Tourism Trends from Visit Britain


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What are the latest trends in inbound and domestic tourism? How is Britain perceived as a destination for a holiday by Britons and overseas residents? How is consumer (and tourist) behaviour evolving? What are the major upcoming challenges and opportunities for tourism businesses? These are some of the questions that this presentation will attempt to answer.

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Tourism Trends from Visit Britain

  1. 1. Tourism Trends David Edwards Tourism Trends Manager June 2008
  2. 2. The £85.6bn pie
  3. 3. Global picture – share of international arrivals in 2007 4 in 5 are intra-Europe trips 9 in 10 are intra-AP trips
  4. 4. UK’s global market share of international tourism 6 th most visited destination and earner from international tourism
  5. 5. Trends in inbound and outbound tourism 1991 – Gulf War 1994 – Channel Tunnel 1997 – Asia finance crisis 2001 – FMD and 9/11 2003 – Gulf War/SARS 2004 – EU expands
  6. 6. The UK’s International Tourism Balance of Payments
  7. 7. Contrasting trends in number of inbound visits 2000-07 +1.3 million from Spain +1.1 million from Poland +900,000 from Ireland +640,000 from Italy +630,000 from Germany -510,000 from USA -243,000 from Japan -79,000 from Israel -62,000 from Greece -43,000 from Hong Kong
  8. 8. Shorter length of stay drives down spend per visit 43% inbound visits are 1-3 nights Outbound length of stay down from13.3 to 10.0
  9. 9. Inbound visits to the UK by region of the world Forecast for 2008: Volume +2.0% Value +1.4%
  10. 10. Regional spread challenge: inbound shares
  11. 11. Over the past few years... <ul><li>UK population is more diverse (550,000 A12 nationals live in the UK) </li></ul><ul><li>More UK residents own a second home abroad (around 250,000) </li></ul><ul><li>More Brits live permanently abroad (IPPR estimate is 5.6 million) </li></ul><ul><li>More foreign students study at UK universities (49,000 entered in 2007) </li></ul><ul><li>More UK based multi-nationals </li></ul><ul><li>Competition for holiday visitors is more intense (Krakow, Dubai, Marrakech) </li></ul>
  12. 12. Leading to a shift in the ‘purpose mix’ of inbound trips 1979…2007
  13. 13. Relative contribution to growth in visits, 1993-2007 Short-haul mature 58% Holiday 16% Short-haul emerging 21% Business 32% Long-haul mature 13% VFR 42% Long-haul emerging 8% Study/other 10%
  14. 14. Visiting Friends and Relatives trips – do they really matter? <ul><li>23% of inbound spend in 2007 (+138% ‘real’ growth since 1979: 18% ‘holiday’ growth) </li></ul><ul><li>Regional spread: 60% of VFR spend is outside London, 40% for holiday visits </li></ul><ul><li>Seasonality: 49% of VFR visits between October and March, 38% of holiday visits </li></ul><ul><li>1.8m visits to museums/galleries, 2.6m visits to a castle, church or historic house </li></ul><ul><li>8 million nights in paid accommodation </li></ul><ul><li>Hosts spend too! </li></ul>
  15. 15. Outbound versus domestic <ul><li>Brits took 123 million domestic overnight trips in 2007 compared to 70 million outbound trips </li></ul><ul><li>But spent £172 per domestic overnight trip and £507 per outbound trip </li></ul><ul><li>Meaning that we spent £21bn on domestic trips and £35bn on outbound </li></ul><ul><li>For every £1 spent on a domestic overnight holiday, we spent £2.11 on outbound holidays </li></ul>
  16. 16. Domestic overnight trends
  17. 17. Regional spread challenge: domestic overnight shares In 1996 32% trips were to a large city, by 2007 it was 39% Seaside destinations accounted for 25% of trips in 1996 now just 21%
  18. 18. What we do well (inbound visitors) <ul><li>Britain perceived as a world leader (Ranked 3 rd in NBI behind France and Italy) </li></ul><ul><li>Potential holiday visitors express desire to experience our heritage and culture </li></ul><ul><li>Among the most popular activities undertaken by holiday visitors </li></ul><ul><li>In an increasingly competitive market vital to build on USPs, not rely solely on tactical use of ‘fashion’ </li></ul><ul><li>But heritage and culture must be presented imaginatively </li></ul>
