Short Breaks Market Assessments

Released on = April 16, 2007, 4:54 am

Press Release Author = Bharat Book Bureau

Industry = Marketing

Press Release Summary = Executive Summary

This Market Assessment report reviews the current market trends and supply side
developments for the UK short-breaks market, encompassing both domestic and overseas
short breaks.

Press Release Body =
Short Breaks Market Assessments

Executive Summary

This Market Assessment report reviews the current market trends and supply side
developments for the UK short-breaks market, encompassing both domestic and overseas
short breaks.

In the 1990s, the market for short breaks grew rapidly and outperformed the travel
and tourism market overall, making it was one of the leading sector performers for
UK travel and tourism. However, since the 1999/2000 financial year, the growth rate
for short breaks has slowed and kept broadly in line with the travel market as a
whole. Although the market share taken by short breaks overall has been relatively
stable since 1999/2000, it disguises the increasing share of short breaks in the
outbound market.

In 2001, the UK short-breaks sector declined for the first time since 1991. A number
of factors in the past few years have led to this drop in demand, including the
petrol blockades in September 2000, the difficulties experienced by the rail
transport after the Hatfield disaster in October 2000 and the foot-and-mouth
epidemic in 2001. The domestic short-breaks market has also suffered from increased
competition from outbound short breaks as a result of the increasing availability
and price-competitiveness of low-cost `no frills\' airlines.

Domestic short breaks are characterised by a high level of short breaks organised
independently and without bookings. This is also becoming a greater feature of the
independent outbound short-breaks market, which is growing at a faster rate than
packaged short breaks. The increase in the percentage of independently organised
outbound holidays is being driven by the higher growth in the number of independent
short breaks being stimulated by low-cost carriers.

The channels of distribution for short-break products are, in general, the same
channels as those used to distribute holidays to the UK market. Tour operators and
retail agents are important for outbound short breaks, whereas they only have a
marginal role in the domestic short-breaks market. Most domestic short breaks are
undertaken without booking and, of those domestic short breaks that are packaged,
around half are booked directly with the operator.

The high level of independence for domestic short breaks means that there is very
little in the way of formalised competitive structure. The formalised competitive
structure is more apparent in the outbound sector. Like outbound holidays overall,
the outbound short-breaks sector is dominated by the `big four\' vertically
integrated operators, although there are a significant number of niche independent
short-break players. One of them, Travelscene, has a significant share of the
outbound short-breaks market.

The number of short breaks taken in any year exceeds the population. Therefore, the
average number of short breaks taken by a UK resident is more than one per year, but
15% of UK adults have never taken a short break. There are few differences in the
consumer profile between domestic and outbound short-break travellers and, indeed,
there are relatively few profile differences between short-break travellers and the
UK population as a whole. There are more profile differences between the type of
short breaks taken, classified by destination in terms of an area with a
cultural/historical interest, beach, activity or lakes, mountains or countryside.
There are also significant profile differences in the type of accommodation used for
short breaks.

The impact of low-cost airlines, the ageing profile of experienced travellers and
the increasing household penetration of the Internet is encouraging independent
overseas short breaks. This is the driving force of behind the growth in the
short-breaks market. Key Note forecasts that the trend favouring outbound short
breaks will continue, whereas the growth in domestic short breaks will be relatively
low, in spite of the fact that the recent slowdown in growth has been caused by
exceptional factors.

In December 2003, MyTravel, one of the UK\'s `big four\' integrated tour operating
groups, announced the largest pre-tax loss ever made by a package holiday company of
910.9m for its financial year ending September 2003. Although much of the loss was
related to write-offs and accounting adjustments, the operating loss was still
358m, most of which was associated with package holidays for the UK market.
MyTravel\'s predicament is more severe than for the packaged holiday industry
overall, but is symptomatic of a depressed market that is moving towards
self-packaging. Irrespective of whether MyTravel survives or not, the repercussions
are bound to have some effect on consumer confidence in package holidays and give a
fillip for self-packaging. It may also, increase the proportion of short breaks
taken in relation to overall holidays.

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CBD Belapur

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