The decline of the package holiday has been exaggerated and the market remains huge although it has stagnated compared with an overall rise of 13% in overseas leisure travel since 2003.
That is the conclusion of market analyst Mintel’s latest survey of the trade, revealed exclusively by Travel Weekly.
And while package sales have not kept pace with the rise in independent travel, revenue from packages hit a record last year when income from the sale of independent holidays declined.
Mintel reports package sales stabilising around 19 million to 20 million a year since 2003, estimating total sales last year at the lower end of the scale.
But that is easily in line with the decline in capacity, with Thomas Cook chief executive Manny Fontenla-Novoa estimating 25% has been taken out by the two major groups since 2006 and Mintel forecasting there will be 20% fewer package holidays available this year than last.
Sales of independent holidays rose from 21.7 million in 2003 to 27.2 million last year, according to Mintel, leaving packages at just over 41% of the overseas holiday market – although the trade’s share is greater when its share of independent sales is included.
At the same time, the value of package sales rose from £9.6 billion in 2003 to £11 billion last year. The value of independent sales also increased, from £10.1 billion in 2003 to almost £13.2 billion in 2007, but then suffered a marginal fall last year to £13.1 billion.
So while packages account for 41% of holiday sales, they make up 46% of total revenue – up from 44.5% in 2006.
Mintel notes: “Independent travel has grown 25% over the last five years as the package market has flattened. However, the package industry still sold 3.5 million more trips last year than a decade earlier.”
It adds: “Despite the growth of single-component sales and dynamic packaging, the pre-packaged product remains the staple segment for travel agents.”