The Next Decade Trends in Domestic Leisure Tourism Phil Evans Head of Policy and Insight
VisitEngland is the national tourist board for England, responsible for marketing England to domestic and established overseas markets and for improving England's tourism product
It is an ‘arm’s length body’ funded through a Government grant
Total tourism spending in England in 2013 was c.£83bn Tourism Spend in England 2013 (£bn) £18.7 £18.4 £46.0 Domestic Overnight Domestic Day Trips Inbound (est.) Source: GBTS 2013, GBDVS 2013, IPS 2013
• Looking at 3 year averages for the Isles of Scilly (2011- 2013), there were 88,000 domestic overnight trips to the area (66,000 of which were for holiday trips), generating a spend of £35m
Introduction Today’s objectives • To examine a series of trends that will be influential in determining the future of domestic leisure tourism • To discuss the implications of these trends for businesses / organisations in the Isles of Scilly • To understand how we can support your business/organisation in understanding and planning for these trends
Introduction Today’s agenda 1. Two presentations, each covering two groups of trends • Demographics / Economics & the Downturn • Information & Technology / Consumer Trends 2. After each presentation – a discussion about the relevance and implications for local businesses (in groups)
Demographic Trends
‘Squeezed Middle’ Generation Demographic Changes 2013-2020 +10% Under 18s More younger people 18-34s +1.2% -3.4% 35-49s Fewer ‘squeezed middle’ +10.5% 50-64s +11.2% 65-79s More older people +19.2% 80+ Source: ONS Population prospects
The Vertical Family Rising life expectancy has coincided with an historically low fertility rate – which has had a profound impact on family structure This has particular implications for accommodation, as families are likely to go away with more adults (including grandparents) and fewer children
Untraditional Families Higher levels of divorce and remarriage, an increase in the age of childbirth and greater social liberalism are all creating new types of families – far removed from the traditional image of the Nuclear Family. Across the Tourism sector, businesses need to be agile to sharply varying expectations, needs and demands caused by a huge array of different family types and shapes
Changing Socio-Ethnic Profile % of people in England and Wales born outside the UK 16.0% The social profile of the UK is 13.4% 14.0% changing rapidly – the last census revealed that over 13% 12.0% of the population were born 10.0% 8.9% outside the UK 7.3% 8.0% 6.6% 6.1% Immigrants’ tourism behaviour 6.0% traditionally differs to others, 4.0% often as consequence of 2.0% economic, cultural and labour market conditions 0.0% 1971 1981 1991 2001 2011 Source: UK Census, 2011
Economic Trends
Economic recovery The downturn is almost over Q4 2014 Source: ONS/Trajectory
Economic Stagnation The ‘lost decade’ spurs a range of consumer reactions Minor changes to shopping habits... Cutting back Few changes Shopping (13%) (47%) around (19%) As shopping Saving money, around + No Small collecting loyalty annual holiday, adjustments to points, socialising at existing lifestyle comparing prices home, second only hand clothing All strategies Drawing down (10%) (11%) Many across Stopping paying groups + getting into pension, into debt to pay using savings to essentials pay bills ... wholesale lifestyle changes Source: Which?/ Trajectory Consumer 2012 Report
Discretionary Thrift • Consumers are looking to cut back ‘I like to find bargains, even when I across all areas of spending – even don’t need to save the money’ when they don’t strictly need to 70% 61% 60% 56% 55% • Consumers are employing a range of money saving strategies – from 50% vouchers to comparing prices 40% • The broader benefits associated with saving money – including the feeling of 30% ‘getting something back’ mean that as long as it remains convenient, 20% consumers will continue to choose to save money into recovery 10% 0% 18-34 35-54 55+ Source: Trajectory Global Foresight 2011-13
Mercurial Consumption 44% 59% say buying trusted say getting the brands is important to cheapest price is them important to them Price Consciousness creates agile shoppers Over the course of the downturn, consumers have become less loyal to brands and more likely to shop around – choosing on price rather than brand affinity Source: Trajectory Global Foresight 2013
