New independent report analyzing the UK's growing leisure sector in 2012 & 13

The UK Leisure Accommodation Market
Market Overview 2012-13

Tourism is now a key part of the UK economy and, according to English Tourism's own figures from 20111, tourism contributed £97 billion overall to GDP in 2010 - although, nearly half (44%) of this related to domestic day trips, domestic overnight and inbound spending by overseas visitors were also both significant with accommodation playing a large part in tourism provision. Although the public perception may be that most of the available accommodation stock for tourism is "serviced" (hotels, B&Bs, guest houses etc), in reality, the non-serviced accommodation provided by the UK leisure sector such as camping, caravan parks, motorhome hire, campervan hire and holiday cottages accounted for over half of the more than 65,000 stock available in 2011[1].

This independent report commissioned by motorhome hire and campervan hire rental website ukmotorhomerental.com seeks to shine a light on the UK leisure accommodation sector today highlighting the factors which have led to the continued growth of this sector, the effects of the staycation trend and the changes in demographics and behaviours of consumers. We look back on a mixed 2012 for the English tourism industry and look ahead to where the leisure accommodation sector may be heading in 2013 and beyond.

The UK Leisure Accommodation market

Traditionally, leisure holidays in Britain have been popular with both domestic holidaymakers and overseas visitors alike but, in recent years, the range of accommodation available to those looking to holiday in the UK has broadened with camping and caravanning now supplemented by lodges, motorhomes and campervans and newer phenomena such as yurt – the choice has never been so wide. This growth has been consumer driven with increasingly sophisticated consumers not just looking for choice and value but also differentiated provision tailored to suit their needs and preferences with age, demographics and lifestyle playing a large role in different people wanting different things. The sector has continued to grow in recent years despite the onset of economic recession. At the back end of 2010, some were still predicting year on year upward growth in light of healthy looking bookings for 2011 but things have slowed in 2012 with bookings down for many providers despite the extra focus on the UK as a result of the Jubilee holiday and the Olympics. So, have the wheels come off for this sector or are there extenuating factors which mean that 2012 can be considered as a one off?

2012 – Was it all that?

The Olympics and Paralympics have been great for Britain on many levels and have brought many international visitors to the UK but they have skewed demand for the accommodation sector. Despite the Torch Rally and events being held in locations across the country, the focus has largely been Londoncentric with overseas visitors putting even more emphasis on London than usual and domestic tourists, faced with continued economic pressures, needing to weigh up whether they can afford to visit the Olympics as well as also taking other holidays. There were even issues for London where accommodation and other tourist facilities saw a compressed season focused largely on the duration of the Games and lower demand outside of this. The cost of attending the Games led some to have to choose between a day or two at the Olympics or a few days away elsewhere and the leisure accommodation saw particularly slim pickings from Olympic fever. The concentration on keeping people onsite on the Olympic Park to maximise their Olympic experience meant that Olympic visitors were not thinking of touring when booking accommodation whereas the focus on a large city location wasn't a natural fit for fixed location accommodation such as campsites.

The continuing effect of the recession continued to squeeze leisure spending this year but whereas, in most recessions, camping and caravanning would be seen as an affordable option, the very poor summer weather delivered a double whammy for these providers with some people being put off straight way due to the weather forecasts whereas other Brits who would normally holiday overseas but who targeted the value end of the leisure accommodation sector in 2012 only to experience persistent poor weather may well be even less interested in holidaying in British leisure accommodation in future. Conversely, the higher end of the leisure accommodation sector including premium holiday cottages and high end motorhomes would not have been an obvious target for those looking for economy holidays. Visit England's most recent Domestic Industry Panel survey (July 2012)[2] also highlighted that those expecting to see an uplift in business in 2012 saw consumers reluctant to travel due to the continued high level of fuel prices and the need for people to restrict their budgets led to a move towards taking shorter breaks with people holidaying domestically less willing to spend time "getting there and back". The survey revealed a feeling amongst industry insiders that, although things should get better in 2013, with regard to 2012, they just needed just to "get through it" and accept smaller margins as market conditions prevented them from being able to pass any increased costs on to consumers.

