Outbound


Consumers ‘gravitate to value’ but ‘protect their holidays’ FIGURE 60:


Demand in the UK outbound market was the strongest in Europe in 2023 and showed no sign of flagging going into 2024


OUTBOUND BOOKINGS in 2023 trumped even the most optimistic forecast and appeared to roll into 2024 despite concerns about the strength of the UK economy and the impact on household spending of the highest interest rate since 2008. The strong demand led Atol holders


to seek licences for 31.6 million package customers in the 12 months to September 2024, 20% up on the previous year. Jet2 overtook Tui as the largest Atol


holder, adding 7% capacity year on year for summer 2023. It reported selling bPLOOLRQ SDFNDJHV LQ WKH VL[ PRQWKV


to September, 15% up on the previous year and 71% of its total passenger numbers, with the average package selling price up 11% on summer 2022. Jet2 increased its seat capacity a further 21% year on year for winter 2023-24


The Deloitte view


With many businesses returning to or surpassing pre-pandemic passenger volumes, 2023 saw a strong recovery in outbound travel. Net spending in the leisure sector


improved for a third consecutive quarter, according to the Q3 2023 Deloitte Consumer Tracker and the travel industry reaped the rewards of a busy summer as pent-up demand fuelled spending. Despite continued pressures on


consumer budgets, outbound travel demand is forecast to remain robust in 2024 as consumers prioritise travel over other spending. However, in an effort to control spending, there is evidence of consumers reducing the number of days away and choosing to travel during shoulder seasons, between the peak and off-season, to


get better deals. Predicting traveller demand and matching it with product supply will be a key challenge in 2024. There has been no progress with


regulatory reform since the last Insight report a year ago, causing some uncertainty for the industry. Although there will be further consultation and time for implementation, any changes will likely lead to additional compliance costs. In 2024, businesses should focus on:


Q Growth: It’s worth considering whether the growth trend will continue. Once post-pandemic savings are depleted and the backlog of pre-Covid planned holidays is exhausted, will demand change? It will be important to keep an eye on the traditional summer holiday sector as capacity planning seems to assume that the industry will not


be affected by the cost-of-living crisis. Q Generative AI: We are all aware of the


anticipated impact of generative AI and the disruption it is predicted to cause. While we consider the key impacts remain a number of years away, it will be interesting to see how businesses in the travel sector


explore generative AI use cases this year. Q Mergers and acquisitions (M&A): There have been delays in transactions, especially involving businesses backed by private equity, during the recovery process in 2023. But 2024 could be intriguing in this regard. Management teams may need to allocate time and resources to


prepare for potential M&A activity. Q Tim Robinson, director, Audit and Assurance, and Danielle Rawson, director, CFO Advisory


HOLIDAYS BY REGION 2019


UK OUTBOUND 13% 5% 6% 58.7m 76%


outbound holidays


and 12% for summer 2024. In half-year UHVXOWV FKLHI H[HFXWLYH 6WHYH +HDS\ noted the attraction of the package product “for price-conscious customers”. Tui reported passenger numbers


2022-23 12%


4% 7% 46m*


outbound holidays


EU N America


77%


up 14% year on year in its Northern Region, dominated by the UK, in the 12 months to September. The group UHSRUWHG D € bELOOLRQ RSHUDWLQJ SURILW from full-year revenue of €20.7 billion, up 25% year on year, and Tui chief H[HFXWLYH 6HEDVWLDQ (EHO IRUHFDVW JURXS revenue would rise at least 10% in 2024, ەHUDKV SOHGJLQJ WR “H[SDQG RXU PDUNHW In the UK, Tui sought to increase


sales via independent agents while also launching a dynamic packaging platform offering accommodation and flights beyond its own. (EHO DFFXVHG WKH PHGLD RI


Non-EU Europe Rest of world


*2022 outbound holidays total Source: ONS


ZLOGILUHV LQ 5KRGHV LQ ەJQLWDUHJJD[H“ July which gave a taste of what lies in store as temperatures rise, but he said the group would offer fire insurance in IXWXUH +H UHMHFWHG D VXJJHVWLRQ WKDW holidaymakers might be less attracted to the Mediterranean in peak summer because of the increasing heat yet acknowledged: “There will be changes. The season will start earlier and end


48 Travel Weekly Insight Report 2024


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