Market Trends

Last Updated on: 12 April 2011

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The UK was slower than all other major economies to emerge from recession and, while there are signs of improvement, recovery is expected to be slow, with experts predicting that it will be 2015- 2016 before a household at the midpoint of UK income distribution returns to the living standards of 2002-2003. Government austerity measures are set to continue until 2017.Tourism New Zealand is continuing to target those who are most likely to come to New Zealand, including younger travellers and the traditionally strong 50-plus traveller market.

These sectors will remain the focus for New Zealand as other travellers look at destinations closer to home in 2012.

Economy

Key Indicators

Sources:
www.imf.org (GDP Growth)
www.xe.com (Exchange rates)

Exchange Rate vs NZD GBP1 = NZD1.93 (16 Jan 12)
Expected GDP Growth +1.14% for 2011
+1.58% for 2012
(September 2011 est.)

For more detailed information on the UK economy, visit www.economist.com or read the economic analysis in New Zealand Trade and Enterprise's UK country guide.

Outbound Travel

The number of British people travelling abroad in the year to October 2011 dropped by 3 per cent, according to the Office for National Statistics (source: www.ipkinternational.com).

The two major factors continuing to impact outbound travel from the UK are the slower-than-expected economic recovery and the weak British Pound. Together these factors have contributed to a decline in the number of British travellers arriving in New Zealand into the first months of 2011, on the back of decreasing arrivals throughout 2009 and 2010.

Feedback from UK travel sellers suggests British consumers who are travelling are opting for holidays to warmer, closer and cheaper destinations within the Eurozone.  In addition, 2012 offers a wealth of events to entice the British traveler to stay in the UK, such as the London Olympics, Queen's Jubilee and Euro 2012 football competition.

According to Tourism New Zealand research, members of our target market in the UK are looking for a holiday destination where they can have fun, learn, relax and explore new things.

Younger travellers from our target market in the UK are more likely to value reducing stress, escaping everyday life, and having excitement and adventure.

Airline Update

New Zealand is well serviced with air capacity from the United Kingdom.
Air New Zealand provide services via both Hong Kong and Los Angeles daily, while a number of carriers offer one/two stop services via Asia (Singapore, Hong Kong, Korea, Malaysia, Thailand). A number of Middle Eastern Carriers also offer options via UAE and Australia.

Multi stop and code-share options are also popular particularly amongst youth travellers on round the world fares or taking a gap year.

Fare levels fluctuate across the year depending on season and demand. The strong northbound traffic, fare increases, increases in taxation (APD) and in 2011 the return of fuel surcharges have seen fares return to pre recession levels (GBP 1000+) over much of the year. UK travellers have been conditioned to seeking deals and frequent fare initiatives are continually launched leading to an ever shorter booking window (often six to eight weeks).

Cruise Update

The UK cruise market is on the upturn. Cruise numbers grew during the 2010/2011 cruise season, and the expectation is for growth again in 2011/2012, with new capacity being added worldwide. An estimated 15,000 British travellers took cruise holidays around New Zealand or are part of a longer itinerary (round the world) in the 2010/2011 cruise season.

Competitor Activity

Closer, warmer, cheaper destinations appear to be of greatest appeal to British travellers at present. The strengthening of the British Pound is seeing travel to Europe again affordable and popular. Deals and all inclusive holidays (cruise included) are popular forms. Turkey and other sun destinations on the edge of the Eurozone have experienced strong growth.

Amongst competitive destinations for the period January/September 2011 YTD results are as follows (New Zealand - 3 per cent):
• Australia - 4 per cent
• South Africa - 9 per cent
• Canada - 5 per cent
• USA + 1 per cent
• Thailand + 7 per cent