Product coverage

Car rental; Demand factors; Health & wellness tourism; Tourism flows domestic; Tourism flows inbound; Tourism flows outbound; Tourism receipts and expenditure; Tourist attractions; Transportation; Travel accommodation; Travel retail

Executive summary

Internet Competition Drives Consolidation

2006 was a year of major changes for the travel and tourism industry in the UK. Competition is fierce, quality has improved, while increasing margins is a constant battle in the industry.

The major companies are looking for whom to buy next, with leading companies very eager to regain the place eroded by the new on-line competitors, and with most of the leaders being successful in this task. When it became clear that on-line travel agencies were here to stay, and that to gain market share simply updating technology would have taken too long, the acquisitions started. The big fishes started eating the small fishes, and when this did not suffice, the mergers of leading companies took place. A clear example of this trend was First Choice, which made 13 acquisitions in 2006, and at the end of the year merged with TUI to become TUI Travel.

Open Skies Agreement to Increase Competition in Long Haul Flights

In 2006, four companies, American Airlines, British Airways, Virgin Atlantic and United, held around 40% of London's Heathrow Airport transatlantic traffic. The new open skies agreement is about to change that. The British parliament has placed a restriction on when the deal can come into effect, which should happen in 2008, after the new wing of the Heathrow terminal is finished. The impact on the four companies will thus be minimised, but the low fare airlines are keen to start the process sooner and be able to expand their bases at Heathrow.

Balance of Payments to Become Even More Negative

The overall increase in wealth due to the stability of the UK economy has positively affected all areas of the tourism industry. However, major changes in the world travel and tourism industry, following the inception of the concept of low fare airlines that are extending now their wings to further destinations bring on a steep competition to the domestic market. The increase of disposable income therefore will benefit especially departures to foreign destinations and, as a result, the British balance of payments should become ever more negative by 2012.

Car Rental: More Service to Face Tougher Competition

Increasing competition in car rental is leading some players to extend their opening hours, especially those near or in airport terminals, to guarantee that customers will always be able to pick up their rental cars regardless of the time at which they arrive at the airport. It is now quite usual for leading companies to have a 24-hour open location at major airports in the UK, and where such a service is not available the customer is given a password to collect keys from safes at a specific location. The proportion of business travellers at airport locations is much higher than at other sites. These locations are less vulnerable to seasonality, and were less affected by the aftermath of the London bombings in 2005.

Hotels Managed Rather Than Owned

One of the key trends in hotels is the sale and management back of hotels. In 2006, several chains of hotels sold their assets to investment companies and banks, opting for managing the same hotels. The main attraction of this type of contract is that the operator is free from fixed asset expenditures, such as land tax, stamp duty or other fixed costs triggered by the asset owned.

