Travel Weekly Insight Annual Report 2019-2020

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Travel Weekly Insight Annual Report 2019-2020 Produced in association with Front Cover VERSION REPRO OP REPRO SUBS Annual Report 2019-20 ART PRODUCTION CLIENT Forty-seven million reasons to be confident in 2020 Produced by Travel Weekly, with exclusive consumer research BLACK YELLOW MAGENTA CYAN 91TRS1951903.pgs 02.12.2019 08:46 Deloitte VERSION REPRO OP REPRO SUBS ART PRODUCTION CLIENT Be ahead of the changing consumer www.deloitte.co.uk/ths JJ1904619046 TTravelravel WWeeklyeekly AAmendsmends 2270mmx203mm70mmx203mm iir.inddr indd 1 002/12/20192/12/2019 009:419:41 BLACK YELLOW MAGENTA CYAN 91TRS1951900.pgs 02.12.2019 11:36 Contents VERSION Contents TRAVEL WEEKLY INSIGHT REPORT 2019-20 REPRO OP REPRO 4 Executive summary 18 Inbound 32 Hospitality SUBS 5 Key findings 20 Domestic 35 Travel technology 7 Consumer research 22 Cruise 40 Cybersecurity 9 Market outlook 24 Business travel 42 Future of work ART 15 Consumer research 26 Investment in travel 45 Sustainable travel 16 Outbound 29 Aviation 49 Resilience PRODUCTION TRAVEL WEEKLY INSIGHT ANNUAL REPORT 2019-20 Editor Ian Taylor Designer and illustrator CLIENT Kate Collings Chief subeditor Mike Walsh Production manager Nick Cripps Travel Weekly Group editor-in-chief Lucy Huxley Head of sales Mary Rega Managing director Stuart Parish Jacobs Media Group chairman Clive Jacobs Front cover: Outbound holidays hit a record 47 million in 2018; numbers in 2019 were on a par and exclusive consumer research by Kantar/Service Science for this report suggests demand for overseas holidays in 2020 will at least match 2019 (page 15) Travel Weekly Insight Annual Report 2019-20 is published by Travel Weekly Group Limited. Registration number 6927031. Registered address: Third Floor, 52 Grosvenor Gardens, London SW1W 0AU. Materials in this publication may not be reproduced in any form without permission. Registered at the Post Office as a newspaper. Printed in England for the proprietors by 26/12. Origination by Rhapsody. © Travel Weekly Group Limited 2019 Cover and page 3 images: Shutterstock Travel Weekly Insight Report 2019-20 3 BLACK YELLOW MAGENTA CYAN 91TRS1951127.pgs 02.12.2019 14:37 VERSION Executive summary Executive Summary opportunities for growth REPRO OP REPRO 2019 has been an eventful and some might say transformational year for the UK travel sector. While consumer confidence wavered in a climate of continued political and economic SUBS uncertainty, spending remained resilient. Most important, consumers still favour experiences and our research on leisure spending has shown net spending on holidays remains robust and above ART other leisure categories. However, should the consumer fundamentals change there is concern consumers’ ability to pursue their holiday dreams as often or as elaborately may be constrained. There have been fewer travel company PRODUCTION acquisitions over the last year. While Travel companies and there is more the sector could do in this could be linked to the general using analytics to predict what consumers uncertainties, it is also potentially an need to focus want next. The sector can also make better indication that longer-term prospects for on consumers use of technologies to operate efficiently growth in the sector are being questioned. and empower staff – for example, by The sector is becoming increasingly and employees, automating more menial tasks and CLIENT competitive and a range of operational and work out enabling staff to be more insight-led. challenges have put pressure on This can be achieved by extracting more individual operators as well as the sector how to lead with value from the data collectively held on as a whole. Cyberattacks, drones and fleet purpose, says consumers, by collaborating and sharing issues have caused service disruptions, across companies. and workforce-related challenges – rising Alistair Pritchard There are indeed signs that consumer labour costs and limited labour supply – of Deloitte preferences are evolving. Holidays have combined with overcapacity to put are increasingly an opportunity for margins under pressure. consumers to enrich their lives and they want authentic experiences. They also SETTING A VISION FOR 2025 want to understand the impact their As 2020 dawns and focus shifts to refining holidays have on the environment, the business plans for the next five years, what local communities and places they visit. should travel businesses do to continue Having a strong brand, interesting to grow? The answer is simple: focus on offerings and competitive prices might people – both consumers and employees. not be enough to succeed in the next While the outlook for economic phase of growth. In future, a successful growth might be muted, there are still company needs to be responsible and opportunities for growth. Holidays purpose-led to inspire and resonate with remain special to consumers and a travel consumers and employees. This is not business can set itself