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SYN066 · UK Holidays and Tourism of 21© Cobweb Information Ltd, 2015

UK Holidays and TourismUK Market Synopsis

SYN066 · April 2014

Introduction

This report provides an overview of the main factors affecting the UK holidays and tourism sector.It aims to help small business owners understand the opportunities and risks involved in startingup and trading within this sector.

This briefing has been compiled from online sources, so that readers can carry out furtherresearch with ease. Sources include industry bodies, national press, Government research,company reports, market reports and trade associations.

Summary

The holidays and tourism market can be divided into three categories: inbound tourism (overseasvisitors to the UK); domestic tourism (UK tourists visiting UK destinations); and outbound tourism(UK tourists visiting destinations outside the UK).

Overall, the UK visitor economy is buoyant. Healthy numbers of UK and international visitorscontributed £127 billion to the UK economy in 2013. This sector is forecast to grow by 3.8%each year to 2025 - faster than the 3% annual growth predicted for the UK economy as a whole.(www.visitbritain.org/insightsandstatistics/visitoreconomyfacts).

VisitBritain, the Government agency responsible for promoting UK tourism abroad, hasset out a growth strategy that aims to attract 40 million overseas visitors a year by 2020.(www.visitbritain.org/tourism_2012_legacy/britain_tourism_strategy).

However, there is polarisation in some parts of the sector. In accommodation, luxury and budgetends of the market have performed well, while mid-range providers have struggled.

The increase in domestic tourism has been at the expense of outbound travel. This, along withincreasing use of online booking providers, has led to the closure of a number of traditional travelagents in recent years.

Industry overview

The holidays and tourism sector includes the following sub-sectors:

Accommodation

In 2012, domestic tourists made 126 million trips involving an overnight stay in GreatBritain (England, Wales and Scotland). This is a slight decrease on the 2011 figure of 126.6million. (www.visitengland.org/Images/GB%20Tourist%202012%20-%2030-08-2013%20-%20FV_tcm30-38527.pdf, page 40).


In the same year, there were 29.28 million visits involving at least one overnight stay byoverseas tourists to the UK, up slightly from 29.20 million in 2011. (www.visitbritain.org/Images/AcommTrends2004-2012_tcm29-14605.xls).

For both types of tourist, around 60% of trips involved a stay in paid-for accommodation, ratherthan with friends or relatives, or in their own property.

Hotels

Research by PricewaterhouseCoopers (PwC), published in 2013, predicted that occupancy inLondon hotels would increase from 81% in 2013 to 82% in 2014. The average daily rate (ADR) fora London hotel was expected to rise to £138.19 in 2014. (www.pwc.co.uk/hospitality-leisure/uk-hotels-forecast/index.jhtml).

Occupancy in regional hotels averaged nearly 70% in the first six months of 2013, and wasforecast to reach 71% in 2014, the highest level since 2000. According to PwC, this has beendriven by higher occupancies in budget hotels. The research predicted that pressure from thissection of the market would contribute to a marginal decline in ADR for 2013, but that it wouldrecover by 1.4% in 2014.

The PwC research found that of 20,000 new rooms set to become available in 2013 and 2014across the UK, half would be budget rooms and a quarter would be four-star rooms.

According to a hotel performance report by BDO, chain hotels Premier Inn and Travelodgedominated the UK branded budget sector in 2012. Premier Inn had more than 50,000 rooms inDecember 2012. Other budget hotels also increased their share in 2012, with Tune Hotels andAccor Hotels' Ibis brand planning further expansion in 2013. (http://static.bdo.uk.com/assets/documents/2013/04/BDO_Hotel_Britain_Report_2013.pdf).

'Boutique' hotels also represent a growing area of the market. These are typically small,independent, luxury hotels, though some large hotel chains have launched boutique brands,such as InterContinental Hotels Group's Hotel Indigo chain. While hotels in the budget andluxury sectors of the market are performing well, mid-range and independent hotels have felt theeffects of the economic climate more acutely.

Small, unbranded independent hotels in coastal resorts accounted for most of the 40,000 hotelrooms that closed in the UK between 2003 and 2013, according to hotel industry consultantMelvin Gold. He predicted that at least 60% of UK hotels would be part of branded hotel chainsby 2023. (www.melvingoldconsulting.com/Press%20release%20on%20Hotel%20Closures%20in%20the%20UK.pdf).

Melvin Gold's research revealed that nearly 5% of all rooms in the UK's serviced accommodationsector are in hotels belonging to consortia (branded membership networks providingindependent hotels with support and marketing services). Familiar names include Classic BritishHotels, which has around 70 independent hotels operating under its name, and Best Western,which has over 270 hotels in Great Britain.

A UK hotel industry survey by Deloitte (2012) asked hotel owners, operators, lenders, developersand investors for their views on market and investment trends. 28% of respondents predictedthat the UK hotel market would experience an increase in corporate demand in 2013, and 18%expected bookings to increase as more people decided to holiday at home. However, 26%believed a stronger pound would decrease inbound tourism. (www.deloitte.com/assets/Dcom-


UnitedKingdom/Local%20Assets/Documents/Industries/Consumer%20Business/uk-cb-brighter-skies-ahead.pdf, page 10).

When asked how easy it was to finance hotel developments and acquisitions, around half ofthose surveyed said it was impossible to secure finance for any project in the regions, while 17%gave the same response for projects in London.

Most participants believed it was easier to gain finance for acquisitions than for developments.Nearly a third said that budget/midscale hotel acquisitions were the easiest type of project towin finance for in the regions, while more than half agreed that luxury/upscale hotel acquisitionswere the easiest to fund in London. Luxury/upscale developments were considered the mostdifficult projects to finance, both in London and the regions.

B&Bs and guest houses

VisitEngland's 2012 Great Britain Tourism Survey (GBTS) reported that UK B&Bs and guesthouses provided accommodation for around 1.1 million business trips and 3.6 million domesticholiday trips during 2012. The survey also found that B&Bs are more often used for shortleisure trips (between one and three nights) than for longer leisure trips (of more than fournights). (www.visitengland.org/Images/GB%20Tourist%202012%20-%2030-08-2013%20-%20FV_tcm30-38527.pdf).

