Official tourism figures tell a story that aids understanding of the current outbound market. But it isn’t the one told in the handout that accompanies the latest monthly bulletin (pdf) from the Office for National Statistics, which most of the media simply picks up and reflects.
The ONS provides inbound and outbound statistics and comparisons. It is important to note these are estimates based on the continuous International Passenger Survey conducted by the ONS, and they are subject to revision. They are also seasonally adjusted. The ONS then makes comparisons not just year on year, but between succeeding quarters.
Let’s concentrate on outbound. The ONS reports visits abroad by UK residents increased by 5% to 14.5 million in the three months to June compared with the three months to March.
Remember this is a comparison between two seasonally-adjusted estimates. We may debate its value. It also includes all visits, not just holidays.
The number of visits abroad during the 12 months to June, not seasonally adjusted, was 1% up on the previous 12 months. This might be considered a somewhat more useful comparison. However, the unadjusted figure for holiday trips in the three months to June was up 8% compared with the same three months last year, which appears unequivocally good.
Yet remember, the period April to June 2010 included the volcanic ash crisis (April), the general election (April-May) and the World Cup (June), all of which appear to have depressed outbound travel – at least, that is the view in the industry.
The monthly figures for April and May, issued in the two previous ONS bulletins, look particularly impressive.
The April figures showed outbound holiday trips from the UK up 13% year on year in the month. The May figures showed an 11% increase on the same month in 2010. By contrast, June’s figures show a 3% improvement in holiday trips but a 1% fall in all outbound journeys – not quite the picture presented by the press.
Visits to North America were down 7% year on year in the month, visits to Europe down 1% and to other destinations by 1%.
The comparison with June 2009 shows a deterioration in all outbound travel of -3%, with visits to Europe down 5% and to North America down 6% – this was the height of the recession remember. These statistics tell us outbound travel has deteriorated since then in all areas but long-haul travel other than to North America, which is up 16% on June 2009 (despite a 1% fall on June 2010).
The killer comparison, however, is with June 2008. Until April to June this year (Q2 2011), June 2008 (and Q2 2008) was the last time outbound travel showed year-on-year growth – a gap of three years.
The comparison with June 2008 shows June 2011 20% down for all outbound visits and 16% down for holiday trips. Visits to Europe were 20% down on the same month three years ago, trips to North America were down 37% and to the rest of the world 6%.
This is the size of the market that has disappeared and not returned. The ONS figures suggest a recovery from the worst period of 2010 when the ash and other factors made a bad situation worse, but they do not yet suggest a recovery beyond that. Indeed, the latest signals regarding trading suggest the opposite, which would fit the picture of a tightening squeeze on household income and continuing aversion to lending.
Quite simply, it does not matter that many people regard a holiday as essential. Those of them who don’t have the money will not travel, or not travel as often or as far or for as long.
That is the reality. The collapse of Holidays 4U is one result. The departure of Manny Fontenla-Novoa from Thomas Cook is another. There will be more.