Travel up for UK residents but still below pre-recession level
In 2013, the number of trips taken by UK residents abroad remained below pre-recession levels as consumers remained cautious due to the strong decline in disposable income they have experienced. The economic downturn led many people to holiday in the UK, with the “staycation” trend taking over. In this respect outbound tourism was more affected by the recession than domestic tourism. In 2013, the number of domestic trips taken by UK residents remained relatively stable on the previous year, falling only slightly.
Strong performance for inbound tourism in 2013
UK inbound tourism reported strong growth in 2013 as the number of trips rose above pre-recession levels, helped by both the leisure and business categories. Incoming tourist receipts also reached a new high. While London did not see as many tourists as expected in 2012 as a result of the Olympics, the capital nevertheless emerged as the leading destination in 2013, hosting a record number of tourists, reaping the benefits of being centre stage during the 2012 Olympics. In addition, the economic growth reported in the second part of 2013 boosted growth in business travel and London remains one of the leading financial centres in the world, which helped to boost inbound tourism.
Hotels benefit from inbound tourism
The positive performance of the travel and tourism industry in 2013, especially in terms of arrivals, supported the development of the travel accommodation category, which reported modest growth in terms of value sales. Consumers remain highly price conscious, with many keen to find a last-minute deal, but hotels saw an improvement in occupancy rates and revPAR. The UK accommodation network continues to expand with new openings, a development that is leading to a degree of polarisation, with openings including budget hotels on one side and 4-star hotels on the other. The UK has seen a proliferation of budget accommodation as many consumers are price sensitive, while the use of private accommodation has been supported by websites such as Airbnb.
Strong focus on online sales
Online travel sales continue to grow and accounted for over half of total travel retail sales in 2013. Consumers are using the internet to search for travel information but also a larger number of people are booking holidays online. The trend is expected to continue over the forecast period as operators improve their website content and make the booking experience as consumer friendly as possible. Travel agents have continued to cut the number of outlets they operate and focused on improving their websites. Consumers are increasingly turning to the internet to gather information to make an informed decision; therefore a strong digital strategy will be key for operators going forward.
Subdued performance expected over the forecast period
The growth of the UK travel and tourism industry is expected to remain subdued over the forecast period. Consumer confidence increased in the second part of 2013 as the UK economy returned to growth, with house prices and inflation returning to below the 2% target growth rate; however consumer purchasing power remains below pre-recession levels and although inflation growth has fallen below the 2% target, wages have not yet caught up, therefore consumers are generally still cautious and looking for the best deals. In addition, there are some doubts as to whether the recovery will continue as it has been supported by rising Government and private debts, thus a new downturn could prove a real challenge for the travel and tourism industry in the future.
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