VisitEngland's Tourism Business Monitor found that around half of B&Bs and guesthouses in England had more summer holiday visitors in 2013 than in 2012, while 17%reported a fall in numbers. (www.visitengland.org/Images/Accommodation%20Sept%202013%20v3_tcm30-38756.pdf).

According to the United Kingdom Occupancy Survey, room occupancy rates in guest houses rosefrom 55% to 59% between 2011 and 2013. In B&Bs, they rose from 52% to 53% during the sameperiod. (www.visitengland.org/Images/May%202013%20UKOS%20newsletter_tcm30-38353.pdf,page 11).

Many local authorities use B&Bs to provide emergency accommodation for homeless families.According to official figures, the number of homeless families with children living in B&Baccommodation in England reached 2,100 in September 2013, a rise of 4% since September2012. Of these families, 790 had been there longer than the recommended legal limit of sixweeks, a decrease of 10% compared to the previous year. (www.gov.uk/government/uploads/system/uploads/attachment_data/file/264836/Statutory_Homelessness_3rd_Quarter__Jul_-_Sep__2013_England__2_.pdf).

Rental cottages and self-catering accommodation

According to the GBTS, total spending on rented self-catering accommodation by domestictourists in Great Britain remained at around £2.7 billion in 2011 and 2012. However, spendingin England rose slightly from £2.0 to £2.1 billion, while Scotland and Wales both saw slight fallsin spending. (www.visitengland.org/Images/GB%20Tourist%202012%20-%2030-08-2013%20-%20FV_tcm30-38527.pdf, page 55, and www.visitengland.org/Images/GB%20Tourist%202011%20-%20FV_tcm30-35051.pdf, page 55).

Levels of income provided by holiday lettings vary enormously according to the locationand property type. According to Trip Advisor's Holiday Lettings website, a one-bedroomapartment in London could provide an annual income of £55,440 a year, based on an average


weekly rental rate of £1,386 and a typical occupancy of 40 weeks a year. By comparison, a two-bedroom cottage in Cornwall could earn £21,658 a year, based on a weekly rent of £833 anda typical occupancy of 26 weeks. (London and Cornwall were cited as the most popular UKdestinations for summer holiday rentals in 2013.) (http://resources.holidaylettings.co.uk/pdf/hl_2013_property_trends.pdf).

In some areas of the UK, holiday home owners are reportedly able to charge guests more thandouble what a landlord could earn from letting the same property as a residential tenancy.However, holiday letting fees vary with seasonal demand, and investors may not be ableto rent their properties all year round. (www.thisismoney.co.uk/money/mortgageshome/article-2414887/Goldmines-roses-round-door--join-holiday-let-boom-Renting-property-tourist-hotspot-make-1-000-A-WEEK.html).

Research by Halifax revealed that property prices in some coastal locations, such as Porthmadogin Wales and Seaham in the North East, have more than doubled between 2003 and 2013.(www.lloydsbankinggroup.com/media/pdfs/halifax/2013/270513_Seaside_Towns.pdf).

Demand for self-catering serviced apartments and 'apart-hotels' is increasing, particularly fromthe corporate market. According to a report by serviced apartment agents Savills, occupancyin 'aparthotels' was almost 6% higher than serviced hotels during 2012, while operatingmargins were almost double. (www.bpf.org.uk/en/files/reita/reita_org_documents/analysis/Savills/2012_UK_Serviced_Apartment_report.pdf).

Apart-hotel chain Roomzzz Aparthotel reported that September 2013 was its peak month todate, with year-on-year revenue up by 8%. (www.traveldailymedia.com/199268/self-catering-proves-a-hit-for-uk-breaks).

Campsites/caravans

Around a quarter of the 57.7 million domestic holiday trips taken in Great Britain in 2012 involvedcamping or caravanning, according to the GBTS. These were spread fairly evenly across camping,owned static caravans, rented static caravans and touring caravans. (www.visitengland.org/Images/GB%20Tourist%202012%20-%2030-08-2013%20-%20FV_tcm30-38527.pdf).

In 2013, the Camping and Caravanning Club, which operates a franchise network of 129 campingand caravanning sites across the UK, revealed that family bookings were up by 58% betweenAugust 2012 and August 2013. (www.campingandcaravanningclub.co.uk/news/2013/aug/family-camping-summer-bookings-boom).

More novelty and luxury camping and caravanning providers have entered the market in recentyears. These include vintage/boutique or deluxe caravan parks, eco-friendly caravan parks usingreclaimed and recycled furniture, lodge parks, gypsy-style caravan parks, and camping sitesproviding yurt, tipi and camping pod hire.

Examples of specialist caravan and camping sites include LoveLane Caravans(www.lovelanecaravans.com), Gypsy Caravan Holiday Breaks (www.gypsycaravanbreaks.co.uk),Wigwam Holidays (www.wigwamholidays.com) and Magical Camping(www.magicalcamping.co.uk). Go to www.pitchup.com/tipi-yurt-wigwam-glamping-sites formore information.

In 2010, the Camping and Caravanning Club identified Keswick, Kingsbury Water Park andScarborough as top UK caravanning destinations among its members. Keswick, Hayfieldand Eskdale were listed as top destinations for camping. The research also revealed that


the vast majority of campers were aged over 40. (www.campingandcaravanningclub.co.uk/newsandevents/infographics/uk-camping).

Hostels

Youth groups and single tourists account for two thirds of the hostel market, but families andcorporate guests are becoming increasingly important, according to a 2013 report by HVSGlobal Hospitality Services into commercial hostels. The report claimed that commercial hosteloperators are increasingly adopting hotel-style features and competing with budget hotels,while the school and group accommodation markets represent further opportunities for growth.(http://staywysetest.files.wordpress.com/2013/07/hvs-the-sharing-market-e28093-commercial-hostels-in-europe-1.pdf).

In 2013 VisitEngland predicted growth in demand for 'poshtels' or upmarket hostels, reportingthat the Youth Hostel Association (YHA) had recently invested £10 million on refurbishments,including private rooms with en-suite bathrooms, as well as bridal suites. (www.visitengland.org/media/pressreleases/2013/TRAVEL_TRENDS.aspx).

Chains such as HOAX and Safestay have emerged in recent years, exploiting what has beendescribed as a relatively underdeveloped market for low-cost, dormitory accommodation in keylocations. (www.catererandhotelkeeper.co.uk/articles/15/5/2013/348580/the-rise-of-the-luxury-hostel.htm).

