PRESS RELEASE BY MBD...

UK TOUR OPERATORS MARKET RESEARCH REPORT

RELEASED: MAY 2008

After researching the UK tour operators market development and taking into account various other factors the following conclusions can be drawn from MBD's report:

MARKET REVIEW 2003-2007:

In 2007, total expenditure on holidays abroad by UK residents increased by 5% to £24.5 billion, continuing the growth trend evident in recent years. This is equivalent to an overall increase of 24% since the beginning of the review period. Total expenditure has been buoyed in recent years by the rising demand for holidays to previously less popular and less affordable destinations, such as the Caribbeans, South America and Australasia. Growth has also been driven by the trend towards people taking more frequent holidays (e.g. winter as well as summer holidays), and by the growing popularity of short breaks.

Expenditure on inclusive tours has also increased during the majority of the five year review period. In 2007, spending is believed to have reached £11.1 billion, equivalent to growth of 7% in the year, and consolidating a 5% increase recorded in 2006. However the proportional importance of inclusive tours to total spending on holidays abroad has declined from 49% in 2003 to 45% in 2005, a share that has been maintained since. This downward trend reflects the increased competition from DIY holidays, where people book flights and accommodation separately.

MARKET FORECAST 2007-2011:

Expenditure on holidays abroad by UK residents is forecast to increase by a moderate 1% in real terms in 2008, with slightly stronger annual growth of between 2% and 3% expected for the following four years. Overall, spending on holidays abroad is forecast to increase by 12% in real terms between 2007 and 2012. In the short-term, expenditure on holidays is expected to be restricted due to more uncertain economic conditions, weaker consumer confidence and rising pressures on household finances. However, MBD expect real term growth to be sustained throughout the forecast period, partly reflecting the continued popularity of holidays abroad, with many people now seeing an annual holiday as a necessity rather than a luxury. The trend towards short-breaks partly facilitated by the availability of low cost flights as well as the trend towards holidays further afield and in more exotic locations, is also expected to continue to drive expenditure on holidays abroad over the next five years.

NOTE TO EDITORS:

Market & Business Development Ltd specialises in business to business market research. The range of reports and industries in which we operate in constantly expanding (our portfolio comprises of more that 140 titles). All our reports are written by in-house market consultants.

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