It also covers the effects of Brexit: As usual, last week’s World Travel Market in London was the time and venue for the release of numerous travel and tourism industry reports, studies and white papers on trends and projections. And, as expected, there were accompanied by the predictable release of material aimed at promoting the interests and/or attractions of a particular destination or supplier.
Midst this environment, it was not difficult to take notice of the truly substantive work that was released, discussed or presented. And among the best of these was the Skift Research report, “UK Traveler Profile and Key Statistics,” that contains a section on the effects of Brexit. (Skift Research is the official research arm of Skift, which is known primarily for its travel-related news publication.)
The 35-page report zeroes in on the current condition of the UK market, with information on: the number of UK residents who travel and how much the average household spends on travel; historical time series data on travel volume and value from 2006–2018; insight into trips and spending broken down by age, trip purpose, and destinations; key facts about the Brexit process, and how it is forecast to impact the travel industry; and a 2019–2024 forecast data based on three Brexit scenarios: the UK remains in a single market, the UK leaves the EU with a deal, or the UK leaves the EU without a deal.
What INBOUND has done is to digest some of the key points of the full Skift Report, which you can access here. One small note: in reviewing the tables and references that cite the British pound sterling (₤) vs. the U.S. dollar as INBOUND prepared for distribution was $1.26.
Profiling the UK Traveler—The desire among UK residents to travel outside their country’s borders: According to data from 2016—the latest date for which reliable numbers are available—more than 60 percent of UK residents that travel made at least one international trip, which is much higher than other major European economies like France, Spain, and Italy where domestic trips take precedent. Only Germans exceed UK residents in this perspective.
UK Residents Take High Proportion of International Trips:
Travel Spending:
It also covers the effects of Brexit: As usual, last week’s World Travel Market in London was the time and venue for the release of numerous travel and tourism industry reports, studies and white papers on trends and projections. And, as expected, there were accompanied by the predictable release of material aimed at promoting the interests and/or attractions of a particular destination or supplier.
Over £400 per household is also spent on domestic trips, although this amount will also be higher in reality. Not only does this include households that do not travel at all, holiday spending is not captured for domestic trips by the Office for National Statistics (ONS), nor are modes of transportation other than air travel (with car and rail more likely modes for domestic trips).
Source: Skift Research from the ONS (Office for National Statistics) Components of Household Expenditure.
Average household figure is calculated using total households in UK, including those that do not travel.
Package holidays take up a large proportion of spending: This factor highlights that, despite the September 23, 2019 collapse of Thomas Cook—the UK’s oldest package holiday provider—there is a future for package holidays in the UK. According to an ABTA survey, half of UK holiday travelers took a package holiday in 2018, a figure that has remained the same since 2004. Data from the UK’s Office for National Statistics (ONS) shows that 38.6 percent of outbound holiday trips taken in 2018 were packaged, representing 44.8 percent of outbound holiday spending. There has not been a significant downward trend in package holidays, and 2018 actually saw a significant uptick in packaged holiday spending according to the data
The nature of packages has completely changed though. The ABTA survey notes that preferences have shifted towards “packages that include tailor-made trips, tours that take people off the beaten track, adventure holidays, river and ocean cruises, well-being breaks, and all-inclusive.”
Outbound and Domestic Breakdown: A note on Sources: For a closer look at domestic and outbound travel behavior we can turn to two surveys: the UK’s Office for National Statistics ()NS) collects data on outbound departures through the International Passenger Survey, and the tourism boards of England, Wales, and Scotland collectively gather domestic tourism data through the Great Britain Tourism Survey.
According to the two surveys, UK residents undertook 134.2 million domestic trips with at least one overnight stay, and 71.5 million overnight outbound trips in 2018. As can be expected, in spending terms, outbound trips accounted for higher spending than domestic trips, with £45 billion spent on outbound trips and £27 billion on domestic trips.
Source: Skift Research from ONS TravelPac and Great Britain Tourism Survey
Which Age Demo Travels Most? In terms of spending, the 45–54 age group trumps any other group in both international and domestic trips, but when comparing with population data there is very little difference in spending behavior between the 35-44, 45-54 and 55-64 age groups. Despite the growing focus on younger generations, these older age groups continue to be the bread basket for many travel operators around the world, and no less so in the UK.
