The Changes in Consumer Behavior in UK Holiday Market for the Financial year 2013/2014 (Dissertation Sample)

UK Holiday Market Research Report 2013/2014
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Contents TOC \o "1-3" \h \z \u 1.Executive summary PAGEREF _Toc435171649 \h 32.Introduction PAGEREF _Toc435171650 \h 42.1.Aim of the Study PAGEREF _Toc435171651 \h 42.2.Objectives of the study PAGEREF _Toc435171652 \h 43.Findings PAGEREF _Toc435171653 \h 53.1.Tourists tend to explore further PAGEREF _Toc435171654 \h 53.2.An overview of Air Travel PAGEREF _Toc435171655 \h 53.3.Choice of destination PAGEREF _Toc435171656 \h 63.6 Choice of holiday package PAGEREF _Toc435171657 \h 73.4.Online Early Booking being embraced PAGEREF _Toc435171658 \h 73.5.Accommodation Choices PAGEREF _Toc435171659 \h 84.Analysis PAGEREF _Toc435171660 \h 84.1.Domestic Outlook PAGEREF _Toc435171661 \h 84.2.Changes in Consumer Behavior and the Impact on the Market PAGEREF _Toc435171662 \h 95.The Future of UK Holiday Market PAGEREF _Toc435171663 \h 116.Conclusions and Recommendations PAGEREF _Toc435171664 \h 127.Referencing PAGEREF _Toc435171665 \h 14
1 Executive summary
Financial year 2013/1014 saw a mixed picture from a consumer confidence and sales perspective. The year started with a buoyant regular peak-booking season from January to March with high consumer confidence and strong early season sales. During the year, that confidence softened with a warm, dry summer likely to have had an impact on the market.
However, there has been a small decline in the percentage of people taking holidays in the year. This was offset by a slight increase in people taking a greater number of breaks abroad. The most popular overseas destinations in 2014 for British travelers were Spain, France, Italy, The USA, Portugal, Greece, Turkey, The Netherlands, Belgium and Ireland in decreasing order. A real success for 2014 was Italy that rose to take the third spot, overtaking the USA.
The desire for authentic experiences and the perception of lower prices are driving the growth of this sector and marketing agency. Increased populations have tried peer-to-peer services. However, staycations were the most common, with respondents saying their major holiday was in the UK. A study of 2,000 respondents found more than half who took a holiday in the UK or abroad and booked less than two months in advance.
This report examines the central issues and developments affecting the travel money market. It provides analysis of UK domestic overseas holiday trends and the key market drivers. In addition, there is an analysis of increased spending and a forecast showing the expected growth over the next five years. The CAA/Mintel independent holiday market research provides insight into attitudes towards foreign currency exchange rates, hotel and flight accountability. The report, therefore, examines the holiday habits and attitudes of British adults (16 years and above).
2 Introduction
It is in human nature to be curious and try to figure out what lies within and beyond our boundaries, and ever since the ancient Greeks and Romans people have been traveling (Noel, 2009). The evolving marketplace of the tourism sector has started to recognize the importance of understanding the behaviors, reasons for choice and preferences of today's travelers for a more profitable, satisfactory, and higher quality of service opportunities.
Consumer Behavior is the study of individuals, organizations and the methods they use to select, use and dispose of services, products, and experiences, or ideas to satisfy the urge and the effect that these processes have on the consumer and society (Noel, 2009).
This report that was conducted in October among 2,000 UK internet users aged 16 and over examines the holidays of UK residents, both domestic and overseas, and forecasts what the market will look like in the coming five years. It explores the opportunities and challenges that operators faced in 2014 and investigates the core drivers behind changes in the market. The report also looks at booking lead times, expenditure on holidays and consumer attitudes towards paying for a vacation.
1 Aim of the Study
The study aims at examine the nature of consumer behavior and the factors influencing the choice of hotels and accommodation for travel, the travel airline and the destination of the holiday. The secondary aim was to study the trend of the UK holiday market as of 2014 and an outlook for the future market.
