The Impact of the Recession on Travel to Europe 2009/10

CANTERBURY, England, February 8 - Over the past year the credit crunch has seen the nation tighten its belt
and feel the squeeze. The prosperous era of 'splashing out' has come to an
abrupt end and given way to feelings of thrift and frugality that have led us
all to keep a beady eye on the balance sheet. The finer things in life are
therefore being cut out as we all endeavour to weather this storm as
painlessly as possible. This has had a huge impact on the UK travel industry
which is expected to contract by 8.9% this year. As Carroll Rheem, Director
of PhoCusWright, has stated: 'British travellers have had to cope with
currency devaluation on top of the recession, and both have driven
significant changes in travel patterns.' This article investigates these
emerging trends with relation to travel to Europe in 2009/10 and goes some
way to providing an outlook for the future.

Fewer people are expected to travel this year but us Brits love a bargain
and, rather than giving up our travels entirely, most of us are on the
lookout for good value and special deals. In fact, in mature markets such as
the UK and Germany, the percentage growth of Google travel searches for
2008/9 matched growth for 2007/8. Andrew Pozniak, Google Head of Travel
Europe, Middle East, and Africa, surmised that: 'Activity rates have
increased solidly, but conversion rates have been tougher. This shows
appetite (for travel) has not been dimmed by the recession.' Conversely, the
recession has highlighted the importance that Brits place on travel over
other activities. The Travel Nation report carried out by Eurostar in April
2009 concluded that Brits prioritise holidays as the most important of all
luxuries, above eating out, buying new clothes and entertainment. According
to their survey, over a third of adults (36%) would happily not eat out in
restaurants for an entire year and nearly one third (29%) would rather not
buy any new clothes for an entire year than miss out on their holiday.

So although we are unwilling to forgo our precious annual holiday(s), we
are nonetheless looking to travel in cheaper, more cost effective ways.
Through the internet we are able compare and contrast vast quantities of
information to find the best deals at websites such as travelsupermarket.com
(flights, hotels, car hire, insurance, holiday packages,) and The Currency
Exchange Site (www.currencyexchange-uk.co.uk/) (foreign exchange).
For this reason the online travel market has grown steadily over the past
five years and is now worth 60 billion Euros. In contrast, the offline
travel market has seen a steady decrease in sales with
a CAGR of -0.6% for 2002-2008 (European Online Travel Report 3 by Eye).
Package holidays have also been popular during the economic crisis as people
are looking for security and prefer to know exactly how much their holiday is
going to cost from the outset. Another trend that has emerged is the rise of
the 'soliday' - many people are resorting to travelling alone as friends and
family struggle to fund holidays. According to ebookers.com, nearly 15% of
holidaymakers took 'solidays' in the past year due to friends and family
being unable to fund travel plans as a result of the recession. The most
popular locations for solo travelling include Europe (34%), India (14%) and
Africa (11%). Ben Reynolds, Head of Marketing at ebookers.com said: 'The
recession is changing the way we travel, with people looking at new ways to
ensure they can still jet off on a break this year. The soliday seems to be
emerging as a trend for people who can still afford a break.'

Surprisingly, findings by the Travel Nation report carried out by
Eurostar suggest that people will be continuing to travel to the same
European destinations in roughly the same numbers as last year, suggesting
that the fall in exchange rate of the pound against the Euro has not had the
dramatic impact on travel to the Eurozone that has been widely predicted.
According to their survey, exchange rate influenced choice of destination for
less than one in five of us and is therefore not a significant factor. Two
theories that go some way to explaining why we have remained loyal to the
Eurozone, despite the exchange rate, are that it is close to home and so
travel costs remain low, which is without doubt a huge factor in considering
a holiday destination, and that people are 'more inclined to go somewhere
tried and tested,' i.e. Europe, during these uncertain times.

The vast majority of us would also like to manage risk for our holiday by
doing our homework and 'looking for advice' on how to get the best value from
our destinations. The recession means that our attitude to consumption has
become more constrained. This brings with it a more considered approach to
travel spend, meaning people will increasingly seek ways to minimise risk and
maximise on overall value. In response, European travel retailers are on the
verge of rolling out customised concierge services to the mainstream.
Concierge services range from destination based experts who contact customers
before departure and help them create a tailor-made experience to traditional
travel agents offering a before, during and after service. This is a means
for travel companies to drive up margins and increase loyalty and customer
satisfaction at a time when consumers need help trawling through the plethora
of information on the internet and are demanding more experience led travel.
As Caroline Bremner, Research Manager to Euromonitor International Global
Travel and Tourism, put it: 'Concierge services traditionally cater to the
wealthy and luxury travellers. However, companies are ripping up the rule
book and realising that these services are just as helpful and appreciated by
the mass market. This area offers the opportunity to reach out and provide
value added services like never before.'

With the democratisation of luxury therefore on the cards, travel and
tourism in Europe has a bright future despite current global financial
uncertainties.

About Exchange-Currency.com Ltd

Exchange-Currency.com Ltd's website, The Currency Exchange Site, is a
travel money and currency exchange comparison website. The site contains
comparisons of travel money, currency card and travellers cheques providers
as well as reviews, recommendations and tips for saving money while abroad.
For more information please visit www.currencyexchange-uk.co.uk.

Contacts public: Claire Jakeways, admin@exchange-currency.com

Contacts public: Claire Jakeways, admin at exchange-currency.com