The Staycation effect

So, how did the "staycation" trend in recent years which has helped to fuel growth in the leisure accommodation sector play out in 2012? Those wanting to escape the Olympics may have been open to stay in the UK but may have been put off by the expectation that roads, airports and other transport links will have been busier across the country during the Games whereas those looking to make last minute decisions about where to go may well have been dissuaded from staying in the UK via a combination of the poor weather and the deals on offer from the also-struggling serviced accommodation sector outside of London looking to shift large numbers of empty rooms this year. Also, as Visit England have highlighted[2], areas such as camping are generally not as well set up for last minute online purchases as serviced accommodation. Whilst it is overstating the case to say that holidays in England nosedived compared to Brits going overseas, there can be no doubt that the march towards a year on year growth in staycation was checked in 2012.

On the bright side, other indicators pointed towards more positive developments for the sector as a whole. Visit England's most recent survey-based report on Staycation (September 2012)[3] suggested that as many as 20% of UK consumers are starting to feel that the UK is over the worst of the recession with only 40% cutting back on holidays as a means of making savings and many doing this by taking shorter breaks rather than fewer holidays. In line with other reports, the survey found that families with parents in the 35-54 age range were most likely to sacrifice holidays whereas couples aged 55 and over (often referred to as Empty Nesters) were those whose holiday plans were least affected by the recession and other factors. This older group typically favours touring as they are drawn by the freedom of the open road and the need to plan their holidays less rigidly than when they had young families to consider giving rise to the "gramping" trend. Across the whole demographic, many people were still planning to take holidays before the end of 2012 in the UK (typically of 8 nights or more) to that the extent that a strong autumn could even see the UK accommodation sector beat 2011 levels. However, this is counter to suggestions elsewhere that the summer was that poor for many in the industry (particularly typically smaller or independent providers) that 2012 won't be able to match the previous year irrespective of how well bookings firm up towards the end of the year.

Finally, whilst it is commonly felt that the short Jubilee bank holiday had little effect on the leisure accommodation providers with people largely attending local events, one other issue that must be mentioned, particularly in relation to motorhome and campervan hire was the decision of the organisers of the Glastonbury Festival to make 2012 a fallow year. In recent years, owners of leisure vehicles (both owner-leasers and fleet owners) had begun to rely on Glastonbury as a money-spinner with some seeing as many as 90% of their high season enquiries being related to Glastonbury[4]. There are other festivals but there is only one Glastonbury and the size and demand for this event had, up until this year, grown to dwarf demand for other festivals – although TV pictures tend to focus on revellers in the mud, glamping has seen a tremendous rise. No Glastonbury meant no bonanza leaving owners with a hole in their revenues.

The maturing leisure accommodation market

It is also worth noting that, as residency in all types of accommodation tends to lag bookings by up to a year e.g. people book in 2011 for 2012 dates, although the summer of 2012 may have been quieter for residency than 2011, it would be wrong to assume that the increasing maturity of areas of the newer areas of the leisure accommodation sector such as motorhome and campervan rental slowed in 2012 – it did not. Consumer expectations for tailored services have continued to increase with customers routinely demanding "add ons" such as pets, airport pick-ups and use in the wider EU in addition to the more basic elements of enquiries related to hire location, make and model and number of berths[4]. Consumers are used to being able to tailor their searches for serviced accommodation and have taken that behaviour in to these areas. The more savvy owners and hire agents have kept abreast of these trends and been quicker to adapt their offerings whereas those who haven't reacted flexibly have tended to miss out on bookings. Other recent research for Visit England into understanding the consumer for holidays to English destinations[5] also suggests that factors such as being able to take pets result in people electing to take domestic holidays.