Increased interest in outdoor pursuits, growth in domestic tourism and tighter budgets havealso been identified as key factors in attracting more tourists to traditional bunkhouse hostels.(www.theguardian.com/travel/2013/jun/22/rise-bunkhouse-hostel-holidays-britain).

According to a 2012 survey of travellers around the world by Hostel World, 94% of respondentswould consider staying in a hostel for a holiday, while 54% would consider spending less onaccommodation to reduce the cost of their holiday. (www.staywyse.org/2012/08/20/hostelworld-lonely-planet-travel-survey-2012).

Visitor services

Tour operators/travel agents

The ABTA Consumer Survey 2013 found that while 42% of consumers questioned had bookedan overseas holiday with an online or high-street travel agent, just 19% had booked a domesticholiday in this way.

The survey suggested that packages were the preferred booking option for overseas holidays.Of the consumers surveyed, nearly half had booked a package holiday abroad, comparedwith 18% who had booked a package holiday in the UK. For the domestic market, the mostpopular booking option was travel or accommodation only, suggesting that many domesticholidaymakers drive to their destination or stay with friends and family. (59% had booked eithertravel or accommodation only for a UK holiday, compared to 23% for overseas destinations.)

Ease of booking, saving time and saving money were the top reasons given by respondentsfor using travel professionals rather than arranging their own 'DIY' holiday. (http://abta.com/resource-zone/publication/the-consumer-holiday-trends-report-2013).


Bookings with independent travel agents rose between 2012 and 2013, according to a surveyby the Truly Independent Professional Travel Organisation (TIPTO). More than half of theindependent agents surveyed experienced an increase in sales during January and February 2013compared with the same period in 2012. Just under half expected sales to increase by around9% throughout 2013. (www.travelbulletin.co.uk/travel-polls-and-research/bookings-are-up-for-independent-agents-tipto-survey-reveals).

However, the emergence of online booking sites, together with the decline of town centres, hasthreatened traditional high-street travel agents in recent years. In the year to 31 March 2013,53 travel agencies and tour operators entered insolvency, up from 39 in the preceding year,according to chartered accountants Wilkins Kennedy. (www.wilkinskennedy.com/news-and-press/press-releases/big-jump-in-travel-agents-disappearing-from-high-street-as-internet-takes-over).

According to the most recent ONS statistics available, the number of travel agencies fell by 358to 3,847 between 2008 and 2011, while the number of tour operators rose by 73 to 1,673, overthe same period. (www.ons.gov.uk/ons/rel/abs/annual-business-survey/2011-revised-results/abs-2011r---abs-sections-a-s--june-2013-.xls, Section N).

In 2013, leading travel agent chain and package holiday specialist Thomas Cook announced plansto close 195 of its high-street outlets in a bid cut to costs and reduce its debt. The company aimsto achieve 50% of sales online by 2015. (www.travelweekly.co.uk/articles/2013/05/16/44068/no+reprieve+for+staff+after+thomas+cook+refinancing+deal.html).

The travel trade magazine 'TTG' has launched a campaign entitled 'Trust in Travel Agents' topromote the services of traditional travel agents and lobby for more support to rejuvenate highstreets.

Car hire and coach tours

The car rental market saw sales increase by 3% in 2012 to reach more than £1.2 billion, accordingto a report published in 2013 by Euromonitor. The report revealed that around three quarters ofthe market is held by the top five providers, led by Enterprise Rent-A-Car. Euromonitor predictsthat further growth will be driven by leisure rather than business use, as car ownership declinesand more people holiday in the UK. (www.euromonitor.com/car-rental-in-the-united-kingdom/report).

Currently, around 1.2% of domestic holidaymakers use a hire car as their main form of transport,rising to 2.5% among business tourists, according to the 2012 GBTS. Just over 3% of domesticholidays in 2012 involved an organised coach tour. Coach tour operator Door2Tour.co, reporteda 9% rise in coach holiday bookings in the UK between 2011 and 2012. London coach tours roseby 63% during this period, as major events, such as the 2012 London Olympic Games and theQueen's Diamond Jubilee, boosted the popularity of the 'staycation'. (www.people2places.co.uk/news/coach-tour-operator-reports-rise-in-brits-opting-for-a-staycation/3165.htm).

According to a 2013 report by Transport for London (TfL), scheduled domestic coach servicesaccounted for more than half of all coach movements in London between 2004 and 2011. Touristcoaches (catering for group visits to theatres, museums, hotels and other attractions, as wellas private hire and charter services) accounted for nearly a third of all coach movements in thecapital. TfL expects the volume of coaches operating in London to rise in coming years. TfL alsoidentified significant seasonal variations in demand for tourist coaches, driven by leisure, school


and holiday trips. The report revealed that demand was highest during spring and summer.(www.tfl.gov.uk/assets/downloads/tourist-coach-action-plan.pdf).

Tour guides/escorted tours

According to VisitBritain, a quarter of overseas tourists take an organised tour when they visitthe UK. This figure is higher among visitors to Scotland, at 36%. (www.visitbritain.org/Images/Regional%20Activities%20report%20FINAL%20COMPRESSED_tcm29-38415.pdf, page 8). Somevisitor attractions only allow tour guides holding the Institute of Tourist Guiding (ITG) BlueBadge qualification to conduct tours, and in 2012 there were around 2,000 Blue Badge holders inEngland and Wales, half of whom were based in London. Around 400 guides are registered withthe Scottish Tourist Guides Association (STGA).

An emerging niche in the tour guide market is the 'pay-what-you-want' model. This is an informalarrangement in which participants meet a guide at an advertised time, usually without booking,for a walking tour of a site or attraction, and decide how much they want to pay the guide at theend of the tour. Go to www.bowlofchalk.net and www.alternativeldn.co.uk/walking_tours.phpfor examples of pay-what-you-want tour guides in London.

Attractions and activities

Heritage tourism

According to a report by the Heritage Lottery Fund (HLF), heritage-based tourism was worthmore than £26 billion to the UK economy in 2013 - up nearly £6 billion from 2010. Thereport also revealed that 28% of the total holiday activities participated in by UK residentsincluded a visit to a heritage site or attraction. (www.hlf.org.uk/aboutus/howwework/Pages/EconomicHeritageTourism2013.aspx).

