European staycationers
Author: Countries and Consumers
Date published: 11 Sep 2009
Growing numbers of European consumers are choosing to forsake foreign climes and holidaying nearer home in their own countries and even at home. The recession, higher fuel prices and climate change are driving this staycationing phenomenon.
Key trends
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Holiday budget cuts; |
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Home sweet home; |
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Europeans spurn the airport for the car showroom; |
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Little luxuries. |
Commercial opportunities
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Special offers for locals; |
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Inexpensive indulgence purchases; |
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Targeting domestic holidaymakers. |
Background
The staycationing trend may have started in the USA but more Europeans are discovering the benefits of holidaying at home. Consumers have found that a passport is not required to escape life's treadmill. As one contributor to the BBC World Service website recently observed: “This year, as always, I will be sailing my couch into a tropical sunset courtesy of cable TV. Non voyage, everybody!” Statistics compiled by Euromonitor International reported strong growth for domestic trips in 2008.
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| Domestic vacation trips 4-7 days: 2006-07 and 2007-08 |
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| Source: Euromonitor International: Travel and Tourism: from trade sources/national statistics |
Other research, by polling agency Ipsos, indicates that more Europeans, 46%, will stay in their own countries this year. As with previous years, the Italians (68%), Spanish (67%) and French (54%) are most likely to stay in their home country for their summer holidays. The Dutch may also discover the joys of holidaying at home if they respond to the plea to patriotism made by their tourism minister, as reported in the Economist, to “please stay in the Netherlands this summer.”
And it's not all bad news for the tourism industry, as domestic holidaymakers take up the slack caused by a dip in foreign vacationers. Other sectors of the retail market are also capitalising on the staycationing trend, as consumers take advantage of bargains and splurge on big ticket items, or indulge in low cost sweet or savoury treats.
Holiday budget cuts
Fewer Europeans plan to head away on holiday this summer, according to an Ipsos survey. But while the economic crisis may be causing some belt-tightening, Europeans are reluctant to consign their bikinis and shorts to the back of the wardrobe just yet. According to an Ipsos statement, Europeans “tend to live with the crisis wherever that is still possible, rather than radically change their lifestyle.” So instead they're holidaying closer to home in order to cut back on spending. The research, published in June, indicates the number of Europeans planning to take a holiday away from home dropped an average of three percentage points to 64% this year from 2008, with the French cutting back far more than other nationalities (down eight points). Italians are least willing to sacrifice their holiday plans, with 76% scheduling a break away this summer, down one point from last year. However, Italians also expressed a greater preference than all others for holidaying in their own country. They're also cutting back less, with holiday budgets dropping only 4% from 2008, compared to cash-strapped British tourists, who expect their holiday spend to fall 14%, more than double that of those with the next biggest drop, France and Spain, down 6%. In countries where the proportion of people claiming to holiday in their own country is highest (France, Spain, Italy) the budget is lower. It's also lower in Spain and Italy where holidaymakers expressed a preference for vacationing in countries closest to them, the least expensive foreign destination option.
| Holiday plans by country for the period between June and September 2009 |
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Several holidays planned |
One holiday planned |
| All |
21% |
43% |
| Italy |
23% |
53% |
| France |
15% |
51% |
| UK |
37% |
27% |
| Belgium |
18% |
46% |
| Austria |
18% |
44% |
| Spain |
18% |
43% |
| Germany |
14% |
42% |
| Note: The data is derived from a study entitled: Ipsos/Europ Assistance Barometer Intentions and Concerns of Europeans in relation to Holidays June 2009 |
It is significant that in Italy, August the 15th, the traditional holiday of “Ferragosto” celebrating the feast of the Assumption of the Virgin, which sees Italian families together at the beach or in the mountains, saw fewer Romans deserting their city. According to a study by Ama, the company that collects rubbish in Rome, during Ferragosto, the city was not deserted judging by the 1,759 tonnes of garbage collected, an increase of 746 tonnes of waste on the same day last year.
The Germans, and above all the Belgians and Austrians, who have some of the highest “holiday budgets”, proved to be the least vulnerable in relation to the recession.
