UK Foreign Holiday Market Essay Example | Topics and Well Written Essays - 1500 words

UK Foreign Holiday Market - Essay Example In the past few years, this market has grown at a modest rate of over 4% annually, with the significant consumer-groups in the market being families, youth, and the over-50 age group. However, the effects of global recession on this market are now gradually becoming evident. The demand for foreign holidays fell by around 15% in January, 2009 alone as the credit crunch tightened its grip on the UK economy (Devine, D 2009). A lack of consumer confidence and rising fuel prices have also recently added in, further dampening the demand. In addition, the unpredictability of British weather due to global warming, and a failure on the part of UK holiday-resorts to match services in terms of price and quality with that of their foreign competitors (Research and Markets 2007) have lowered the demand for UK holidays by foreign tourists. The overall effect is that the demand-curve for the market has shifted leftwards. Other factors like the threat of terrorism, war, and natural disasters in current years have also contributed to the left-shift of the curve, thereby resulting in lesser quantity being demanded at a lesser price in the market. However, the economic gloom does have a bright side for this market. The airline industry has been badly hit by the crunch due to which almost all air-fares have been dramatically reduced. Consequently, consumers are able to book cheap flights to almost anywhere in the world, and the overall package cost of foreign holidays has decreased. There has been an increase in demand for trips to Spain and Mediterranean shores - which surveys have pointed out as favourite holiday destinations - by the British (Holiday Watchdog 2008). This reduction in total price of the product has resulted in a downward movement of the market equilibrium point along the demand-curve. Moreover, cheaper flights also mean that UK has become more available internationally to foreign tourists, since they can now afford air-travel for leisure purposes. The fierce competition between Airbus and Boeing has created an over-capacity of aircraft, and is expected to result in an explosion of discount carriers offering flights at affordable prices. Thus, there has been an increase in the quantity demanded. The ocean cruise market, which is a complement of the overseas holiday market, is expected to reach 1.5 million annual passengers by the year 2010 (Travel Weekly 2005). This high growth prediction means that its complements (like the foreign holiday market) will also consequently grow. Also, surveys by the Confederation of Public Transport have shown that a very high priority is attached by British to the annual holiday as an item of family expenditure due to changes in consumer attitude and lifestyle over modern times (Scottish Tourist Board, et al 2006). Thus, the economic downturn has not put off the British from taking foreign holidays. On the contrary, the current poor weather in the UK has helped the tourism industry by encouraging even more people to go abroad for the summer, particularly to places that "offer consistently good weather" (Property Wire 2008). Infact, psychologically speaking, the British are more eager than ever to go on a holiday in this potentially depressing situation since one way they believe "to escape the current economic gloom is to take a foreign holiday" (Property Wire 2008). Being now considered as an annual necessity rather than a luxury, the