According to 2013 research by VisitBritain, close to 30% of overseas visits to Britain include tripsto built heritage sites such as castles and historic houses. In addition, a VisitBritain poll found 47%of respondents identified "interesting built heritage" as a holiday attribute they associated withthe UK, a 10% increase since the 2012 London Olympic Games.

The survey revealed that Brazilians are the nationality most likely to visit to a historic site in theUK, followed by Russian and Chinese tourists. The poll found that women were more likely to visita palace or stately home than men. Young people (aged under 24) were also more likely to visitcastles and historic houses than people from older age groups. (http://media.visitbritain.com/News-Releases/BRITAIN-S-ICONIC-BUILT-HERITAGE-IS-TOP-PRIORITY-FOR-TOURISTS-e636.aspx).

Cultural tourism

According to the Association of Leading Visitor Attractions (ALVA), the British Museum, TateModern and National Gallery attracted the most visitors in 2012, with around 5,575,000, 5,318,000and 5,163,000 visitors respectively. (www.alva.org.uk/details.cfm?p=423).

According to the Department for Culture, Media and Sport (DCMS), in August 2013, museumvisits were up 19% on the same month in 2012, while separate DCMS research found that theNorth and East Midlands regions of England showed the greatest increase in arts engagement. Asurvey of around 10,000 adults in the UK found that more than half had visited a museum or artgallery during 2012/13. Go to www.gov.uk/government/news/visits-to-national-museums-and-


galleries-reveal-increase-during-august-2013 and www.gov.uk/government/news/a-nation-of-culture-vultures for more information.

According to a 2013 report by UK Music and VisitBritain, over £2 billion was generated by musictourism in the UK during 2012, with 41% of live music audiences made up of music tourists(individuals who had travelled from another part of the UK or from a different country to attend).The report also found that domestic tourists accounted for 94% of music tourism in the UK, andLondon attracted 28% of all music tourism visits, followed by the North West of England at 17%.The report also found that stadia and arenas were preferred live music venues with 43% and 32%of music tourists respectively, followed by festivals and parks. (www.ukmusic.org/research/wish-you-were-here-2013).

Separate VisitBritain research revealed that 2.8 million overseas visitors to the UK attendedstaged performances such as theatre productions, musicals, operas or ballets in 2012, more thandouble the number who attended a live sporting event. Foreign tourists who visited the theatrespent an average of £983 during their visit to the UK, nearly £400 more than the overall averagespend by overseas visitors.

The research revealed that 55% of overseas theatre audiences were female, while 38% oftheatre-goers were aged 25 to 44. Musicals are by far the most popular choice, accountingfor 64% of attendance, followed by plays (25%), the ballet (3%), and the opera (1%). (http://media.visitbritain.com/News-Releases/THEATRE-SCORES-TOURISM-POINTS-OVER-SPORT-fcd8.aspx).

Souvenir/gift shops

According to 2013 research by VisitBritain, foreign visitors spent more than £4 billion in UKshops in 2011. More than half of this was spent on clothes, while £1.6 billion was spent onsouvenirs, gifts and household goods. The research also found that 81% of overseas touristsvisited London to shop, while between two thirds and three quarters visited shops elsewhere inthe UK. (www.visitbritain.org/mediaroom/pressreleases/shoppingisgreat.aspx).

Major events, such as the 2012 London Olympics and the birth of the Duke and Duchessof Cambridge's son in 2013, generated spikes in merchandise sales. Total sales of royalbaby souvenirs were expected to total £56 million between 1 July and 31 August 2013.(www.retailresearch.org/royalbaby2013.php). In September 2012, it was reported that revenuesfrom official Olympic merchandise were on track to exceed the organising committee's target.(www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9530430/Olympic-success-triggers-merchandise-sales-of-100m.html).

Art and jewellery sales in London's Luxury Quarter have been outperforming equivalent salesin Europe due to the significant amount tourists spend on art and jewellery items, according toonline travel news publication, Travel Daily UK. (www.traveldailymedia.com/197557/london-overtakes-europe-for-art-and-jewellery-sales).

Sports and outdoor activities

According to a 2012 Activity and Adventure Holidays report by YouGov, 52% of respondents tooka walking/rambling holiday in the UK between 2008 and 2012, while 27% enjoyed a walking/rambling holiday abroad during the same period. (www.yougov.co.uk/news/2013/09/27/market-intelligence-activity-and-adventure-holiday).


In 2012, cycling holiday specialist Freedom Treks (www.freedomtreks.co.uk) added 47 newcruise and cycle tours to its portfolio due to increased demand, while in 2013 the firm plannedto broaden its cycling holiday options with the introduction of Cruise and Cycle, and Hoteland Cycle tours. Andy Harmer of Freedom Treks said that the cycling holiday market had seenconsiderable growth in recent years and predicted that the market would continue to expand,helped in part by British cyclists' Olympic success. (www.bikebiz.com/news/read/surge-in-demand-for-cycle-holidays-reports-operator/013994).

In 2013, adventure holiday specialist, Exodus (www.exodus.co.uk) reported a 30% increase incycling holiday sales between 2012 and 2013. Sales Director Carl Burrow said: "We've noticed asteady rise in the number of people booking both 'easy' and 'moderate' graded tours, suggestingthis type of active holiday is becoming more appealing to customers of all abilities, including lessfrequent cyclists." (www.travelweekly.co.uk/articles/2013/10/16/45661/active-and-adventure-holidays-pedal-power.html).

According to a 2013 Golf Travel Insights report by KPMG, Scotland was ranked third in the worldas a golfing tourism hotspot. The report also found that 57% of golf tour operators from across38 countries experienced an increase in the number of golf trips booked between 2011 and2012, while less than a fifth of operators experienced a fall in bookings. The average length of agolfing trip was between four and seven nights. In 2012, around 40% of all bookings were groupbookings, typically for 4 to 6 people or 8 to 12 people.

The report revealed that Britons were the leading golf travellers in 2012, along with Americansand Canadians. The report also found that the price of golf holiday packages had become a moreimportant consideration for golf tourists in recent years, while the quality of the courses andrelated accommodation facilities were also key factors when booking a golfing trip. Accessibility,with the availability of direct flights to golf destinations also played an important role. Golftourists were also strongly influenced in their booking decisions by referrals and reviews onFacebook, Twitter, TripAdvisor and golf travel blogs. (https://static.golfbusinesscommunity.com/media/2/5/9/9/2599.pdf).