  19. 19. What we do well (domestic visitors) <ul><li>Key strengths (attributes rated highly and strongly correlated with customer retention and destination choice) </li></ul><ul><li>Wide variety of accommodation </li></ul><ul><li>Opportunities to visit museums, galleries and contemporary arts </li></ul><ul><li>Opportunities to visit famous buildings and monuments </li></ul><ul><li>Interesting cities, towns and villages to visit </li></ul>
  20. 20. What we do less well <ul><li>Expectations of ‘welcome’ are poor (UK ranked 16 th by NBI, Canada top) </li></ul><ul><li>‘ availability of good restaurants and fine dining’ seen as a weakness by Brits </li></ul><ul><li>But key issue is ‘Value for money’: an attribute strongly correlated with visitor retention and destination choice </li></ul><ul><li>Weather… </li></ul>
  21. 21. How Britons describe a holiday in Britain 53% choose negative adjective
  22. 22. Socio-demographic challenges and opportunities <ul><li>Older age groups more important in relative terms (1 in 6 Brits over 65) </li></ul><ul><li>Population set to grow by 7 million by 2031 </li></ul><ul><li>Domestic overnight tourism highly dependent on higher social grades (ABs account for 39% of spend but 20% of population, DEs 14% spend, 31% population) </li></ul><ul><li>The ‘family unit’ is evolving </li></ul>
  23. 23. The economy <ul><li>Downturn may be worse than expected </li></ul><ul><li>Inflation as much a threat as the ‘credit crunch’ </li></ul><ul><li>Average household paying £15 more per week for groceries than this time last year </li></ul><ul><li>Airlines feeling the pinch </li></ul><ul><li>Is this an opportunity for domestic tourism? </li></ul>
  24. 24. Leisure time choices – a cluttered marketplace <ul><li>Internet surfing (61% of households have access, of which 84% broadband) </li></ul><ul><li>Cinema (157 million admissions in 2006) </li></ul><ul><li>Shopping </li></ul><ul><li>iPods, DVDs, TV channel hopping </li></ul><ul><li>DIY/gardening (17 mins per person per day) </li></ul><ul><li>Hobbies </li></ul><ul><li>Driving the kids to their leisure activities </li></ul><ul><li>Tourism activity </li></ul>
  25. 25. Challenge of the more demanding and unpredictable consumer <ul><li>‘ what you do’ more important than ‘where you do it’: ‘experiences’ not ‘destinations’ count </li></ul><ul><li>Authenticity : travel-savvy visitors expect more than earlier generations </li></ul><ul><li>Fly in on Ryanair, stay in a Hilton, grab lunch in McDonalds: no neat segments </li></ul>
  26. 26. Short-term risks and opportunities <ul><li>Exchange rate fluctuations </li></ul><ul><li>‘ Open Skies’ </li></ul><ul><li>Eurostar to St Pancras </li></ul><ul><li>Liverpool08 </li></ul><ul><li>Avian flu, Blue tongue… </li></ul><ul><li>West Coast Main Line improvements </li></ul>
  27. 27. The future (1) <ul><li>Economic cycles will ensure good years and bad years but… </li></ul><ul><li>… has the era of rising discretionary spending power and falling travel costs ended? </li></ul><ul><li>New global hubs for business set to challenge London (Mumbai, Shanghai) </li></ul><ul><li>Socio-demographic change will impact why we travel and who we travel with </li></ul>
  28. 28. The future (2) <ul><li>Geo-politics matters (China won’t have a significant balance of payments deficit) </li></ul><ul><li>Fashions will come and go </li></ul><ul><li>Technology will alter how we research, book, experience and recount travel </li></ul><ul><li>Climate change will shape government, business and consumer behaviour </li></ul><ul><li>Competition for the tourist $, and potential tourists’ attention will intensify </li></ul><ul><li>There will always be ‘shocks’ </li></ul>
  29. 29. To find out more…