TRAVEL AND TOURISM IN THE UNITED KINGDOM : MARKET INSIGHT

EXECUTIVE SUMMARY

Internet Competition Drives Consolidation

Open Skies Agreement to Increase Competition in Long Haul Flights

Balance of Payments to Become Even More Negative

Car Rental: More Service to Face Tougher Competition

Hotels Managed Rather Than Owned

KEY TRENDS AND DEVELOPMENTS

Economic Drivers

Legislative Environment

Government Tourism Policy and Sustainable Tourism

Consumer Lifestyles

Low-cost Carrier Development

Emerging Niches

Internet Developments

TERRORISM AND SECURITY

LEAVE ENTITLEMENT

CONSUMER DEMOGRAPHICS

BALANCE OF PAYMENTS

MARKET INDICATORS

Table 1 Leave Entitlement: Volume 2005/2006

Table 2 Holiday Demographic Trends 2001-2006

Table 3 Holiday Takers by Sex 2001-2006

Table 4 Holiday Takers by Age 2001-2006

Table 5 Length of Domestic Trip: 2001-2006

Table 6 Length of Outbound Departure: 2001-2006

Table 7 Seasonality of Trips 2005/2006

MARKET DATA

Table 8 Balance of Tourism Payments: Value 2001-2006

DEFINITIONS

Tourism Parameters

Travel Accommodation

Transportation

Car Rental

Travel Retail

Tourist Attractions

Health and Wellness

Internet Sales

Internet Sales: Dynamic Packaging

Internet Sales: Traditional Package Holiday

Sustainable Tourism

Sources

Summary 1 Research Sources

LOCAL COMPANY PROFILES - UNITED KINGDOM

AVIS EUROPE PLC - TRAVEL AND TOURISM - UNITED KINGDOM

STRATEGIC DIRECTION

KEY FACTS

Summary 2 Avis Europe Plc: Key Facts

Summary 3 Avis Europe Plc: Operational Indicators 2004-2006

COMPANY BACKGROUND

COMPETITIVE POSITIONING

Summary 4 Avis Europe Plc: Competitive Position 2006

BRITISH AIRWAYS PLC - TRAVEL AND TOURISM - UNITED KINGDOM

STRATEGIC DIRECTION

KEY FACTS

Summary 5 British Airways: Key Facts

Summary 6 British Airways: Operational Indicators 2005-2007

COMPANY BACKGROUND

COMPETITIVE POSITIONING

Summary 7 British Airways: Competitive Position 2006

FIRST CHOICE HOLIDAYS PLC - TRAVEL AND TOURISM - UNITED KINGDOM

STRATEGIC DIRECTION

KEY FACTS

Summary 8 First Choice Holidays Plc: Key Facts

Summary 9 First Choice Holidays Plc: Operational Indicators 2004-2006

COMPANY BACKGROUND

COMPETITIVE POSITIONING

Summary 10 First Choice Holidays Plc: Competitive Position 2006

INTERCONTINENTAL HOTELS GROUP PLC - TRAVEL AND TOURISM - UNITED KINGDOM

STRATEGIC DIRECTION

KEY FACTS

Summary 11 InterContinental Hotels Group Plc: Key Facts

Summary 12 InterContinental Hotels Group Plc: Operational Indicators 2004-2006

COMPANY BACKGROUND

COMPETITIVE POSITIONING

Summary 13 InterContinental Hotels Group Plc: Competitive Position 2006

THOMAS COOK GROUP PLC - TRAVEL AND TOURISM - UNITED KINGDOM

STRATEGIC DIRECTION

KEY FACTS

Summary 14 Thomas Cook Group Plc: Key Facts

Summary 15 Thomas Cook UK: Operational Indicators 2004-2006

COMPANY BACKGROUND

COMPETITIVE POSITIONING

Summary 16 Thomas Cook UK: Competitive Position 2006

TOURISM FLOWS INBOUND IN THE UNITED KINGDOM

HEADLINES

TRENDS

COUNTRY OF ORIGIN

INBOUND DEMOGRAPHIC PROFILE

MODE OF TRANSPORT

PURPOSE OF VISIT

INCOMING TOURIST RECEIPTS BY COUNTRY

PROSPECTS

SECTOR DATA

Table 9 Arrivals by Country of Origin: 2001-2006

Table 10 Arrivals by Purpose of Visit: 2001-2006

Table 11 Leisure Arrivals by Type 2005-2006

Table 12 Business Arrivals: MICE Penetration 2005-2006

Table 13 Arrivals by Method of Transport: 2001-2006

Table 14 Incoming Tourist Receipts by Country 2001-2006

Table 15 Tourism Expenditure by Sector: Value 2001-2006

Table 16 Method of Payments for Incoming Tourist Receipts: % Breakdown 2005/2006

Table 17 Forecast Arrivals: 2006-2011

Table 18 Forecast Incoming Tourism Receipts: 2006-2011

TOURISM FLOWS OUTBOUND IN THE UNITED KINGDOM

HEADLINES

DESTINATIONS

MODE OF TRANSPORT

PURPOSE OF VISIT

OUTBOUND DEMOGRAPHIC PROFILE

OUTGOING TOURIST RECEIPTS BY COUNTRY

PROSPECTS

SECTOR DATA

Table 19 Departures by Destination: 2001-2006

Table 20 Leisure Departures by Type 2005-2006

Table 21 Business Departures: MICE Penetration % Breakdown 2005-2006

Table 22 Departures by Mode of Transport: 2001-2006

Table 23 Departures by Purpose of Visit: 2001-2006

Table 24 Outgoing Tourist Expenditure by Sector: Value 2001-2006

Table 25 Method of Payments for Outgoing Tourism Spending: % Breakdown 2006

Table 26 Forecast Departures: 2006-2011

Table 27 Forecast Outgoing Tourism Expenditure: 2006-2011

Table 28 Departures to Other Major Destination Countries 1999-2005

Table 29 Departures to Other Major Destination Countries 2006-2011

Table 30 Departures to New Zealand 1999-2005

Table 31 Departures to New Zealand 2006-2011

TOURISM FLOWS DOMESTIC IN THE UNITED KINGDOM

HEADLINES

TRENDS

DESTINATIONS

MODE OF TRANSPORT

PURPOSE OF VISIT

DOMESTIC TOURISM RECEIPTS

PROSPECTS

SECTOR DATA

Table 32 Domestic Tourist Expenditure: 2001-2006

Table 33 Expenditure per Domestic Trip: 2001-2006

Table 34 Domestic Trips by Destination: 2001-2006

Table 35 Domestic Trips by Purpose of Visit: 2001-2006

Table 36 Method of Payments for Domestic Tourism Spending: % Breakdown 2005/2006

Table 37 Forecast Domestic Tourism: 2006-2011

Table 38 Forecast Domestic Tourist Expenditure: 2006-2011

TRAVEL ACCOMMODATION IN THE UNITED KINGDOM

HEADLINES

TRENDS

HOTELS

COMPETITIVE LANDSCAPE

PROSPECTS

SECTOR DATA

Table 39 Travel Accommodation Sales by Sector: Value 2001-2006

Table 40 Travel Accommodation by Sector: Units 2001-2006

Table 41 Regional Hotel Parameters 2006

Table 42 Travel Accommodation Internet Sales by Direct Suppliers and Intermediaries: Internet Transaction Value 2001-2006