Wildlife and farm-based activities

According to official figures relating to farms involved in diversification in England, theproportion of diversifying farms offering tourist activities (excluding equestrian activities) fellfrom 35% in 2007 to 33% in 2010. The region with the highest concentration of diversifyingfarms involved in tourism-related activities was the South West of England, at over 40%.(www.gov.uk/government/uploads/system/uploads/attachment_data/file/226310/structure-diversification2010-02aug13.pdf).

According to a 2013 Wildlife Tourism Scotland report by research organisation TourismIntelligence Scotland, spending by tourists who visit Scotland primarily for its wildlife ishigher than average, and Scotland's wildlife was identified as a "largely untapped marketingopportunity". The top type of accommodation for wildlife visitors to Scotland was self-cateringhouses or cottages, followed by B&Bs. UK wildlife tourists were most likely to be between 45and 54 years old, and least likely to be between 16 and 24 years old. The report found thatMay and June saw the highest numbers of wildlife visitors, but pointed out that some of thekey times for wildlife activity fell outside these months and could provide opportunities toboost off-season trade. (www.scottish-enterprise.com/~/media/SE_2013/Knowledge%20Hub/Publication/09%20wildlife.pdf).


Market overview

The holidays and tourism market can be divided into three categories: inbound tourism (overseasvisitors to the UK); domestic tourism (UK tourists visiting UK destinations); and outbound tourism(UK tourists visiting destinations outside the UK).

Inbound tourism

In 2012, overseas tourists made 31.1 million visits to the UK involving an overnight stay. 86%of these visits were to England, and more than half were to London. The total number of visitsincreased from 29.8 million in 2010 to 30.8 million in 2011, and the geographical distributionof visits showed little variation across the same period, despite the hosting of the Olympic andParalympic Games in London in 2012. (www.visitbritain.org/bounce.aspx?PG=/Images/Regional%20Spread%20by%20Year%20for%20website%202012_tcm29-14614.xls).

Participating, watching or working at the Games was the primary purpose for 420,000trips to the UK by overseas tourists during July and August 2012, according to VisitBritain.(www.visitbritain.org/Images/ITTQ%20oct12_tcm29-35268.pdf, page 3).

American tourists spend more in the UK than any other nationality, although in terms of visitornumbers the USA comes third behind France and Germany, according to research publishedby Deloitte in 2013. The greatest increases in spending between 2010 and 2012 were recordedamong tourists from France, the USA, Switzerland, Kuwait and the United Arab Emirates.(www.visitbritain.org/Images/Final%20proof%2015%20Nov_tcm29-39296.pdf, pages 20 and 21).

The Deloitte report also predicted that the UK tourism industry could benefit fromattracting more affluent, older tourists from overseas, as many developed economies havean ageing population, although it notes the corresponding danger that the UK's 'greypound' could be spent in other countries. (www.visitbritain.org/Images/Final%20proof%2015%20Nov_tcm29-39296.pdf, page 50).

According to research published by the British Educational Travel Association (BETA) in 2011, theinbound youth, student and educational travel market accounts for 34% of inbound tourists, 41%of all bed nights and 36% of spend, contributing around £20 billion to the UK economy each year.(www.betauk.com/research-surveys/britains-shining-opportunity).

A separate BETA survey of overseas visitors to the UK aged between 11 and 35 found that83% planned to visit London, while the next five most popular destinations were Edinburgh(50.2%), Oxford (47.9%), Manchester (40.9%), Cambridge (38.0%) and Bath (35.6%). Go towww.betauk.com/research-surveys/great-britain-at-the-heart-of-global-youth-travel for moreinformation.

Domestic tourism

According to VisitEngland's 2012 GBTS, there was a 1% fall in the total number of trips involvingan overnight stay within Great Britain taken by British residents between 2011 and 2012,although the number of domestic business trips across this period increased by 2% (figures fordomestic trips within Northern Ireland are recorded separately; see the following paragraph fordetails). Spending across all types of overnight tourism increased on average by 6%. Of the 126million trips involving an overnight stay taken in 2012, 18.9 million were for business purposesand 57.7 million were for holidays (www.visitengland.org/Images/Headline%20summary%202012_tcm30-37312.pdf).


In Northern Ireland, nearly 2 million overnight trips were taken by Northern Irish residents in2012, a 2% decrease compared with 2011. The number of trips taken for holiday/pleasure/leisure purposes fell by 15%, although spending in this category was up by 11%. Thenumber of leisure day trips increased by 17% between 2011 and 2012 (www.detini.gov.uk/domestic_tourism_report_2012-2.pdf).

According to the ONS, expenditure by UK residents on both day trips and overnight stays withinthe UK has risen since the onset of the 2008/09 recession and subsequent economic downturn.Spending on trips within the UK including an overnight stay rose by 18% between 2008 and 2012to reach £25 billion, while spending on day trips increased by 17% from £47 billion to £57 billion.By contrast, spending on overseas travel by UK residents has failed to recover to pre-recessionlevels, suggesting that the economic crisis has led to a long-term trend towards domestictourism, or 'staycations' (www.ons.gov.uk/ons/rel/tourism/tourism-satellite-account/2010---the-economic-importance-of-tourism/sty-staycation.html).

According to Deloitte, outbound tourism is forecast to grow at just 1.5% annually to 2025, halfthe expected rate of growth for domestic tourism, suggesting that the staycation trend is likely tocontinue. (www.visitbritain.org/Images/Final%20proof%2015%20Nov_tcm29-39296.pdf, page 5).

Families took 19.9 million holiday trips within Great Britain in 2012, representing around a thirdof the total, but showing a decrease of just over 2% on the previous year. However, becausethe number of families taking domestic holidays increased by 22% between 2008 and 2009, theaverage annual increase since 2008 has been 5.1%. (www.visitengland.org/Images/GB%20Tourist%202012%20-%2030-08-2013%20-%20FV_tcm30-38527.pdf, page 35). Around 18.3 million tripswere taken by adults aged 55 or over without dependent children (empty nesters), and 10.6million by adults aged between 34 and 54 without dependent children, both showing slight fallson 2011. Adults aged under 35 with no children made the fewest holiday trips within the UK -nearly 9 million - but this was the only category to show an increase, rising by 3.6% between 2011and 2012.

