Tourism Trends
David EdwardsTourism Trends Manager
June 2008
The £85.6bn pie
Spending by overseas residents during visit to UK
19%
Spending by overseas residents on fares to UK carriers
3%
Spending by domestic residents on trips of 1+ nights
24%
Spending by domestic residents on tourism day trips for leisure
53%
Rent for second ownership1%
Global picture – share of international arrivals in 2007
Europe53%
Asia and the Pacific21%
Americas16%
Africa5%
Middle East5%
4 in 5 are intra-Europe
trips9 in 10
are intra-AP
trips
UK’s global market share of international tourism
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
6.5%
7.0%
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
International Tourist Arrivals
International Tourism Receipts, US$bn
Source: UNWTO, VisitBritain
6th most visited destination and earner
from international tourism
Trends in inbound and outbound tourism
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
60,000
65,000
70,000
75,000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Thou
sand
s
Inbound
Outbound
1991 – Gulf War
1994 – Channel Tunnel
1997 – Asia finance crisis
2001 – FMD and 9/11
2003 – Gulf War/SARS
2004 – EU expands
The UK’s International Tourism Balance of Payments
-20,000
-16,000
-12,000
-8,000
-4,000
-
4,00019
79
1983
1987
1991
1995
1999
2003
2007
Inbo
und
spen
d le
ss o
utbo
und
spen
d, £
m 2
007
price
s
Contrasting trends in number of inbound visits 2000-07+1.3 million from Spain
+1.1 million from Poland
+900,000 from Ireland
+640,000 from Italy
+630,000 from Germany-510,000 from USA
-243,000 from Japan
-79,000 from Israel
-62,000 from Greece
-43,000 from Hong Kong
Shorter length of stay drives down spend per visit
7.5
8.0
8.5
9.0
9.5
10.0
10.5
11.0
11.5
12.0
12.5
19
79
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
Nig
hts
pe
r V
isit
450
500
550
600
650
700
750
800
850
900
Sp
en
d p
er
Vis
it (£
s, 2
00
7 p
rice
s)
Nights per visit Real Spend per Visit
43% inbound visits are 1-3
nights
Outbound length of stay
down from13.3 to 10.0
Inbound visits to the UK by region of the world
-15%
-5%
5%
15%
25%
35%
45%
55%
65%
Jan-00
May-00
Sep-00
Jan-01
May-01
Sep-01
Jan-02
May-02
Sep-02
Jan-03
May-03
Sep-03
Jan-04
May-04
Sep-04
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
Rolling 12 Month Period Ending
Annu
al C
hang
e
North America EU15 A12 Rest of Europe Rest of World
Forecast for 2008:
Volume +2.0%
Value +1.4%
Regional spread challenge: inbound shares
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
London
South East
South West
East of England
West Midlands
East Midlands
Yorkshire
North West
North East
Wales
Scotland
Northern Ireland
Trips Spend
Over the past few years...
• UK population is more diverse (550,000 A12 nationals live in the UK)
• More UK residents own a second home abroad (around 250,000)
• More Brits live permanently abroad (IPPR estimate is 5.6 million)
• More foreign students study at UK universities (49,000 entered in 2007)
• More UK based multi-nationals• Competition for holiday visitors is more intense
(Krakow, Dubai, Marrakech)
Leading to a shift in the ‘purpose mix’ of inbound trips
Holiday45%
Business19%
Miscellaneous18%
Visiting Friends/Relatives18%
1979…2007
Business27%
Visiting Friends/Relatives30%
Miscellaneous11%
Holiday33%
Relative contribution to growth in visits, 1993-2007
-5% 0% 5% 10% 15% 20% 25%
Holiday
Business
VFR
Study
Other
Long-haul emerging Long-haul mature Short-haul emerging Short-haul mature
Short-haul mature 58% Holiday 16%
Short-haul emerging 21% Business 32%
Long-haul mature 13% VFR 42%
Long-haul emerging 8% Study/other 10%
Visiting Friends and Relatives trips – do they really matter?
• 23% of inbound spend in 2007 (+138% ‘real’ growth since 1979: 18% ‘holiday’ growth)
• Regional spread: 60% of VFR spend is outside London, 40% for holiday visits
• Seasonality: 49% of VFR visits between October and March, 38% of holiday visits
• 1.8m visits to museums/galleries, 2.6m visits to a castle, church or historic house
• 8 million nights in paid accommodation• Hosts spend too!
