Holiday companies face a brighter future, but the recession has changed people’s travel and booking habits, finds new research.
A Butlin’s Redcoat, the actor James Nesbitt and an ogre may not have much in common but they are all characters trying to sell holidays on TV this January, one of the busiest months of the year for booking breaks away.
Since 2008, the travel industry has had a rocky ride but there are signs that things are getting steadier, with TUI Travel, owner of Thomson and First Choice, announcing a pre-tax profit of £473m, up 21 per cent for the 12 months to 30 September. Meanwhile, rival Thomas Cook’s pre-tax profit for the same period rose to £263m, 49 per cent up on last year’s figure.
But while the going may be less choppy with 34 million British consumers taking holidays every year, how people shop for breaks is changing and travel brands must take these trends on board to target the modern holidaymaker effectively, according to new research by Kantar Media TGI.
“When the recession hit in 2008, this industry was decimated,” explains Anne Benoist, director at Kantar Media TGI. “So many companies went under or had to merge. We’re now emerging from that but it feels like the landscape has changed, as have the kinds of people and their holiday habits over that time. We’ve all been through the economic mill.”
The research polled 25,000 adults aged 15 and over who have taken a holiday in the past 12 months, and has identified five distinct groups of British holidaymakers.
“Pro-active planners” make up 8.7 million people, the largest of the groups, spending the most on holidays. While this group broadly reflects the population as a whole, they tend to be slightly older, with grown up children – empty nesters for example – on comfortable incomes.
Going on holiday is hotly anticipated by this group and the planning process is part of the experience. Pro-active planners are 52 per cent more likely than the average adult who goes on holiday to book eight or nine months before departure, according to the research.
“Companies need to bear in mind how far in advance these people book,” says Benoist. “There’s not much point hitting them in June for a summer holiday because they’ll have booked it back in January.”
These people are 74 per cent more likely to use a travel agent or tour operator as a source of information when planning their holiday and 38 per cent more likely to look at brochures when researching their trip.
“When it comes to booking, they tend to rely on more conventional means – going into a travel agent and flicking through brochures, rather than doing everything online,” she says.
Meanwhile, 7.1 million consumers are ‘experience enthusiasts’. This group is particularly likely to be middle aged with few family ties. The second largest group, they are also the second highest spenders among British holidaymakers.
Consumers in this bracket are not interested in sitting by the pool or on a beach; they want to be active on holiday and soak up the culture. They are 69 per cent more likely than the average holidaymaker to enjoy camping, walking or hiking and 61 per cent more likely to visit museums and monuments. Motivations for these consumers are both cultural and economic.
“They’re particularly driven by notions of structure and escapism,” says Benoist. “They like to get off the beaten track, to go off and meet new people and do new things. What this group will respond well to is the dreamy notion of getting away from it all and finding new experiences.”
Although a lucrative group, experience enthusiasts are more likely to make their own booking arrangements, using sites such as Expedia, and with an ambivalent attitude towards advertising, they require careful targeting.
Then there are the ‘spontaneous fun searchers’, a group of 5.6 million who are most preoccupied with having fun. These consumers tend to be younger with smaller incomes and less cultural and economic capital.
They live for today rather than worrying about tomorrow. Taking risks, spending money without thinking and doing things on the spur of the moment are all hallmarks of this group.
“Unlike the proactive planners, they’re not interested in booking holidays in advance, which fits with their ‘who cares about tomorrow attitude’, explains Benoist. “They often don’t even care where they’re going, they just want to get out there and get stuck in.”
These consumers enjoy adventure activities, theme parks and clubbing. “You can see them in Ibiza, Faliraki or Kavos,” says Benoist. “ They love going on holiday but do it on the cheap, within their means.”
Seven million British consumers are classed as ‘package patrons’ by Kantar Media’s TGI research. This group is more likely to be younger and either still living with their parents or recently moved out, without a family of their own.
Although they may have lower incomes, as a result of their age, they lead busy lifestyles and are likely to worry about work during their leisure time. They seek to switch off as much as possible when taking a holiday, hence the tendency towards package breaks.
This group is likely to leave booking a holiday until the last moment, as a deliberate means to save money. They are 64 per cent more likely to book with Lastminute.com than the average holidaymaker – as a deliberate means to save money and spends the second least amount of the groups.
“They’re quite angsty. They want to get away and switch off. Although low on both economic and cultural capital, they tend to skew more towards the cultural, in contrast to the spontaneous fun searchers.
“This group’s attitude is: ‘oh my god, what am I going to do, how am I going to afford this holiday’,” explains Benoist.
The final group identified by the research are the ‘staycation seekers’, who despite being the smallest spenders on holiday, nevertheless make up 5.7 million British people. They are 79 per cent more likely than the average consumer to say ‘I like going back to familiar places for holidays’.
This group includes both empty nesters and primary school parents, with a median family income of £22,632. “When you have children, you might be trying to buy a bigger house and money is particularly tight, so holidays are an easy thing to slightly cut back on and do on the cheap in Britain.”
To succeed in the post recession market, travel brands must carefully indentify their target consumers, “pinning the groups down solidly,” explains Benoist. “Are you getting the right message out there? Are you tailoring it in the right way, at the right time, to the right people?”
By identifying consumer groups travel brands can also branch out into new areas. “By seeing exactly what they’re like and how you might best tailor your message to them, you can look at making more inroads into a market currently occupied by a competitor,” she says.
Head of marketing
Experience enthusiasts make up a large percentage of our clients, opting to visit the more off-the-beaten track locations that they haven’t visited before. This is fuelled by the need to discover new regions, learn a new skill, or try an extreme experience. We are seeing an increase in multi-stop destinations, where couples are looking to make the most of their time away. These include trips that traverse continents, such as a trip through the Andes in South America, or pairing a more classic destination with somewhere remote. This is by no means limited to just middle-aged couples with few family responsibilities. We are seeing an increase in clients asking for experience package trips with their, albeit slightly older, children. More and more want to experience the unusual with their family and educate their children about different cultures and physical experiences.
TUI UK and Ireland
I’m surprised to see that ’package patrons’ are more likely to book their holiday within two weeks of departure. As the UK’s number one package holiday company, we see a lot of people booking much further in advance. We launch our summer programme in May for the following May-October. In terms of spontaneous fun searchers, we sell holidays for youth, with activities and our all-inclusive trips have a fun sense to them – you leave all your money worries at home and just go and enjoy yourself. The pro-active planners’ group is probably where the TUI UK and Ireland heartland lies. We design particular holidays for particular kinds of people, like Thomson family resorts and Thomson couples hotels. People like to book early because they want something to look forward to. Quite often we have early booking discount incentives.
This research is part of Kantar Media’s Target Group Index, a catch-all survey that has existed in the UK since 1969. The research is ongoing and released quarterly. These figures are from quarter 4, 2013.