Outbound tourism

The percentage of respondents to the ABTA Consumer Survey 2013 who said they took overseasholidays was 52%, compared with 56% in 2012. However, the proportion who holidayed solelyabroad increased from 11% to 13%. Sunshine was the main reason why consumers travelledoverseas.

The average number of overseas holidays taken by consumers aged between 16 and 24 was 1.5,the highest average for all age groups, followed by 25 to 34-year-olds. The average for thoseaged between 35 and 54 was less than one. (http://abta.com/resource-zone/publication/the-consumer-holiday-trends-report-2013).

ABTA's 2013 Travel Trends report found that Spain, Greece, USA, France, Cyprus, Italy and Turkeywere the top overseas holiday destinations for 2012. (www.abta.com/resource-zone/publication/travel-trends-report-2013).

UK destinations

Within England, the South West attracted the largest share of domestic tourism in 2012,accounting for 19% of trips. (www.visitengland.org/Images/GBTS%20-%20Quarterly%20Regional%20Summary%20-%20Q4%202012%20V2_tcm30-37090.pdf, page 6).


Two thirds of overseas tourists come to visit London, and just one in ten of those visit anotherpart of the country during their stay. (www.visitbritain.org/Images/Regional%20Activities%20report%20FINAL%20COMPRESSED_tcm29-38415.pdf, page 27).

The most popular activities for overseas visitors to the UK are urban-based activities such asshopping (69%), visiting famous monuments (64%) and dining out (79%), while just 20% ofholidays involve a trip to the countryside. (www.visitbritain.org/Images/Regional%20Activities%20report%20FINAL%20COMPRESSED_tcm29-38415.pdf, page 8).

According to figures from promotional organisation National Parks UK, of the 15 National Parksacross the UK, the Lake District, the Yorkshire Dales and the Peak District attract the most visitorsper year at around 15 million, 10 million and 8 million respectively. (www.nationalparks.gov.uk/learningabout/whatisanationalpark/factsandfigures).

Coastal tourism

In 2013, a report produced by the ONS concluded that, with some exceptions, larger seasidedestinations had higher levels of deprivation than the rest of England. (Christchurch, Lytham StAnnes, Poole, Worthing, Southport and Bognor Regis were noted as exceptions).

Research published in 2012 found that of the ten local authorities in Britain with the highestnumber of business insolvencies, six were seaside towns. (www.thisismoney.co.uk/money/holidays/article-2190244/Were-going-bust-seaside-The-decline-British-seaside-resorts.html).

According to research from VisitBritain, just 11% of holidays by overseas visitors in the UKbetween 2006 and 2011 involved a coastal or seaside visit. However, this figure increasedsignificantly to 48% of visits to the South West and 53% of visits to Wales. (www.visitbritain.org/Images/Regional%20Activities%20report%20FINAL%20COMPRESSED_tcm29-38415.pdf, page 8).

Research by VisitEngland shows that in 2012, 9.42 million domestic holiday trips involveda visit to a beach, around 16% of the total number of trips. Around a third of all domesticholiday trips are to seaside resorts. (www.visitengland.org/Images/GB%20Tourist%202012%20-%2030-08-2013%20-%20FV_tcm30-38527.pdf, page 49 and page 47).

In 2013, the Government announced that its Coastal Communities Fund would be increased by5% to £29 million in 2014. In 2012, six seaside projects were awarded funding. BournemouthCounty Council received £2 million to set up a National Coastal Tourism Academy (www.gov.uk/government/policies/supporting-economic-development-projects-in-coastal-and-seaside-areas--4/activity).

Scotland

In 2013, VisitScotland announced a £2.5 million marketing programme to promoteScotland in the UK and abroad to maximise the tourism opportunity presented bythe Glasgow 2014 Commonwealth Games. (www.visitscotland.org/media_centre/visitscotland_glasgow_2014.aspx).

The Perth and Kinross Golf Development Partnership (PKGDP), is set to develop golf tourism inPerth and Kinross between 2013 and 2020. The Ryder Cup 2014 at Gleneagles and the JuniorRyder Cup at Blairgowrie are also expected to result in a 28% increase in the value of golf tourismto Perth and Kinross by 2020, providing an additional £17million of expenditure to the localeconomy. (www.pkc.gov.uk/article/7068/Major-push-to-attract-more-golf-tourists-to-Perth-and-Kinross).


In 2013, the first national golf tourism strategy entitled 'Driving Forward Together' was launchedto help make Scotland 'The Home of Golf', and the world's leading golf destination by 2020. Thestrategy includes plans to co-ordinate regional golf development groups, maximise the impactand tourism opportunities from hosting major golf events, and promote sustainable golf cluband course management. (www.hie.co.uk/about-hie/news-and-media/archive/golf-tourism-strategy-targets--300m-value.html).

Wales

In 2012, the Welsh Coast Path opened, providing continuous walking access around the wholecountry. (www.ccgc.gov.uk/enjoying-the-country/wales-coast-path.aspx). Work to create anEngland Coast Path is currently in progress; go to www.naturalengland.org.uk/ourwork/access/coastalaccess/default.aspx for more information.

It is estimated that 60,000 people own holiday homes in Wales. In 2013, the Welsh Governmentannounced a consultation on allowing local authorities in Wales to levy additional council taxeson holiday homes, while plans to devolve new powers to Wales have led to warnings that theWelsh Government could raise stamp duty on these properties. (http://wales.gov.uk/about/cabinet/cabinetstatements/2013/counciltaxsecondhomes/?lang=en and www.telegraph.co.uk/news/politics/10212188/Wales-could-push-up-stamp-duty-for-60000-second-home-owners-Whitehall-warns.html).

Northern Ireland

In 2013, it was reported that Northern Ireland Secretary Theresa Villiers was considering givingthe Northern Ireland Assembly the power to set Air Passenger Duty levels on short haul flightsout of Northern Ireland. (www.abta.com/news-and-views/policy-zone/theresa-villiers-open-to-devolving-short-haul-apd-to-northern-ireland). The Republic of Ireland has already abolished itsaviation tax completely.