Table 43 Hotel National Brand Owners by Key Performance Indicators 2006

Table 44 Hotel National Brand Owners by Market Share 2002-2006

Table 45 Forecast Travel Accommodation Sales by Sector: Value 2006-2011

Table 46 Forecast Travel Accommodation by Sector: Units 2006-2011

Table 47 Forecast Travel Accommodation Internet Sales by Direct Suppliers and Intermediaries: Internet Transaction Value 2006-2011

TRANSPORTATION IN THE UNITED KINGDOM

HEADLINES

TRENDS

AIRLINES

PRIVATE JETS

COMPETITIVE LANDSCAPE

PROSPECTS

SECTOR DATA

Table 48 Transportation Sales by Sector: Value 2001-2006

Table 49 Airline Capacity: 2001-2006

Table 50 Airline Utilisation: 2001-2006

Table 51 Airline % Utilisation 2001-2006

Table 52 Airline Volume Sales by Seat Class: % Breakdown: 2001-2006

Table 53 Airline Volume Sales by Distance: % Breakdown: 2001-2006

Table 54 Transportation Internet Sales by Direct Suppliers and Intermediaries: Internet Transaction Value 2001-2006

Table 55 Airlines Key Performance Indicators 2006

Table 56 Airline Market Shares 2002-2006

Table 57 Forecast Transportation Sales by Sector: Value 2006-2011

Table 58 Forecast Transportation Internet Sales by Sector: Internet Transaction Value 2006-2011

CAR RENTAL IN THE UNITED KINGDOM

HEADLINES

TRENDS

COMPETITIVE LANDSCAPE

PROSPECTS

SECTOR DATA

Table 59 Car Rental Sales by Sector and Location: Value 2001-2006

Table 60 Structure of Car Rental Market: 2001-2006

Table 61 Average Car Rental Duration by Sector 2004-2006

Table 62 Average Car Rental Duration: % Breakdown 2005/2006

Table 63 Time of Booking: % Breakdown 2005/2006

Table 64 Car Rental Internet Sales by Direct Suppliers and Intermediaries: Internet Transaction Value 2001-2006

Table 65 Car Rental Companies' Key Performance Indicators 2006

Table 66 Car Rental Market Shares 2002-2006

Table 67 Forecast Car Rental Sales by Sector: Value 2006-2011

Table 68 Forecast Car Rental Internet Sales by Sector: Internet Transaction Value 2006-2011

TRAVEL RETAIL IN THE UNITED KINGDOM

HEADLINES

TRENDS

GROWTH SECTORS

COMPETITIVE LANDSCAPE

PROSPECTS

SECTOR DATA

Table 69 Travel Retail Outlets by Sector: Units 2001-2006

Table 70 Travel Retail Sales by Product: Value 2001-2006

Table 71 Travel Retail Sales by Destination: % Value Breakdown 2001-2006

Table 72 Travel Retail Internet Sales by Direct Suppliers and Intermediaries: Internet Transaction Value 2001-2006

Table 73 Travel Retail Internet Sales by Sector: Internet Transaction Value 2001-2006

Table 74 Key Travel Retail Companies by Number of Outlets 2006

Table 75 Travel Retail Products Market Shares 2002-2006

Table 76 Forecast Travel Retail Outlets by Sector: Units 2006-2011

Table 77 Forecast Travel Retail Sales by Product: Value 2006-2011

Table 78 Forecast Travel Retail Internet Sales by Direct Suppliers and Intermediaries: Internet Transaction Value 2001-2006

TOURIST ATTRACTIONS IN THE UNITED KINGDOM

HEADLINES

TRENDS

COMPETITIVE LANDSCAPE

PROSPECTS

SECTOR DATA

Table 79 Tourist Attractions by Sector: Value 2001-2006

Table 80 Tourist Attractions by Sector: 2001-2006

Table 81 Tourist Attractions Internet Sales by Direct Suppliers and Intermediaries: Internet Transaction Value 2001-2006

Table 82 Leading Tourist Attractions by Visitors 2001-2006

Table 83 Forecast Tourist Attractions by Sector: Value 2006-2011

Table 84 Forecast Tourist Attractions by Sector: 2006-2011

Table 85 Forecast Tourist Attractions Internet Transaction Value Sales by Sector: Internet Transaction Value 2006-2011

HEALTH & WELLNESS TOURISM IN THE UNITED KINGDOM

HEADLINES

TRENDS

PROSPECTS

SECTOR DATA

Table 86 Number of Hotel/Resort Spas: Units 2001-2006

Table 87 Spa Sales by Type: Value 2001-2006

Table 88 Spa Consumer Markets: Domestic Tourism 2005-2006

Table 89 Spa Consumer Markets: Arrivals 2005-2006