The latest UK outbound holiday figures from the Office for National Statistics (ONS) show something remarkable.
The headline figures are these: visits abroad by UK residents, seasonally adjusted, in the three months to August fell 5% compared with the three months to August 2010.
That is all trips, including business travel and visiting friends and family. Ignoring seasonal adjustments, holiday visits fell 2% over the previous 12 months to 36.4 million.
Delve a little deeper and the figures look both worse and better.
First the bad news: the number of outbound holiday trips in August – the peak holiday month – was 8% down on August 2010, and 2010 was the worst year in memory. That followed a 6% year-on-year shortfall in July after a +3% improvement on 2010 in June, suggesting the situation is deteriorating.
But here is the good news: outbound holiday travel in the eight months to August – i.e. the year to date – was flat year on year. That is a remarkable result given the shocking economic situation and collapse in UK consumer spending (a 6.4% decline across all sectors since the pre-recession period). After all, holidays are discretionary and constitute a major purchase.
It is clear there has been a deterioration in demand as the year has progressed. January began well, but ONS figures show holiday trips were 3% down on 2010 in the first quarter.April was up 13% and May 11% year on year, but this uplift was in comparison to the period of the ash crisis and BA strikes in 2010.
A June figure of +3% on a year earlier probably gives a more realistic picture of demand during the spring, yet came as consumer sentiment was faltering and the realisation that recovery was not on the way took hold.
The declines in July and August call into question the widely-held industry view that holidays have become a ‘necessity’, which certainly appears to hold for those who can afford them but cannot be considered a universal truth.
However, trips to Europe and the euro zone were down just 3% year on year in the month of August and both up 2% in the year to date. These figures are for all trips, not just holidays, but give a reasonable indication especially as business travel has held up better than leisure.
The pain is not as bad as it might seem elsewhere, either. North America was down 1% for the year to August and the rest of the world (beyond Europe and North America) down 6%.
This is not good, but not the stuff of nightmares given that UK trips to the world outside Europe and North America have declined less since 2008 (-14% in the year to date) than to anywhere else.
The ONS does not break down the monthly figures by destination, only the quarterly figures, so an examination of the trends by destination provides a snapshot of the market only up to June.
It is nonetheless revealing. Spain was a winner, as we know, up 5% year on year in the first six months – as was Greece, up 10%. Turkey was flat, but that is hardly a caning in the present situation.
The North African destinations were well down – Tunisia by 33% and Egypt by 23%. The lower proportional decline to Egypt presumably reflects the latter’s enclosed tourist area, the fact the Foreign Office never advised against travel and tour operators never stopped flying.
Morocco was down by 29%, from which we could conclude it might as well have had a revolution. Back in the euro zone, Portugal was up 31%, Malta up 7% and Cyprus up 1%.
These figures are similar for all trips, but there cannot have been a huge surge in corporate traffic although Greece may have seen more than its fair share of bean counters and asset strippers.
Somewhat counter-intuitively, given the sharp rise in Air Passenger Duty, visits to the US were 7% up year on year in the first six months of 2011 and visits to the Caribbean up 17%.
It is destinations further away – South Africa, Australia – that saw a decline. This may not continue of course: the Southern Hemisphere is attractive at Christmas. All in all it is a remarkable performance in the economic circumstances.
A market of 36 million outbound holidaymakers, which is what the UK will register this year, is not a bad baseline. There will be growth when the current depression passes, though I’m yet to be convinced the UK market will return speedily to the 45 million it attained in 2006, 2007 and 2008.
That figure was fuelled by conditions that may not return for a generation. A market lying somewhere between the current level and that high point would be sufficient to keep the UK outbound business in a leading position for many years to come and certainly no reason to adopt a hairshirt.
Just don’t bank on growth unless you intend enticing customers from a rival.