Come rain or shine

Could 2020 actually be a good year for some parts of the UK domestic travel market?

Whilst the opening of Europe has provided some respite for airlines and airports, ever-changing risks and regulations are driving many UK holidaymakers to choose staycations, both this year and into 2021. 

We take a look at the three tourism markets: 

Domestic 
After months of lockdown, many holidaymakers are desperate to get away from home, and the uncertainty of international travel has caused a spike in UK holiday bookings, with one staycation being booked every 11 seconds immediately after lockdown was relaxed. Airbnb said it recorded more domestic bookings in the UK in three days in June than in the entire month of April. Haven Holidays, an operator of caravan, touring and camping facilities across coastal sites in the UK, is looking to open its sites until the end of November for the first time in its history.

Demand is strong in the luxury self-catered market too, with Cornish Gems, who run luxury self-catered properties across Cornwall, reporting the biggest booking levels in their history, with June 2020 being up 240% in sales compared to June 2019 and an overall 108% increase in year-on-year bookings. 

The VisitBritain COVID-19 Consumer Weekly Tracker (27-31 July 2020) showed that 88% of respondents do not expect things to return to close to normal, during 2020, with 54% expecting this to be after March 2021.  It is therefore no surprise that Cornish Gems is also already reporting a 50% year-on-year increase in advance bookings for 2021.  It is clear that some holiday companies will make up for the lost income in the early part of the summer by an extended booking period over the winter. 

Inbound
The picture for inbound tourism is not so rosy. Whilst there has been a relaxation on travel restrictions, primarily as Europe tries to ensure that summer goes ahead, they are still having a major impact. With 60% of its routes still subject to quarantine, Heathrow has called for the government to further relax rules and allow for airport testing to stimulate traffic. However, even if this policy is adopted it is unlikely that long-haul travel will recover significantly in the coming months.

This has implications not only on the number of Britons deciding to travel abroad for their holidays, but potentially more significantly for city hotels which are reliant on the inbound tourist market. London hospitality businesses are calling for additional support and Edinburgh’s occupancy is estimated to be at 23%. Whilst 2020 was initially forecast to be a record year for inbound tourism with 42.1m visits, at the time of writing, Visit Britain was forecasting a decline of 59% in visits compared to the pre-Covid forecast. 

Outbound 
Europe was declared open for the summer in June, providing hope of increased passenger numbers for airlines and airports alike. The lure of the Mediterranean and looser regulations, resulted in an immediate increase in bookings, with Easyjet expanding its revised flight schedule to 40% of capacity between July and September from its initial plan of 30%. ForwardKeys reported that in the 5 weeks following the announcement that Spain, Greece and Portugal were open, the Intra-European bookings to those destinations rose to 65% of last year’s bookings over the same period.

After this promising start, fears of second waves in Europe have led to tighter regulations being imposed in many locations. The UK's decision to reimpose quarantine restrictions on arrivals from Spain resulted in searches for future travel to Spain dropping by 62% week on week, back down to mid-May levels. The positive for airports and airlines is that there was also a corresponding peak in the bookings to Greece as those desperate for summer sun sought an alternative, but for any potential holidaymaker the required speed of the purchase decision, and fear of increased restrictions may just persuade them to holiday at home.

Whether at home or abroad, what is clear is that the desire for an experience is still strong, and that demand from the tourist market will be part of the new normal.

Edward Newton