It's a different story in Britain, where the number of those planning a holiday at home in the UK has risen 15% since October. A study by Visit London and Visit Britain, published in March, has revealed that 60% of Brits were reconsidering taking holidays abroad this year, double the number of staycationers as 2008, as a result of the recession and the falling value of the pound. It's a trend backed up by survey results from insurance firm Legal & General, which indicated three in five people were changing their holiday plans from last year to a staycation. A further 21% planned to stay with friends and relatives, rather than face the expense of a hotel booking. Latest figures from the Office for National Statistics, released in August, show trips abroad by UK residents have slumped 17% in the first half of 2009.
The fact that people are choosing to holiday in the UK, rather than abandoning a vacation altogether, indicates the value people place on escaping the daily grind, even if it's not too far away. “It shows Brits continue to be concerned about the credit crunch but spending on holidays is more protected than many other purchases. While 48% of us are, or intend to, cut back on holiday spending, far more of us are cutting back in other areas – such as food (7%) fuel (69%) or clothes (64%),” the research and insight manager for Visit Britain told the Telegraph newspaper. Europe-wide holidays seem increasingly to be seen as a necessity rather than a luxury, and staycationing makes getting away from it all more affordable.
Home sweet home
The recession may have taken the edge off British consumers' appetite for foreign travel but their taste for sweet chocolate treats hasn't abated. An increase in comfort eating has seen Cadbury triple its net profit and raise its forecast for the year, according to a July report in the UK's Times newspaper. The company said its performance had been boosted by the increased “stay-at-home culture” enforced by the recession. Cadbury's chief executive said: “People want to indulge and treat themselves. We are an attractive product in a difficult time.”
Sales of Domino's Pizza in the UK and Ireland also rose by 17.8% last year. “A lot of people are staying at home instead of going out,” said Domino's chief executive, adding “But they have not developed an immediate desire to cook, so they are ordering in.”
Gauging by the increase in subscribers to BSkyB in the first quarter of 2009, the fastest rise in five years, much of this chocolate and pizza is probably being eaten while watching pay TV. Customers who want to stay home during the recession to cut spending are being lured by new, cheaper high-definition services and strong programming.
Europeans spurn the airport for the car showroom
Consumer spending in France and Germany has rebounded in recent months but they're not splashing out on foreign poolside holidays. Much of this upturn is driven by government initiatives to encourage consumers to scrap old polluting cars for more environmentally friendly models. French official statistics released in July, reports the Wall Street Journal, indicate household spending on manufactured goods grew in the second quarter of 2009, mainly due to spending on cars. Shoppers also snapped up bargains on clothing and other household goods, as retailers started aggressively discounting goods before the traditional late June summer sales.
There's also increased consumer confidence about the economy in Germany, according to international broadcaster Deutsche Welle. Inflation has plummeted to zero and interest rates are rock bottom, providing little incentive to salt money away for a rainy day, so consumers are hitting the shops buoyed by hopes of light at the end of the tunnel. Stable prices have triggered increased consumer spending, especially on larger purchases like household appliances and home entertainment. As in France, there's also been a surge in car sales fuelled by the government's green initiative. And in Italy, the latest country to indicate a mild economic pick-up, consumer confidence rose in July more sharply than expected, to the highest level since November 2007.
Little luxuries
When consumers find they can't afford that big foreign holiday it seems they're compensating by treatment themselves to little luxuries. The latest spending data from Visa Europe, the UK's leading payment system, released in April, reveals that as spending on foreign holidays has fallen, consumer expenditure on eating out and entertainment has increased, despite the recession. The number of Visa debit and credit card transactions processed at UK restaurants in the first three months of 2009 rose 19% compared with the same period in 2008, although the amount spent only rose 3%. In the same period, the number of transactions at bars, nightclubs and discos rose by 10% with total spend rising by 8%. By contrast, the number of transactions at travel agencies and operators in the first quarter remained static, and the amount spent fell 2%, as the usual January and February sharp jump in holiday bookings failed to materialise.
The Commercial Director of Visa Europe said the data indicates “consumers are eating out more but at less expensive restaurants. It also suggests that consumers have been taking advantage of the special offers many restaurants have been running.”
Outlook
In the short to medium term, or at least until the economic climate brightens, staycationing is likely to remain a popular choice. Over the longer term, climate change concerns and rising fuel prices mean the staycationing trend is probably here to stay.
Countries and Consumers