2 Objectives of the study
* To understand the changes in consumer behavior in the UK holiday market
* To get an insight into the future of the tourism industry in the UK
* To explore the relationship between changes in UK holidays and hotel choice
* To determine the consumer booking behavior
3 Findings
3 Tourists tend to explore further
According to MINTEL report, in the next one year, over a third of consumers think that they will take a vacation to a new country, and almost half say they are quite likely to visit a new resorts. Younger holidaymakers were the most eager to explore new holiday homes with half of 16-24-year-olds (49%) saying this is quite likely, and a further 16% prepared to say they are confident they will go to a new holiday destination. Meanwhile, older users are more conservative, in that, 56% of over 65 and 51% of 55-64-year-olds said that they would not or would be unlikely to visit a country they had never been to before.
4 An overview of Air Travel
The largest airline in the UK, by total passenger uplift, easyJet, increased volumes carried by a significant 6% during the last one-year ending October 2014; this is according to MINTEL’s report. Apart from Easy Jet, British Airways Plc, Monarch Airlines, Virgin Atlantic Airways and Loganair recorded an increased carriage volume of 3%, 2.5%, and 6.5% respectively. The parent company of British Airways, IAG, took over Aer Lingus, the national flag carrier of Ireland which hubs in Dublin Airport. The 1.36 billion euros takeover offer was accepted in January 2015 by the board.
TUI and Thomas Cook both increased ATOL licensed passenger capacity in the 12 months ending February 2015, an indication of returning confidence to the overseas holiday market. One of the highest rising holiday firms in the UK is Dnata, owned by the Emirates Group. The UK's two largest tour operators TUI and Thomas Cook both increased ATOL licensed passenger capacity in the 12 months ending February 2015, an indication of returning confidence to the overseas holiday market (Schimmel, 2014).
Virgin Atlantic commenced a major restructuring of operations during 2014, following its 2012 merger with US Delta Airlines as it closed its domestic brand Little Red (Schimmel, 2014). Budget carrier Jet2.com is seeing the strongest growth among the second tier of UK airlines after the ‘big two' easyJet and BA, with passenger volumes up 13% during the 12 months ending October 2014.
5 Choice of destination
Regionally, there were substantial regional differences with how many holidays are taken. Those in the North East, East and Scotland made the fewest foreign holidays per person with Londoners and those in the North West taking the most (Perrey, Freundt, & Spillecke, 2015). Londoners took on average 3.9 holidays in the UK and internationally, up from 3.3 in 2013. They also took the most foreign vacations per person, with 11% taking 4 or more international holidays in the past 12 one year. This is the same as the 2% of those in the East and 3% of the ones in the East Midlands taking 4 or more foreign holidays. The Welsh made the greatest number of national holidays at 2.2 per person (Perrey, Freundt, & Spillecke, 2015).
Internationally, holiday destinations have remained largely unchanged for the past four years with Turkey and Portugal still making the top ten despite decreasing in popularity by one per cent. Beach breaks are still the top holiday choice for 2015 at 25%, but more tourists of 12% will decide on cultural city breaks than in recent years. City breaks, luxury and adventure; and all-inclusive trips are also becoming more popular. 16% more holidaymakers are looking for adventure trips compared to last year, a 12 percent increase, with only 10 percent planning to pay for a cottage or villa rental.
3.6 Choice of holiday package
25% of the total number of respondents took a package holiday in the UK in 2014, up from 18% in 2013, 23% in 2012 and double the number in 2011 when only 12% of consumers said they had taken a domestic package holiday (Cater, Garrod, & Low, 2015). Packages remain an attractive option with value cited as the primary reason for this (Morpeth, & Hongliang, 2015). Greatest value for money (but not necessarily lowest prices) remains a top ten booking essential for the majority of consumers 66%).
6 Online Early Booking being embraced
According to MINTEL Report 2014, Among all those who booked at least one vacation abroad online 49% of those surveyed in the 12 months to August 2013, 96% used a PC or laptop as their booking device. Booking on a mobile or tablet remains most popular amongst younger travelers with 46% of 16-24-year-olds who booked a holiday abroad online saying they have used one of these two devices. The longer in advance a person booked their previous holiday, the more likely they are to accept that they book in advance to get value for money. The top reasons cited for booking in advance were: better deals/cheaper prices (63%); to get better availability (49%); better choice (33%) and to get time off work (26%)
7 Accommodation Choices
Premier Inn and Travelodge continually dominate the market by some properties, but Whitbread-owned Premier Inn has cemented its position as market leader, increasing its lead over rival Travelodge from 140 to 159 properties. The two budget Giants are also the two most favorite hotel brand websites by some unique visitors, but both have seen unique visitors to their we...