Outbound versus domestic
• Brits took 123 million domestic overnight trips in 2007 compared to 70 million outbound trips
• But spent £172 per domestic overnight trip and £507 per outbound trip
• Meaning that we spent £21bn on domestic trips and £35bn on outbound
• For every £1 spent on a domestic overnight holiday, we spent £2.11 on outbound holidays
Domestic overnight trends
123.0
124.0
125.0
126.0
127.0
128.0
129.0
130.0
131.0
Ap
r-06
May
-06
Jun
-06
Jul-
06
Au
g-0
6
Se
p-0
6
Oct
-06
Nov
-06
Dec
-06
Jan
-07
Fe
b-0
7
Mar
-07
Ap
r-07
May
-07
Jun
-07
Jul-
07
Au
g-0
7
Se
p-0
7
Oct
-07
Nov
-07
Dec
-07
Jan
-08
Fe
b-0
8
Rolling twelve months ending
Trip
s (m
illio
ns)
20,000
20,300
20,600
20,900
21,200
21,500
21,800
Exp
endi
ture
(£m
illio
ns)
Trips (m) Spend (£m)
Regional spread challenge: domestic overnight shares
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%
London
South East
South West
East of England
West Midlands
East Midlands
Yorkshire
North West
North East
Wales
Scotland
Northern Ireland
Trips Spend
In 1996 32% trips were to a large city, by 2007 it was 39%
Seaside destinations accounted for 25% of trips in 1996 now just
21%
What we do well (inbound visitors)• Britain perceived as a world leader
(Ranked 3rd in NBI behind France and Italy)
• Potential holiday visitors express desire to experience our heritage and culture
• Among the most popular activities undertaken by holiday visitors
• In an increasingly competitive market vital to build on USPs, not rely solely on tactical use of ‘fashion’
• But heritage and culture must be presented imaginatively
What we do well (domestic visitors)• Key strengths (attributes rated highly and
strongly correlated with customer retention and destination choice)
• Wide variety of accommodation• Opportunities to visit museums, galleries and
contemporary arts• Opportunities to visit famous buildings and
monuments• Interesting cities, towns and villages to visit
What we do less well
• Expectations of ‘welcome’ are poor (UK ranked 16th by NBI, Canada top)
• ‘availability of good restaurants and fine dining’ seen as a weakness by Brits
• But key issue is ‘Value for money’: an attribute strongly correlated with visitor retention and destination choice
• Weather…
How Britons describe a holiday in Britain
0% 5% 10% 15% 20% 25% 30% 35% 40%
Romantic
Depressing
Exciting
Boring
Predictable
Fascinating
Unpleasant
Risky
% choosing each adjective
53% choose negative adjective
Socio-demographic challenges and opportunities• Older age groups more important in relative terms (1
in 6 Brits over 65)• Population set to grow by 7 million by 2031• Domestic overnight tourism highly dependent on
higher social grades (ABs account for 39% of spend but 20% of population, DEs 14% spend, 31% population)
• The ‘family unit’ is evolving
The economy
• Downturn may be worse than expected• Inflation as much a threat as the ‘credit crunch’• Average household paying £15 more per week for
groceries than this time last year• Airlines feeling the pinch• Is this an opportunity for domestic tourism?
Leisure time choices – a cluttered marketplace • Internet surfing (61% of households have
access, of which 84% broadband)• Cinema (157 million admissions in 2006)• Shopping• iPods, DVDs, TV channel hopping • DIY/gardening (17 mins per person per day)• Hobbies• Driving the kids to their leisure activities• Tourism activity
Challenge of the more demanding and unpredictable consumer
• ‘what you do’ more important than ‘where you do it’: ‘experiences’ not ‘destinations’ count
• Authenticity: travel-savvy visitors expect more than earlier generations
• Fly in on Ryanair, stay in a Hilton, grab lunch in McDonalds: no neat segments
Short-term risks and opportunities
• Exchange rate fluctuations• ‘Open Skies’• Eurostar to St Pancras• Liverpool08• Avian flu, Blue tongue…• West Coast Main Line improvements
The future (1)
• Economic cycles will ensure good years and bad years but…
• …has the era of rising discretionary spending power and falling travel costs ended?
• New global hubs for business set to challenge London (Mumbai, Shanghai)
• Socio-demographic change will impact why we travel and who we travel with
The future (2)• Geo-politics matters (China won’t have a
significant balance of payments deficit)• Fashions will come and go• Technology will alter how we research, book,
experience and recount travel• Climate change will shape government, business and
consumer behaviour• Competition for the tourist $, and potential tourists’
attention will intensify• There will always be ‘shocks’
To find out more…
www.visitbritain.com/research