Visit Belfast revealed that in the 2012/13 financial year it had secured more than £27 million ofnew inbound meeting and conference events for the city, a 70% increase on the previous year.Its three-year drive to promote Belfast as a conference destination aimed to secure a combinedtotal of £80 million business bookings by March 2014. (www.nitb.com/NewsMedia/tabid/137/EntryId/849/Belfast-ups-the-ante-in-new-drive-for-%C2%A380m-city-conference-growth.aspx).In addition, the new Titanic Belfast project drew nearly 500,000 visitors to the city in 2012.(www.nitb.com/NewsMedia/LatestNews/tabid/180/EntryId/565/800-000-visitors-to-Titanic-Belfast.aspx).

Key factors affecting the market

The holidays and tourism sector is affected by a number of external factors, including thefollowing:

Seasonality

The tourism sector is subject to a high level of seasonality, with activity typically peaking in Julyand August. In 2012, the number of domestic holiday trips involving an overnight stay takenwithin Great Britain varied from 4.8 million in January to 45.4 million in August, although therewas less variation in the number of short holiday trips (one to three nights) taken across theyear - 2.7 million in January compared with a peak of 10.3 million in August. However, in 2012,


the number of domestic business trips taken within Great Britain remained fairly steady acrossthe year, varying from 1.2 million in August to 2.3 million in November. (www.visitengland.org/Images/GB%20Tourist%202012%20-%2030-08-2013%20-%20FV_tcm30-38527.pdf, pages 52 and77).

According to VisitEngland figures, firm bookings are made for around 74% of all trips involvingan overnight stay in commercial accommodation (www.visitengland.org/Images/GB%20Tourist%202012%20-%2030-08-2013%20-%20FV_tcm30-38527.pdf, page 39), and the majority ofholidays, both overseas and domestic, are booked within three months of the trip being taken.One in three domestic trips is taken within a month of booking. (www.visitengland.org/Images/Booking%20Processes%20Research_Final%20for%20website_tcm30-38819.pdf).

The UK tourism sector has been affected by unpredictable weather during the summer seasonin recent years, which could have consequences for booking patterns. Following concerns thatflooding in Wales during June 2012 could put off future visitors, the Chairman of Wales TourismAlliance commented that online booking meant that visitors were now able to wait until the lastminute to book trips. (www.bbc.co.uk/news/19047147).

Consumer spending

According to a 2013 consumer behaviour and travel survey by PricewaterhouseCoopers(PwC), the average number of holidays taken per UK customer each year increased from1.38 to 1.55 between 2011 and 2013. However, the proportion of consumers not taking anannual holiday or short break also increased from around 31% to 34% during the same period.(www.pwc.blogs.com/north/2013/11/average-number-of-holidays-taken-is-increasing-again-proportion-of-consumers.html).

Marketing and promotion

A survey of European tourists, published in 2013 by the European Commission, found that 56% ofrespondents considered the recommendations of friends, colleagues or relatives to be the mostimportant source of information when making decisions about travel plans, while 46% relied oninformation from websites. Social media platforms were the least mentioned sources. (http://ec.europa.eu/public_opinion/flash/fl_370_en.pdf, page 16).

According to the Direct Marketing Association (DMA), direct marketing generates a third of salesin the UK travel and leisure sector. (www.dma.org.uk/sites/default/files/PDF/Annual%20Reports/Annual-report-2012.pdf, page 6).

Consumers are increasingly checking online review sites when researching holidays. Accordingto a 2013 study by search engine optimisation (SEO) specialists Bright Local, 79% of consumerstrust online reviews as much as personal recommendations. (www.brightlocal.com/wp-content/uploads/2013/06/Local-Consuner-Review-Survey-20131.pdf, page 12).

According to 2012 research by Reevoo, 68% of consumers trust reviews displayed on websitesmore when they see both good and bad scores, while 30% suspect censorship or faked reviewswhen they see exclusively good reviews. The research also revealed that consumers searchingfor bad reviews are 67% more likely to make a purchase than the average consumer. Websitesdisplaying both good and bad reviews result in consumers staying longer on the site and viewingmore pages, with only 1% leaving a website after seeing one bad review. Go to www.the-entrepreneurs-club.com/wp-content/uploads/2012/05/Bad-reviews-are-good-for-business-


Reevoo.pdf and www.reevoo.com/portfolio/bad-reviews-are-good-for-business for moreinformation.

Research published by VisitScotland in 2012 into consumers' holiday purchasing behaviourfound that perceptions of 'deal-hunting' have shifted. According to the research, findingonline discounts is now considered 'savvy' rather than embarrassing, and discounting isnow "an integral part of consumer buying behaviour". (www.visitscotland.org/pdf/Insights%20OffersResearch%20(2).pdf).

In 2013, Hotwire.com surveyed 75 European hoteliers about their attitudes to offering discounts.81% said they were discounting more than they did five years ago, while three quarters said itwas damaging their brand. Nearly a third of travellers refuse to book a hotel without a discount.(www.e-tid.com/wp-content/uploads/2013/10/Hoteliers-concerned-about-the-long1.pdf).

Sources of information and support

The UK tourism industry is supported and promoted by a network of organisations, includingfour main National Tourists Boards, regional tourism agencies and local tourist informationcentres. The specific services provided by these organisations vary from area to area, but mostoffer business start up and marketing support.

The main public bodies providing support for the UK tourism sector are shown in the followingtable:


Statistical information

VisitBritain's corporate website provides regularly updated tourism statistics for the UK, includingmarket information on inbound tourism. VisitBritain also publishes a quarterly analysis of tourismtrends, along with forecasts, reports and market profiles by country on its website. The websitealso includes a market report search function and the option to sign up to a fortnightly e-newsletter.Website: www.visitbritain.org/insightsandstatistics/index.aspx

Tourism statistics are also available from the individual tourist authorities in each of the fourUK nations, which publish regularly updated research and statistics. These include figureson domestic and inbound tourism, geographical and regional data, and tourism businessconfidence.