Value Hunters As recessionary pressures have forced Getting the cheapest price is important to me’ many to cut back on their spending, 70% consumers are increasingly eager to 62% employ money saving strategies 60% 54% One of the most common is using 50% 46% coupons, which since the start of the downturn have lost their stigma – now, 40% just 4% of consumers say using a supermarket voucher is embarrassing 30% 20% More broadly, services such as Groupon or VoucherCodes (and many 10% others) demonstrate the active desire to find bargains and save money 0% 18-34 35-54 55+ Source: Trajectory Global Foresight 2011-13
Economic Trends What does this mean for Holidays? Better off consumers are increasing their domestic spend – but poorer consumers are just cutting back altogether 2006 vs Domestic Holidays by Social Grade 2006-2013 (Est) 2013 (est) 42% 20 +30% 15 +16% 10 Say they are +8% -20% 5 spending less on holidays 0 2006 2007 2008 2009 2010 2011 2012 2013 (Est.) AB C1 C2 DE Source: GBTS / VisitEngland Staycation Research
Demographic & Economic Trends Implications and Summary • Families are changing in size, shape and composition, and no longer fit into an easy Nuclear Family model • Population growth is driven by both a baby boom and an ageing society But the ‘squeezed middle’ generation will be time poor – but looking to • indulge themselves at every opportunity with short breaks and treats • Economic recovery on the horizon, but consumers yet to feel benefit • There is no one experience of the downturn, but a number of common money saving strategies Holidays are not immune to this cost cutting – although consumers are • switching to domestic tourism
Economics and Demographics Group exercise • What are the implications of these demographic and economic trends for the next decade? • How should local businesses/ organisations respond now and in the longer term? • What should you/ they START doing, STOP doing and CONTINUE doing?
Information & Technology Trends
Internet Access & Usage With internet penetration in the UK approaching 100% of consumers, the key signifier is in how different people use the internet, rather than who One of the key differentiators is age – younger people ( perhaps ‘digital natives’ ) are more likely to ‘live’ online, whereas older consumers see it as more of a practical tool Social activities – weighted towards under Practical activities – done by all 35s 100% 80% 60% 40% 20% 0% Email Booking Banking Social Instant Playing travel online networking messaging games 18-34 35-54 55+ Source: Trajectory Global Foresight 2011-13
M&T Commerce 80% One implication of rising mobile and tablet 72% usage is the blurring line between 70% portable use and home use 60% 2011 60% 2012 Tablets and smartphones are ostensibly 51% 50% portable devices – but are often as 50% 2013 powerful as traditional desktop computers 40% Their range of uses has wide-ranging 28% 30% implications for the tourism industry – from booking online to contactless 20% 16% payments 10% More portable devices (and the volume of activity on them) increase the likelihood 0% of people expecting internet access while Owns smartphone Owns tablet on holiday Source: Trajectory Global Foresight
Social Media 63% of people in England use social networking sites – including 84% of 18-34s The rapid spread of information online – often through social media – can have huge implications for the tourism sector Another implication of rising social media use is (often public) customer interaction Source: Trajectory Global Foresight
Data and Privacy Concerns about the security of their personal information is one of the biggest barriers to increased internet use for consumers in England. But, where consumer data is used to personalise and enhance the user experience, consumers appreciate the convenience 29% 33% Of internet users say that Of internet users say slow concerns over privacy or connection speeds limit security limit the way they the way they use the use the internet internet Source: Trajectory Global Foresight 2013
FOMO FOMO (Fear of missing out) The ease with which people can share their leisure activities with family or friends increases our exposure to different experiences People will become increasingly reluctant to miss out – and they won’t want their peers to be having more fun than they are This fits in with a longer term tendency of broadening leisure portfolios
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