up for success by about quick wins. Companies need to understanding what, when and how invest time and effort in working out how consumers want their holidays. This is they truly lead with purpose. The pressure only possible if staff are motivated and to do so is only likely to increase. feel their contribution is valued. Technology is a key enabler for Alistair Pritchard, lead partner, improving understanding of the consumer Travel and Aviation, Deloitte LLP 4 Travel Weekly Insight Report 2019-20 BLACK YELLOW MAGENTA CYAN 91TRS1951128.pgs 02.12.2019 14:46 Key Findings VERSION Key Findings REPRO OP REPRO More than 1 i n 2 plan overseas 7 in 10 took a holiday in 2020 domestic SUBS 6pt holiday in rise in 2019 concern at environmental 6pt rise ART impact of flying in adults ‘very likely’ to take No change domestic in planned duration 6pt increase holiday PRODUCTION in holidaymakers who anticipate of overseas holidays: in 2020 53% plan Brexit impact 7 nights or less on holiday decision CLIENT 2 in 3 under-35s 2 in 3 4pt rise anticipate over-55s in booking ‘Brexit impact say Brexit by smartphone on holiday’ to have ‘no impact’ 5pt fall in expectation of 9 out of 10 booking with agent to spend same or more 1 in 2 holidaymakers 5pt rise in on holiday to book all-inclusive: adults planning in 2020 +4pts on 2019 hotel stay overseas Only 1 in 25 holidaymakers plan homestay booking – no change since 2015 Travel Weekly Insight Report 2019-20 5 BLACK YELLOW MAGENTA CYAN 91TRS1951129.pgs 02.12.2019 14:52 Forward VERSION Foreword focus on sustainability is the one certainty REPRO OP REPRO Desire for certainty on Britain’s continued to rise . at 1.5% per year future relationship with the EU may in the last decade. There is no sign of be satisfied one way or another by Despite a clouded emissions peaking.” the general election as this report A 55% reduction in emissions by went to press. But we will await economic 2030 is required “to put the world on SUBS clarity on how the process plays out outlook and the the pathway to limiting warming to whatever the outcome. 1.5C”. By contrast, business newspaper This is the fourth Insight Annual preoccupations the Financial Times reported: “Existing Report since the 2016 Brexit referendum of the past 12 global pledges to reduce emissions will and the main concerns of the travel correspond to more than 3C of warming industry have not changed. The months, demand by the end of the century.” ART sector requires maintenance of flying for travel remains Growing anxiety about the climate arrangements, friction-free borders, was reflected in a rise in awareness thriving economies, stable exchange undiminished of the impact of flying and the ‘flight rates, skilled personnel and so on. shame’ (flygskam) movement in Sweden. What comes next may not entirely Whether this will spread remains to measure up. Yet despite a clouded be seen, but unchecked growth can’t PRODUCTION economic outlook and the preoccupations be assumed – perhaps leading to new of the past 12 months, demand for travel pressure for carbon taxes or fresh doubt remains undiminished. over a third runway at Heathrow. Trends previously identified have I am grateful to all at Deloitte for their strengthened over the past year. help in producing this report, indebted All-inclusive bookings have become such to Tom Costley of Service Science for CLIENT a mainstay of the outbound market that arranging the Kantar research and one-in-two holidaymakers intend to book grateful to David Hope of GfK for his all-inclusive in 2020. insight on outbound booking trends. Any Smartphone bookings are rising, faults are my own. posing a challenge to high street agents. Ian Taylor Yet the liquidation of Thomas Cook executive editor, proved less of a death knell for the Travel Weekly high street than an opportunity for ian.taylor@ renewal as the UK’s largest independent travelweekly.co.uk agency chain swallowed Cook’s retail outlets whole. Consumer research findings run through this report, along with supporting data, and senior figures at Deloitte provide commentary on the economic outlook, investment, latest THE CHARTS (page 7) represent UK holiday taking in 2019. Figures trends in technology (especially aviation), 1, 2 and 4 are self-explanatory. cyber security, the workplace and, Note the increase in overseas holidays among 16 to 34-year-olds crucially, sustainability. and decline among older adults. Like it or not, this issue will most Figure 3 shows a breakdown of those taking overseas holidays by define the future. age and the proportion by region; Rapid progress is now required to 24% of overseas holidaymakers taking two or more breaks in 2019 reduce fossil fuel emissions. The UN travelled with children, 39% were Environment Programme (UNEP) annual over 55 and 71% in social class ABC1. These are not the same as Emissions Gap Report, published in the proportions within these groups taking two or more holidays – 20% November, provided sobering reading.
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