Fly-Drive Holidays - UK - March 2005

SUMMARY

"In line with the general long-haul market, the fly-drive market is now beginning torecover, after a difficult couple of years where the fly-drive market retracted in terms of volume.

Although fly-drive holidays do take place within the short-haul market, they are popular inlong-haul destinations and English speaking countries tend to dominate. They are usually featured inUS and Canada brochures and increasingly in Australasia and southern Africa brochures too.

There are many indicators suggesting that the fly-drive market will continue to show, as theexclusive consumer research for this report shows a substantial potential market, the number ofthose holding driving licences continues to increase and the British are generally becoming moreadventurous on holiday."

About Mintels research...

Using the latest consumer research, market size data and trend analysis, Mintels report offersyou vital new insight into the current state of the market, its prospects and the attitudes of keytarget audiences. You can use Mintels market research to:

• Build consumer-focused marketing strategies to maximise sales throughout fly-drive sectors
• Discover new ways of tempting key target groups towards high-price points.
• Measure market sizes and assess the scope for new player and product entrants
• Create realistic sales strategies based on market forecasts and insight into market drivers.

Intriguing findings include...

• Some 81% of men hold a driving license compared to just 61% of women in 2002/03
• Men have a greater propensity than women towards fly-drive holidays, as they do cars and drivingin general and in terms of age it is the 25-54-year-olds who are most likely to have been on afly-drive trip in the past two years.
• The proportion of those hiring a car for leisure usage has fallen to 3.4% in 2004 from over 5%in 1999
• 9% of respondents agreed that fly-drive has some appeal but they are not sure where they wouldlike to go yet and only 2% agreed that they have been on a fly-drive trip but would not go again.

TABLE OF CONTENTS

Introduction and Abbreviations

• Definitions
• Consumer research
• ACORN

Abbreviations

Summary of Key Report Findings

• Increased road usage in the UK
• Population growth leads to an increase in the number of drivers
• Declining leisure car hire market
• Long-haul return to growth and dominance of independent sector
• Some 896,000 fly-drive holidays taken in 2004...
• ...and 13 million potential fly-drivers in the UK
• Positive attitudes towards fly-drive
• The future

Market Factors

• Congestion
• Gender split of driving licence holders
• Figure 1: Full car driving licence holders, by gender, 1975/76-2002/03
• Car hire
• Figure 2: Total UK car and van hire market, 1998-2003
• Figure 3: Car hire market penetration, by use, UK, 1999-2004
• Rising fuel prices
• Figure 4: Crude oil prices, 1999-2004
• The overseas holiday market
• Figure 5: Overseas holidays and expenditure, at current and constant values, 1999-2004
• Inclusive versus independent
• Figure 6: Inclusive versus independent holidays by volume, 1999-2005
• Long-haul return to growth
• Figure 7: Long-haul holidays and expenditure, at current and constant values, 1999-2004
• Exchange rates
• Figure 8: Annual average exchange rates for Sterling against the euro and US Dollar, 1999-2004
• Consumer confidence
• Population changes: age
• Figure 9: Adult population, by age, 1999-2009
• Population changes: socio-economic group
• Figure 10: Adult population, by socio-economic group, 1999-2009

Market Size and Trends

• Figure 11: Fly-drive holidays and expenditure, 1999-2005

Market Segmentation

• Top holiday destinations
• Figure 12: Leading holiday destinations for UK holidaymakers, 2001-03
• Europe
• North America
• Australia
• South Africa

The Supply Structure

• Figure 13: Examples of operators fly-drive products and car premiums, 2005
• Weak Web information
• TUI UK
• MyTravel
• First Choice
• Thomas Cook
• Cosmos
• Virgin Holidays
• Examples of other fly-drive operators

The Consumer

Fly-drive holidays taken

• Figure 14: Fly-drive holidays taken, October 2004
• Figure 15: Fly-drive holidays taken, by gender, age and socio-economic group, October 2004
• Figure 16: Fly-drive holidays taken, by region and ACORN category, October 2004
• Figure 17: Fly-drive holidays taken, by detailed lifestage group, October 2004
• Figure 18: Fly-drive holidays taken, by media usage, supermarket usage and commercial TVviewing, October 2004

Desired fly-drive holiday destinations

• Figure 19: Desired fly-drive holiday destinations, by gender, age and socio-economic group,October 2004
• Figure 20: Desired fly-drive holiday destinations, by region and ACORN category, October 2004
• Figure 21: Desired fly-drive holiday destinations, by detailed lifestage groups, October 2004
• Figure 22: Desired fly-drive holiday destinations, by media usage, supermarket usage andcommercial TV viewing, October 2004
• Fly-drive holidaymakers by future destinations
• Figure 23: Fly-drive holidaymakers and types of fly-drive holidays desired to take in thefuture, October 2004

The Future

• Strong consumer potential
• Long-haul favourites will continue to dominate
• Short-haul opportunities
• Flexibility and independence
• More adventurous holidaymakers

Forecast

• Figure 24: Forecast of expenditure on fly-drive holidays, 2005-09
• Figure 25: Forecast of the number of fly-drive holidays taken and average expenditure, 2005-09

Appendix: Research Methodology