Notes on Trip Purpose
—The data show the importance of holidays (55 percent in trips, 67 percent in spending in 2018) as the main purpose of travel for UK residents.
—Visiting friends and relatives (VFR) accounts for 30% of trips, but this trip type accounts for only 17 percent of spending.
—There was a clear downturn in outbound holiday trips as the economic crisis of 2008/09 hit. In terms of spending, domestic spending was slightly up, but could not compensate for the strong decline in international spending in 2009.
—Business trips fared worse, also seeing a decline in outbound trips, and almost no stronger uptake in domestic business trips to compensate. Both in volume and value there was a strong decline.
—Holiday stays are on average longer than business trips, although average nightly spend is significantly higher for business trips.
—Visiting friends and relatives (VFR) trips are generally longer, but as the spending on accommodation tends to be less, the average spend per night is significantly lower.
Preferred Destinations
Spain is the largest beneficiary of UK travelers, taking 20 percent of the money spent outside UK borders by travelers. The U.S., while only accounting for 5 percent of trips, received 10 percent of UK spending in 2018.
The Brexit Effect: The Skift study explores at considerable length the history of “Brexit” (British voters narrowly approved a referendum exiting from the European Union on June 23, 2016), which was supposed to have had the UK completing its departure earlier this year. But a series of attempts at getting the British Parliament to approve an arrangement for doing so, combined with delays in a “must act” deadline has had an impact on travel in the UK. Skift looks at developments (and non-developments), along with important impacts
In sum, says Skift, Brexit negatively impacts travel, the question is by how much? Since the 2016 vote in favor of the UK leaving the EU, travel’s performance has started to decline. 2018 saw declines in inbound, domestic, and outbound trips, and a strong decline in inbound spending. This downturn is expected to continue as the actual split with the EU becomes more imminent. Skift Research forecasts show an impact between -7 percent and +3 percent in inbound arrivals between 2019 and 2024, depending on the scenario that will play out. Outbound trips will see similar results.
For Skift’s complete nine-page take on the Brexit impact—in addition to the full Skift study—click here.
Key Takeaways
—The UK is a “net-exporter” of travel: While different sources provide slightly different data, it is clear that UK residents spend considerably more on outbound travel than the country receives from inbound travel spending. Data from official UK sources shows that the UK received 37.9 million travelers and £23 billion ($28.3 billion) in spending in 2018, while UK residents made 71.5 million trips and spent £45 billion ($55.4 billion) on international travel. Domestic travel is also a sizable market, responsible for 118.6 million trips and £24 billion ($29.5 billion) in spending.
—Package Holidays remain popular: The average UK household spent just short of £2500 ($3075) on international travel in 2018. Over half of this spending is on packaged holidays, highlighting that despite the UK’s biggest packaged holiday provider Thomas Cook going into administration, the sector still offers great potential.
—Gen X and Baby Boomers continue to be major travel spenders: While travel marketers love to focus on Millennials and Gen Z’ers, the older Baby Boomer and Gen X travelers are still the highest spenders. As time progresses, we will start to see this shift.
Holidays are the main purpose to travel: The vast majority of travel originating in the UK is for the purpose of holidays, or leisure trips. Holidays accounted for 55 percent of international and domestic trips, and for a total of 67% of travel spending in 2018.
—Business travel remains male dominated: Despite a decades-long push for greater equality in the workforce, there is surprisingly little movement towards this in the business travel segment, where 76 percent of UK international business trips are still undertaken by men. This has only slightly come down from 80 percent 15 years earlier in 2004.
—The link with the EU is strong — at least in terms of destination choice: The importance of Europe as a destination is clear, receiving 81 percent of trips taken and 67 percent of all UK spending. Spain is the largest destination in terms of both volume and value, accounting for 22 percent and 20 percent respectively.
—Brexit negatively impacts travel, the question is by how much? Since the 2016 vote in favor of the UK leaving the EU, travel’s performance has started to decline. 2018 saw declines in inbound, domestic, and outbound trips, and a strong decline in inbound spending. This downturn is expected to continue as the actual split with the EU becomes more imminent. Skift Research forecasts show an impact between -7 percent and +3 percent in inbound arrivals between 2019 and 2024, depending on the scenario that will play out. Outbound trips will see similar results, while domestic trips are likely to fare better, between -1 percent and +6 percent.
To access the full report, “UK Traveler Profile and Key Statistics,” click here.
