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5 year holiday market recovery
August 26th, 2010 by elisa

A new report by Mintel indicates that VAT increases and higher fuel costs which will make holidays more expensive from next year could cause another dip in the market.

“Recovery is not a word that can be applied to the holiday market in the coming five years,” it warned.

“Higher holiday prices due to high VAT will hurt the market as the costs of low-cost flights are increased.”

The spend on overseas holidays is forecast to rise by 17 percent over the next five years, this is much more than it has risen in recent years but this will be because of higher holiday costs.

“In constant price terms, expenditure on holidays will decline by 1.6 percent between 2010 and 2015,” it said. “Changing exchange rates and higher fuel costs will play a major role in holiday prices in the coming years and higher prices will limit volume growth.”

The report also suggests that if low-cost flights disappeared, those most likely to cut down on their travel would be the ABC1 pre-/no family group. The two markets that would be most affected would be overseas city breaks and holiday homes.

The report concluded: “In the coming years, while beach and family holidays will continue to dominate the market, more diversification will be seen in holiday types. Niche products/destinations will see the fastest growth.”


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