Although there have been discussion about the influence on the market of older age groups, it should also be noted that 2012 saw one trend very much aimed at engaging the young – the proliferation of campervan branding for clothing, stationery and other items aimed at children with the effect of making the "hippy van" trendy and generating demand for classic campervan hire from both ends of the age spectrum. To counter this, research for Visit England[6] suggests that younger families were perhaps the least likely to stay in England partly due to the ignorance of English locations amongst the under 35s who grew up on foreign holidays or repeated trips to only a small number of domestic locations. However, perhaps the most interest aspect of the same research is what it has to say about the way in which consumer groups search digitally for leisure accommodation has continued to develop with evidence that all age groups are now searching online for leisure accommodation at all stages of their holiday from planning to on the go with signs that many are now engaging more with social media with regard to their interest in leisure accommodation.

With regard to the newer market for motorhome and campervan hire, despite quieter bookings in 2012, additional vehicles continued to be added to hire stock in 2012[4] reflecting the general trend of expanding interest in this sector but we should guard against extrapolating from data for number of owners as, whilst there are fleet owners focusing on this sector purely as a business venture, there also continue to be many vehicles being marketed for hire by owner-leasers often as a lifestyle business offering one or two vehicles and their decisions as to whether to add more vehicles, continue with their current stock or take their vehicles off the market – stick, twist or fold – often being based on personal factors outside of general market trends.

The international dimension

Whilst the majority of interest in UK leisure accommodation continues to come from the UK, there has always been inbound demand from overseas visitors looking to book leisure accommodation in the UK irrespective of factors such as weather. Whilst the UK tourist sector has not been immune from the effects of the global recession, overseas visitors continued to come to the UK in 2012 not only using serviced accommodation for the Olympics but also to continue to book leisure accommodation across Britain. English Tourism's general data from 2011[1] suggested that inbound demand in 2010 rose by approximately the same amount as domestic demand (5% vs. 6%) with most inbound holiday traffic to England coming from France, USA and Germany. More recent data for the motorhome and campervan hire sector[4] suggests that most overseas interest comes from the USA but that Motorhome Hire London continues to be popular as does Motorhome Hire Scotland.

Looking ahead

The data available for 2013 bookings so far seems to bear out feelings in industry surveys that, although 2012 was more difficult than 2010 and 2011, many of the issues were "one offs" (Olympics, no Glastonbury etc) and 2013 will see a return to the general upward trend for the leisure accommodation sector. Early bookings for leisure vehicle hire[4] for 2013 have been more positive with interest related to the return of Glastonbury in 2013 having been particularly strong. Furthermore, although camping and caravanning had a mixed 2012 (largely due to the weather), the very latest information (November 2012) from The Camping and Caravanning Club[7] suggests that bookings for 2013 are 25% up on a similar point at 2012. Interestingly, The Club had previously reported[8] that the main driver for autumn 2012 bookings across their sites had been the over 55s bearing out other indicators that this group may be the most resilient and "recession proof" within the leisure accommodation market.

Research for Visit England[3] suggests that 2012 is looking like a blip in a long term growth trend. Whilst major economic recovery is not expected until 2014 at the earliest, many people are now over the shock of recession/austerity and have more of a "life goes on" attitude which is helping to restore a degree of normality to areas of discretionary spending such as leisure & tourism and that the domestic tourism sector will see its fair share of this demand as people seek an escape from their day to day struggles and are prepared to ringfence spending on holidays to achieve this.

Du Cane Associates
November 2012


References
[1] English Tourism Factsheet, November 2011
[2] Visit England, Domestic Industry Panel, Wave 18, July 2012
[3] Visit England, Staycation, September 2012
[4] 2012 YTD data from ukmotorhomerental.com
[5] Visit England, Motivation and Barriers report, September 2012
[6] Visit England, Digital Landscape presentation, 2012
[7] The Camping and Caravanning Club, press release, November 2012
[8] The Camping and Caravanning Club, press release, October 2012