Market overview Confidence returns but incomes lag
international relations. Ukraine also threw up the least foreseen of risks to travel in the shooting down of Malaysian Airlines flight MH17 in July. The Ebola crisis threatened to break
beyond the bounds of West Africa, with the World Health Organisation (WHO) warning in October that it would take at least nine months to control the outbreak. Fluctuating media interest suggested a likely cycle of periodic scares punctuated by a lack of attention.
UXURY?
Politics and travel Less dramatic sources of potential instability lay closer to home in the form of the UK general election in May 2015 and the promise of a referendum on EU membership in the event of a Conservative victory. The former should have little direct impact on travel. But what comes out of the election might, should the government prove weak or unstable. That could adversely affect the exchange rate as well as hold up decision making, most notably on airport expansion. A referendum on Europe should also have limited direct impact on the sector.
A weak or unstable government might adversely affect the exchange rate
But the wider political and economic effects could be acute, with consequences for demand. Foreign secretary Philip Hammond described the referendum plans as having “lit a fire” under the EU, warning: “We’re setting off a process that politicians and governments do not have the power to stop.” He may well be right. A senior industry figure warned against complacency on the issue. Deirdre Wells, chief executive of UKinbound and former government head of tourism, warned: “The danger is in expecting we would suddenly become like the Swiss.”
The travel market The announcement of a £1 billion bailout of Euro Disney in October provided a sign of Europe-wide challenges in the market. Disneyland Paris remains Europe’s top tourist attraction, but annual visitors fell by more than one million between 2008 and 2014. The changing nature of the UK market
VIEW OF HOLIDAYS AS ‘ESSENTIAL’: BY AGE & SOCIAL CLASS Net % point support for holidays as essential, not luxury
trip 7% ip 11%
%
10 15 20 25 30
-10 -5 0 5
VIEW OF HOLIDAYS AS ‘ESSENTIAL’ BY AGE AND SOCIAL CLASS Net percentage point support for holidays as essential, not luxury
22% 18% 7 1 -4 -10 All 16-24 25-34 35-44 45-54 55-64 Source: TNS (October 2014) Base: 1,985 UK adults 65+ AB C1 C2DE Child
Child 0-2
3 -1 2 0 -1 2 19% 19% 13 10 5 2 -2 5 1 -2 19% 19% 15% 18 21% 16 12 23% 18% 18% 14% 8 3 -3 -9 child No
Full-time work
Retired North Midlands South London 2 1 8 3 -1 3 1 19%
16% 16% 12
22% 18% 10 7 3 10 11
was illustrated by a series of developments. The Monarch Group changed owner with London-based venture capital firm Greybull Capital taking over from the Swiss
% consider ex-UK holiday essential Holiday abroad essential Any holiday essential
27% 21%
16 | Travel Weekly Insight Annual Report 2014
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