Analysis: No full outbound recovery until 2015, says Mintel

ill not recover to the level of 2009 for at least two years and a return to pre-recession volumes is unlikely even by 2015.

That is the worrying conclusion of market research analyst Mintel in its recently published Holiday?Review, its latest study of the UK travel market.

Mintel predicts a small increase in UK trips abroad this year – a forecast made ahead of the?recent decline in sales recorded by trade analyst GfK Ascent.

GfK Ascent reported a 1% decline in summer 2011 bookings to the end of March compared with the same stage a year ago, against what had been a 5% year-on-year increase in sales two months previously.

Mintel quotes Office for National Statistics (ONS) figures showing the UK market suffered the sharpest contraction in its history in 2009, with outbound holiday trips falling from a peak of 45.5?million in 2008 to 38.5 million – a decline of more than 15%.

ONS figures show a further decline to 36.1 million overseas holidays from the UK in 2010. Mintel predicts a slight recovery to 37.5 million departures this year and small increases each year thereafter to 2014 when it forecasts a return to just over 40?million trips, rising to 41.6?million in 2015.

But this would still be almost 10% down on 2006-08, meaning at least a decade of downturn for the sector.

Consumer research conducted as part of the Holiday Review found almost two out of five respondents would go on holiday less as a result of deteriorating finances – almost double the rate of those who would cut spending in other areas.

The rate was surprisingly high among those who took an overseas holiday last year, with 43% saying they would cut back this year compared with 39% of all respondents.

Among this group of 2010 holidaymakers, 27% said they would cut their spending on items other than travel, 21% would take shorter holidays and 18% would switch to a UK break. One in 10 of those who went away in 2010 said they would cut out holidays altogether this year, almost one in four would take fewer holidays and 17% would go away, but travel nearer to home.

The figures are striking because surveys regularly show that those who travel abroad in any year are most likely to go away the year after.

Mintel reports: “The most popular reaction to a worsening financial situation in terms of holiday plans is a reduction in the number [of holidays].
“Four in 10 say they would do this. One in five would react by booking in advance – another one in five would try last-minute deals to save money.”

Breaking down the results by UK region, Mintel notes: “Consumers who say they would switch to UK holidays are least likely to be from the south and most likely to be from the Midlands.”

However, a separate study by Mintel and researcher NOP of the spending priorities of almost 2,000 UK adults, reported in the Mintel Holiday Review report, found one in four rated “a major foreign holiday” as their top priority – five percentage points up on the proportion in a similar survey in 2009 and higher than at any time since 2006.

The same survey found “taking more short breaks” was a priority among 23% of UK adults – making these the top two spending priorities am