VisitEngland


Website: www.visitengland.org

Welsh Government tourism researchWebsite: http://wales.gov.uk/topics/tourism/?lang=en

VisitScotlandWebsite: www.visitscotland.org

Northern Ireland Tourist Board (NITB)Website: www.nitb.com

Department for Culture, Media and Sport (DCMS)Website: www.gov.uk/government/organisations/department-for-culture-media-sport

Trade associations

Association of British Travel Agents (ABTA)

ABTA is the main trade body representing travel agents and other travel services in the UK.Website: www.abta.com

Association of Scotland's Self Caterers (ASSC)

The ASSC is a trade body that represents self-catering holiday property owners in Scotland.Website: www.assc.co.uk

Bed & Breakfast Association (BBA)

The BBA is a trade body representing B&Bs and guest houses in the UK.Website: www.bandbassociation.org

British Hospitality Association (BHA)

The BHA represents the hotel, restaurant and catering sectors in the UK.Website: www.bha.org.uk

British Holiday & Home Parks Association (BH&HPA)

BH&HPA is a trade body representing managers and owners of park home estates, touring andtenting parks, caravan holiday home parks, chalet parks and self-catering accommodation inGreat Britain.Website: www.bhhpa.org.uk

English Association of Self Catering Operators (EASCO)

The EASCO is a membership organisation representing owners of self-catering holidayaccommodation in England. Its members also include letting agencies and local associationsrepresenting holiday accommodation owners in particular geographic locations.Website: www.englishselfcatering.co.uk

Hotel Marketing Association (HMA)

The HMA is the official branch of the Chartered Institute of Marketing (CIM) specificallyrepresenting the hotel and hospitality sector in the UK.Website: www.hotelmarketingassociation.com

Institute of Hospitality


The Institute of Hospitality is a professional body representing managers and aspiring managersworking in the hospitality, leisure and tourism industry in the UK.Website: www.instituteofhospitality.org

National Caravan Council (NCC)

The NCC is a trade association representing the UK caravan industry, including caravan holidayhomes and park homes.Website: www.nationalcaravan.co.uk

Northern Ireland Hotels Federation (NIHF)

The NIHF is a membership organisation representing guesthouses, hotels and accommodationproviders in Northern Ireland.Website: www.nihf.co.uk

The Camping and Caravanning Club

The Club is a membership organisation providing the latest camping and caravanning news,events and safety information in the UK and Europe.Website: www.campingandcaravanningclub.co.uk

Tourism Alliance

The Tourism Alliance lobbies Government on the behalf of the UK tourism sector. It also providesthe latest sector news and access to publications covering Government policy and legal updates.Website: www.tourismalliance.com

Wales Association of Self-Catering Operators (WASCO)

WASCO is a trade body representing the self-catering tourism sector in Wales.Website: www.wasco.org.uk

Tourism Society

The Tourism Society is a membership organisation representing all sectors of the UK tourismindustry.Website: www.tourismsociety.org

Periodicals and trade journals

'Attractions Management'

This is a print and online publication providing news and information for visitor attractionoperators.Website: www.attractionsmanagement.com

'Bed & Breakfast News'

A trade journal aimed at B&B proprietors, providing sector news, views, products and adviceabout legislation.Website: www.bandbnews.co.uk

'BHA E-Zine'


This is an online fortnightly news update for the hospitality sector, published by the BritishHospitality Association (BHA), detailing the latest BHA events and sector developments.Website: www.sda-net.com/wp-content/uploads/2009/04/british-hospitality-association-e-zine.pdf

'BH&HPA Journal'

This journal is provided to members of the British Holiday & Home Parks Association (BH&HPA)and provides information about holiday park business developments and practical advice aboutpark operation.Website: www.bhhpa.org.uk/downloads/good-park-business.pdf

'Caravan'

A consumer magazine and website dedicated to caravanning, including information aboutholidays, news and reviews.Website: www.caravanmagazine.co.uk

'Caterer and Hotelkeeper'

A weekly trade journal featuring the latest news about market trends in the hospitality sector.Website: www.catererandhotelkeeper.co.uk

'Destination UK'

This is an online trade journal providing the latest news and information about tourism andvisitor attractions across the UK, as well as in-depth features about market trends and growthopportunities.Website: www.destination.uk.com

'Hospitality'

A quarterly print-based publication for managers, published by the Institute of Hospitality. Itincludes reports on innovation, business techniques, sector trends and developments from allsectors of the hospitality industry.Website: www.instituteofhospitality.org/Publications/magazine/hospitality

'Hotel Industry'

This is an online trade publication providing the latest hotel sector news and developments.Website: www.hotel-industry.co.uk

'Travel Weekly'

A weekly online and print-based publication providing travel sector news and productdevelopment.Website: www.travelweekly.co.uk/home/default.aspx

'Travel GBI'

A print-based monthly travel trade journal covering holidays and tourism in Britain and Ireland. Itfocuses on products, services and marketing activities of travel companies and organisations.Website: http://travelgbi.com


Portals, blogs, and news websites

AA Bed and Breakfast Guide

This guide provides information about more than 2,800 establishments including star-rating,room prices, facilities and family suitability.Website: www.amazon.co.uk/Breakfast-Guide-2013-Lifestyle-Guides/dp/0749573600

Accommodation Know How

This is an online resource published by VisitEngland, featuring marketing news and tips, sectorupdates and legal advice.Website: www.accommodationknowhow.co.uk

Bed and Breakfast Blog

This blog is run by Bed and Breakfast Direct and aimed at B&B proprietors and consumers.Website: www.bedandbreakfastsblog.co.uk

The Good Hotel Guide

This is an online guide providing reviews of independent hotels across the UK.Website: www.goodhotelguide.com

HIP Hotels UK

A guide to boutique and contemporary hotels in rural locations in the UK.Website: http://www.amazon.co.uk/Hip-Hotels-UK-HIP-Hotels/dp/0500286787

Hotel Marketing Blog

This blog discusses issues relating to hotel marketing.Website: www.hotelmarketingassociation.com/blog

The Independent Hostel Guide

This handbook provides a guide to independent hostels across England, Scotland and Wales.Website: www.independenthostelguide.co.uk

Travolution

This is an online resource providing news and information about travel and tourism.Website: www.travolution.co.uk

Unusual Hotels - UK and Ireland

Provides reviews of unconventional hotel locations and buildings across the UK.Website: www.amazon.co.uk/Unusual-Hotels-Ireland-Jonglez-Guides/dp/2915807523

TouristNet UK

This is an online directory for the tourism industry.Website: www.touristnetuk.com

Youth Hostels Association (YHA) news

Provides the latest news about the youth hostel sector1.Website: www.yha.org.uk/media/news


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