MARKEt OUTLOOK


THE STRENGTH of demand for overseas holidays in 2023 confounded all forecasts. Consumer research for the last issue of this report found 42% of UK adults intended to take a holiday abroad in the year. The survey for this 2024 edition found 56% did so. The prior year survey results were


in line with economic forecasts at the time. In November 2022 the Treasury and Office for Budget Responsibility (OBR) were forecasting the steepest fall in UK living standards on record, with real disposable income down 4.3% in 2022-23 and predicted to fall a further 2.8% in 2023-24. Deloitte chief economist Ian Stewart noted: “The squeeze on consumers will probably be worse than after the financial crisis.” When the government reintroduced


Covid-19 testing requirements on arrivals from China in January 2023 it seemed that even some pandemic restrictions might return. Business Travel Association chief Clive Wratten denounced “a sucker punch to the industry” and “a huge step backwards for customer and corporate confidence”. The measures were subsequently


removed in March. But in the meantime,


Travel’s recovery exceeded all expectations


Outbound demand defied the economic forecasts in 2023 and there is optimism 2024 could prove equally strong


outbound travel took off. Ryanair reported record bookings in January and “no need for seat sales” as it recorded ILYHbPLOOLRQ ERRNLQJV LQ D ZHHN IRU WKH first time. Jet2 boosted its seat capacity for summer 2023 by 7% year on year. Tui UK was confident enough by April to launch its biggest-ever summer programme for 2024, adding 11 aircraft DQG PRUH WKDQ RQHbPLOOLRQ VHDWV EasyJet Holidays also added capacity. All reported strong pricing, helped


by the fact that air capacity overall remained down on the pre-pandemic level. European air navigation safety body Eurocontrol reported in October that Europe’s air traffic reached only 93% of the 2019 level in the summer, two points lower than forecast in March due to “a slight fall-off since June”. The war in Ukraine was one factor in


THERE IS a clear correlation between overseas holiday demand and economic


growth (Figure 5), but weak GDP growth appears not to have too great an impact


FIGURE 5: OUTBOUND HOLIDAYS & GDP, 2003-25 UK overseas holidays


10 20 30 40 50 60


0 -1.1% -4.8% 2003 2005 2007 2009 2011 2013 2015 2017 2019 -11% -9.9% 2021 2023 2025 *12 months to September **Office of Budget Responsibility (OBR) estimate/forecasts ONS travel and tourism data revised 2019, when outbound figures for 2009-18 re-estimated Source: ONS, OBR 41.2m 42.9m44.2m45.3m45.4m 45.5m 41.2m 41.4m42.7m41.7m43.1m 45m 48.5m 50.8m54.4m57.3m58.7m 45.6m 51m*


this. A degree of caution among network carriers such as British Airways owner IAG and the Lufthansa Group was another. But the key issue was a delay in deliveries of new aircraft, in particular at Boeing, coupled with maintenance issues on some models. This ensured overall capacity remained down after substantial numbers of older aircraft were removed during the pandemic. Capacity would almost certainly have been two or three percentage points higher without the delays and pricing a little softer. An additional factor was air traffic


7% 8.9m 2.9% 4.36m 1.8% 2.2% 2% 1.5% 1.3% 0.4% 0.8% 1.5% 2.1% 1.6% 0.9% 1.1% 0.6% 0.7% 4.3% 0.6%** 0.7%** 1.4%**


6 8


4


2 0


-4 -2


-12 -10 -8 -6


control, with a shortage of controllers leading to delays and some constraints on capacity, in particular at Gatwick, and a frequent number of strikes by controllers, most especially in France. The performance of the top-two Atol


holders, Jet2 and Tui, with about 40% of the market between them, set the tone for the sector overall. Jet2holidays reported average selling prices for the summer 11% up on 2022 and flight-only prices 18% higher. It was sufficiently emboldened to increase seat capacity for winter 2023-24 by 21% year on year and summer 2024 capacity by 12%.


8 Travel Weekly Insight Report 2024


GDP % change YoY


Holidays (million)


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60