Comment: ONS figures point to a stronger outlook

Comment: ONS figures point to a stronger outlook

By Mike Saul, head of hospitality and leisure at Barclays

The traditional Easter escape took off with claims that airports would be gridlocked grabbing national headlines. While the airports continued to function over the long weekend, it does appear that the cautious optimism we’re continually hearing about is finally making an appearance.

ONS data for 2011, released last week, shows that after four years of decline the outbound market is returning to growth. The growth is, admittedly, tentative at 0.8 per cent across the whole year, but it’s encouraging news nonetheless.

If we look at the data in a bit more detail, the picture shows that we are indeed in a better position than we were this time last year; year on year, visits abroad are up 1% and compared with the same three month period to February 2011 they’re up 3%. Of course there is still a long way to go, but compared with the substantial declines in traveller numbers that we saw during 2008-2009, the market is stabilising.

The key underlying trend of 2011 was, perhaps unsurprisingly, the preference for short haul trips. Visits to Europe saw a 2.5% increase throughout last year, whereas holidays to North America fell 12.5% and to other countries fell by 9.5%.

With APD rates rising by a significant 8 per cent this month, this trend is likely to continue. Already we’ve seen some carriers adapting their schedules to meet the increased demand to popular destinations such as Egypt, Nice and Madrid. So what will holidays look like if more of us are staying closer to home?

One thing’s for sure, the traditional bucket and spade package is not what it used to be. The consumer perception of travel and their desired holiday destinations has changed substantially over the years and with this, so has the demand for specific offerings and indeed tailor made breaks. Whether this is through dynamic packages brought together by the holidaymaker themselves or through more bespoke agencies, personalisation is one trend that will continue to gather momentum.

The pace of technological development has meant that the personalisation agenda has become a simpler process, particularly with the ease of online booking. This is especially true at the value end, which fits the flexibility of the dynamic packaging offer, enabling consumers to pick and choose as they wish. This will continue to be a key area of growth for many operators, if positioned appropriately.

Indeed, at a corporate level this opportunity cannot be overlooked, particularly for those looking to enter and expand into new markets. Last week we saw Air France launch a new corporate website in Chinese. As travellers from across the globe become increasingly adventurous and mobile this inclusive approach will be more important.

While travellers will be more willing and more able to design their holidays as they want them, there is an important space for strong service-led operations. In spite of the turbulence of the past few years luxury-end operators have consistently performed well, and it is not just because of their traditionally affluent customer base, but because of the real edge delivered by a personalised service which really understands what the consumer wants.

The ONS figures point to a stronger outlook, and if operators are able to engage customers at a personal level I am hopeful last week’s figures will be a sign of things to come.


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