The savings and protection offered to consumers from package holidays could hold the key to increasing consumer confidence, acting as a catalyst to kick-start the UK tourism industry’s recovery, following the devastating impact of Covid-19.
New research released by consumer group Which?, revealed consumers could be making a considerable saving of between 4% and 76% on the cost of their holiday by purchasing a packaged trip, as opposed to a DIY option.
According to GlobalData, package holiday bookings are projected to grow at a CAGR of 3.9% from 2019 to 2024. This healthy level of growth further shows how consumer appetite for package holidays is likely to increase. easyJet is pinning its hopes on the increased popularity of package holiday bookings, expecting them to drive a substantial amount of its revenue in 2021.
Consumer confidence is still low
The Covid-19 pandemic has placed financial strain on consumers and has sent confidence tumbling in the UK. According to GlobalData’s Week 10 COVID-19 Recovery Consumer Survey (4-8 November), 53% of UK respondents are ‘extremely’ or ‘quite’ concerned about their personal financial situation.
As financial concerns grow, consumers are likely to become more prudent with their spending. A more competitive priced package is likely to sway consumers into booking a trip. Therefore, if companies can price holidays competitively, offering savings compared to a DIY booking, then package holidays could help boost consumer confidence, leading to an increase in demand for travel.
A package holiday offers consumers protection
Not only have package holidays been found to be considerably cheaper, they also offer unparalleled protection, which in times of travel uncertainly could be invaluable to the consumer, and work in the favour of travel firms.
Packages sold in the UK are protected under the Package Travel Regulations 2018, which is often accompanied by the UK CAA’s ATOL protection scheme. This entitles the consumer to a refund within 14 days if the tour operator or airline goes bust, as well as repatriation if this occurs whilst on a trip.
Package holidays provide the consumer with added layers of protection on their holiday and this could also be key to improving consumer confidence. The main purpose of a holiday is to switch off and relax, consumers will be looking for the simplest and most convenient method of booking, in order to reduce the risk of added stress. When booking a package holiday, the construction of the holiday itinerary is done by the company and not by the customer, which further increases attractiveness.
As the UK tourism industry looks forward to recovering from the Covid-19 pandemic, package holidays will likely play a large role in improving consumer confidence, increasing demand, and could provide the industry with a much-needed boost.