taken in the Past 12 Months by Length of Stay (% of adults), Years Ending March 2006 and 2007


Cost of Holiday



Table 42: Last Holiday Taken in the Past 12 Months by Total Cost of Holiday (% of adults), Years Ending March 2006 and 2007




7. Current Issues

POLITICS

BAA May Have to Sell Some of its Airports

ATOL

CAA Restricts Use of the ATOL Logo

AUC Proposes Emergency Fund to Protect Consumers

TRAVEL INSURANCE

Government Regulation of Connected Travel Insurance

Travel Insurance Prices Could Rise

INDUSTRY DEVELOPMENTS

Change in Focus for Thomson and First Choice Travel Shops

Packages Pick Up on High Street

LEGISLATION

EU-US Open Skies

The Corporate Manslaughter Act

CORPORATE ACTIVITY

Ryanair

Thomas Cook PLC

TUI Travel PLC

TECHNOLOGICAL

Thomas Cook Launches `Ask Thomas'

Innovations in Website Design

ENVIRONMENT

Tourism 2023



8. The Global Market

MARKET SIZE

By Value



Table 43: International Tourism Receipts ($bn and _bn), 2003-2007


By Region



Table 44: International Tourism Receipts by Destination Region ($bn and %), 2006 and 2007


By Volume



Table 45: International Tourist Arrivals (million), 2003-2007


By Region



Table 46: International Tourist Arrivals by Region (million and %), 2006 and 2007

Table 47: International Tourist Arrivals by Region and Sub-Region (million and %), 2003-2007


FUTURE TRENDS

International Tourist Arrivals in 2008

Longer-Term Trends



Table 48: Forecast Expenditure on Travel and Tourism by Purpose of Travel ($bn and %), 2008 and 2018

Table 49: Forecast Expenditure on Personal Travel and Tourism by Country ($bn), 2008 and 2018




9. Forecasts

ECONOMIC BACKGROUND

Gross Domestic Product



Table 50: Forecast UK Growth in Gross Domestic Product in Real Terms (%), 2008-2012


Population



Table 51: Forecast UK Resident Population by Sex (000), Mid-Years 2008-2012


Inflation



Table 52: Forecast UK Rate of Inflation (%), 2008-2012


Unemployment



Table 53: Forecast Actual Number of Unemployed Persons in the UK (million), 2008-2012


Key Trends in the First Half of 2008

FORECASTS 2008 TO 2012

The Total Market



Table 54: The Forecast UK Resident Tourism Market by Sector by Value (£m and %), 2008-2012

Figure 2: The Forecast UK Resident Tourism Market by Sector by Value (£m), 2003-2012


Outbound Tourism



Table 55: The Forecast UK Outbound Travel and Tourism Market by Value and Volume (£m, 000 and million), 2008-2012


Domestic Tourism



Table 56: The Forecast UK Domestic Travel and Tourism Market by Value and Volume (£m, 000 and million), 2008-2012


FUTURE TRENDS

Airlines Are Under Pressure

TUI Aims to Reduce Capacity in the UK

E-Commerce Bookings Continue to Rise



10. Company Profiles

Holidaybreak Plc

Kuoni travel Ltd

lastminute.com Ltd

saga holidays Ltd

thomas cook group plc

trailfinders group ltd

tui uk ltd

Virgin Holidays Ltd

xl leisure group plc



11. Further Sources

Associations

Publications

General Sources

Government Publications

Bisnode Sources

andnbsp;


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