Over the past year the credit card crunch has seen the nation tighten its belt and feel the squeeze. The prosperous era of ’splashing out’ has come to an abrupt end and given way to feelings of thrift and frugality that have led us all to keep a beady eye on the balance sheet.
The finer things in life are therefore being cut out as we all endeavour to weather this storm as painlessly as possible. This has had a huge impact on the UK travel industry which is expected to contract by 8.9% this year.
As Carroll Rheem, Director of PhoCusWright, has stated: ‘British travellers have had to cope with currency devaluation on top of the recession, and both have driven significant changes in travel patterns.’ This article investigates these emerging trends with relation to travel to Europe in 2009/10 and goes some way to providing an outlook for the future.
Fewer people are expected to travel this year but us Brits love a bargain and, rather than giving up our travels entirely, most of us are on the lookout for good value and special deals. In fact, in mature markets such as the UK and Germany, the percentage growth of Google travel searches for 2008/9 matched growth for 2007/8. Andrew Pozniak, Google Head of Travel Europe, Middle East, and Africa, surmised that: ‘Activity rates have increased solidly, but conversion rates have been tougher.
This shows appetite (for travel) has not been dimmed by the recession.’ Conversely, the recession has highlighted the importance that Brits place on travel over other activities. The Travel Nation report carried out by Eurostar in April 2009 concluded that Brits prioritise holidays as the most important of all luxuries, above eating out, buying new clothes and entertainment. According to their survey, over a third of adults (36%) would happily not eat out in restaurants for an entire year and nearly one third (29%) would rather not buy any new clothes for an entire year than miss out on their holiday.
So although we are unwilling to forgo our precious annual holiday(s), we are nonetheless looking to travel in cheaper, more cost effective ways. Through the internet we are able compare and contrast vast quantities of information to find the best deals at websites such as travelsupermarket.com (flights, hotels, car hire, insurance, holiday packages,) and The Currency Exchange Site (http://www.currencyexchange-uk.co.uk/) (foreign exchange). For this reason the online travel market has grown steadily over the past five years and is now worth 60 billion Euros. In contrast, the offline travel market has seen a steady decrease in sales with a CAGR of -0.6% for 2002-2008 (European Online Travel Report 3 by Eye). Package holidays have also been popular during the economic crisis as people are looking for security and prefer to know exactly how much their holiday is going to cost from the outset. Another trend that has emerged is the rise of the ’soliday’ - many people are resorting to travelling alone as friends and family struggle to fund holidays. According to ebookers.com, nearly 15% of holidaymakers took ’solidays’ in the past year due to friends and family being unable to fund travel plans as a result of the recession. The most popular locations for solo travelling include Europe (34%), India (14%) and Africa (11%). Ben Reynolds, Head of Marketing at ebookers.com said: ‘The recession is changing the way we travel, with people looking at new ways to ensure they can still jet off on a break this year. The soliday seems to be emerging as a trend for people who can still afford a break.’
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