City Breaks in the UK - April 2004

SUMMARY

The UK city breaks market has fluctuated over recent years, in line with the overall demand for domestic breaks. However, UK city breaks have become an integral part of the British way of life as busy lifestyles have led to the increased demand for shorter breaks.

Domestic breaks still form the majority of trips made by UK residents. However, in recent years, the influx of low-cost airlines as well as the proliferation of value-for-money overseas packages has stripped demand for UK holidays. The market's dependence on the erratic British weather has also made it vulnerable to fluctuations in demand.

Nonetheless, increased dependence on the Internet to purchase travel products, particularly accommodation and flights, is also facilitating domestic city break holidays amongst British consumers. Meanwhile, the emergence of 'urban tourism' has provided a much-needed economic boost to cities in the UK, providing local governments with the incentive and financial means to regenerate and revitalise city centres through cultural and community-based initiatives.

A UK city break is defined as a trip of more than one night, which involves the majority of the stay in one or more cities within the UK. Characteristically the city break is often one to three nights, which also makes it a short break. Whilst not all short breaks are city breaks, analysis of the short break market also gives a good indication of future trends for the city break market.

The city break for this report refers only to the leisure market and does not include business trips. Only domestic city breaks are included in the report.

Also considered is the inclusive tour market, which includes both pre-booked transportation and accommodation, usually arranged through one operator and sold at an inclusive price. Other elements or activities may also be included in the package, such as car hire or city tours. An independent holiday is planned and booked as individual elements by the holidaymaker, often direct with the supplier, and often from separate sources.

TABLE OF CONTENTS

Introduction and Abbreviations

• Definitions
• Consumer research
• ACORN

Abbreviations

Summary of Key Report Findings

• Recovering domestic holiday market
• The growth in the city breaks market is predicted to remain slow
• Future demographic changes augur well for the industry
• Key market trends
• London is still the top destination but overseas cities are narrowing the gap
• Key consumer findings
• Moving towards designer holidays

Market Factors

• Personal disposable income (PDI), consumer expenditure (CONEXP) and consumer confidence
• Figure 1: Gross domestic product (GDP), personal disposable income (PDI) and consumer expenditure (CONEXP), 1999-2007
• Changes in the UK population structure
• Figure 2: UK population structure, by age, 1999-2007
• Figure 3: UK adult population structure, by lifestage, 1999-2007
• Rising affluence is a boon to the industry
• Figure 4: UK adult population strcture, by socio-economic groups, 1999-2007
• Britons are working longer hours and are taking more short breaks
• The emergence of low-cost airlines
• Figure 5: Percentage change in scheduled passenger uplift of main low-cost airlines versus railway passenger journeys of long-distance operators 2000-02
• The Internet is now a key medium for city break purchases
• The British weather and seasonality
• Figure 6: Average regional temperatures, 2002
• Tourism and urban regeneration

Market Size and Trends

Market size

• An overview of the domestic holiday market
• Figure 7: The UK domestic holiday market, 1999-2004
• The domestic short breaks market
• Figure 8: The UK domestic short breaks market, 1999-2004
• The domestic city breaks market
• Figure 9: The domestic city breaks market, 2000-04

Key market trends

• Multiple city breaks are now the norm
• Figure 10: Proportion of UK holidays taken by city/short break holidaymakers, 2000-03
• The Internet is increasing in popularity as a booking channel
• Figure 11: Booking methods used for arranging UK city/short breaks, 2000-03
• Hotels still the number one choice
• Figure 12: Accommodation used by consumers on a UK city/short break, 2000-03
• Group sizes are growing
• Figure 13: Number of group members* on a UK city/short break, 2000-03
• Most UK city breaks are made by car
• Figure 14: Main method of travel used by consumers on UK city/short breaks, 2000-03

The Supply Structure

Accommodation suppliers

• Hotels
• Figure 15: Market level distribution of hotel groups in the UK, 1998-2002
• Major chains
• Independents and consortia
• Holiday centres, village parks and caravan sites
• Rail operators
• Figure 16: Regional destinations of UK tourists on city/short breaks by rail, 2003
• Coach and bus operators
• Figure 17: Regional destinations of UK tourists on city/short breaks by coach, 2003
• Scheduled airlines

Domestic city break tour operators

• UK breaks specialists
• Internet travel
• Figure 18: Amount spent on flights/holidays purchased over the Internet in the last three months, 2002-03

The Consumer

• Figure 19: Cities visited for a holiday, November 1997, January 2000, January 2002 and November 2003
• Growth in domestic trips now stagnant
• London is still the top domestic city
• Foreign city breaks are now part of an established holiday repertoire
• City breaks taken in the last five years
• Figure 20: City breaks taken in the last five years, by gender, age and socio-economic groups, November 2003
• Figure 21: City breaks taken in the last five years, by detailed lifestage and Mintel's Special Groups, November 2003
• Figure 22: City breaks taken in the last five years, by marital status, working status, region and ACORN categories, November 2003
• Figure 23: City breaks taken in the last five years, by media usage, supermarket usage and commercial TV viewing, November 2003
• City breaks in London, Blackpool, Edinburgh and York
• Figure 24: Top five city breaks in the UK, by gender, age and socio-economic groups, November 2003
• Figure 25: Top five city breaks in the UK, by detailed lifestage and Mintel's Special Groups, November 2003
• Figure 26: Top five city breaks in the UK, by marital status, working status, region and ACORN categories, November 2003
• Figure 27: Top five city breaks in the UK, by media usage, supermarket usage and commercial TV viewing, November 2003
• City breaks in Brighton, Bath, Oxford, Glasgow and other cities
• Figure 28: Next most popular city breaks in the UK, by gender, age and socio-economic groups, November 2003
• Figure 29: Next most popular city breaks in the UK, by detailed lifestage and Mintel's Special Groups, November 2003
• Figure 30: Next most popular city breaks in the UK, by marital status, working status, region and ACORN categories, November 2003
• Figure 31: Next most popular city breaks in the UK, by media usage, supermarket usage and commercial TV viewing, November 2003

The Future

• Foreign versus domestic UK city breaks
• Consumers want quality but at fair, value for money prices
• Diminishing profit margins
• Broadening of services

Forecast

• Figure 61: Forecast of the UK city breaks, by value and volume, 2004-09
• The booming economy has a positive influence on the market
• Britons are taking more breaks to attain a work/life balance
• To stay in the UK or go abroad?
• Factors incorporated