Family holidays form a crucial part of trade sales and have held up well despite pressure on family incomes. Ian Taylor reports on data from industry analyst GfK and consumer research firm Mintel

Mintel presented a sober picture of the UK family holiday market in a report published last July.

Its Family Holidays report suggested the sector’s share of the UK holiday market – overseas and domestic – had declined to 35% from almost 39% in 2007, with the drop “driven by families cutting back on overseas trips”.

Mintel noted: “The recession and austerity have hit many families hard. Those with kids are less likely to be confident about the coming year.”

It blamed part of the decline on APD, noting: “The nature of APD, a per-passenger tax, means families are hit particularly hard.”

However, the biggest problem has been the general squeeze on family incomes. Using official figures, Mintel showed average holiday spending by families fell 41% between 2006 and 2010 (despite hitting a peak in 2008).It forecast no immediate improvement.

Mintel’s consumer research suggested many families would struggle to pay for holidays in 2012 and Mintel forecast demand in the family market would remain flat until 2017.

Data from trade analyst GfK provides a somewhat different picture, with family bookings outperforming the market last summer and in early sales for summer 2013.

GfK figures do not record the total market, but reflect a substantial proportion of trade bookings.

They show overall summer 2012 bookings broadly in line with reduced capacity. Family holidays accounted for 28% of the market.

A 6% fall in family bookings outperformed the 9% decline in sales of non-family holidays.

At the same time, revenue from family bookings was up 1% or £12 million on the previous year.

Package sales, down 7% year on year, marginally outperformed the total market, while all-inclusive bookings rose 1% – in large part reflecting family demand.

The big fall was in holidays priced below £599. There were one million fewer holidays sold in this price bracket than in 2011, a decline of 16% year on year. By contrast, sales of holidays priced more than £600 increased.

More recent GfK data maintains this picture. Figures for summer 2013 to the end of December 2012 show family bookings up 1% year on year despite a 2% decline in overall sales and a 5% fall in non-family bookings.

In January, GfK noted “an increased level of family promotional offers”. It said: “It’s hoped this [trend] will continue into the peaks period.

“In contrast, adults are either dropping out of the market or perhaps leaving bookings later.”

Evidence since the start of the year has pointed to a buoyant summer 2013 market so far.

Some families do appear to be cutting back on the time they spend away, with GfK data showing growing demand this summer for durations of seven nights and six nights or fewer.

However, bookings for the current winter show family purchases of eight to 13 nights up 7% on 2011-12 against a 2% fall for ‘non-families’ to the turn of the year.

Seven-night bookings were up 5% for families, but flat for non-family bookings.

The GfK figures give cause for optimism. However, Mintel’s report also offered reasons to be more cheery.

A Mintel consumer survey found that 68% of adult respondents “always want to go on holiday with their family”.

The same survey found three out of five agreed “the recession has meant we’ve had to cut back on family holidays” and 56% thought “overseas holidays cost too much”.

While 28% believed “the UK is better for family holidays than going abroad”, 40% agreed “package holidays are the best option for family holidays.”

Alongside these findings, Mintel noted the potential family market will grow as the number of adults with a child under 16 at home is set to rise by 1.4% by 2017 after rising 2.5% between 2007 and 2012.

The number of children in the UK should increase 4% in that period, with the number aged 14 or under rising by more than one million to 11.8 million.

That ought to see demand for holidays, so long as families can afford them