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Market Focus 2009

Fourth Edition February 2009 Edited by James Manley ISBN 978-1-84729-423-4

Market Forecasts: Transport, Travel & Tourism

Market Forecasts: Transport, Travel & Tourism

Foreword

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Market Forecasts: Transport, Travel & Tourism

Contents

Contents
Introduction 1

OVERVIEW .......................................................................................................................................1

Airlines

2

REPORT COVERAGE ....................................................................................................................... 2 MARKET SECTORS .......................................................................................................................... 2 FORECASTS 2008 TO 2012 ............................................................................................................ 2
Table 1: Forecast Number of Passengers Uplifted by UK Airlines on Scheduled and Non-Scheduled Services (million), 2008-2012 ......................................................................... 3 FUTURE TRENDS .............................................................................................................................3 Long-Term Forecasts for Air Passenger Growth .............................................................................3 Oil Price Surge Threatens Airlines ...................................................................................................3 Open Skies Agreement — Phase 2 .................................................................................................. 4

Airports

5

REPORT COVERAGE ....................................................................................................................... 5 MARKET SECTORS .......................................................................................................................... 5 FORECASTS 2008 TO 2012 ............................................................................................................ 5
By Volume ......................................................................................................................................... 5 Table 2: Forecast UK Terminal Passengers, Aircraft Movements and Freight Moved at UK Airports (million, 000 and 000 tonnes), 2008-2012 ............................................................. 6 By Value ............................................................................................................................................6 Table 3: Forecast UK Airport Revenue (£m), 2008-2012 ................................................................ 6 FUTURE TRENDS .............................................................................................................................7 Long-Term Forecasts for Air Passenger Growth .............................................................................7 BAA Expansion Plans ........................................................................................................................7

Automative Services

9

REPORT COVERAGE ....................................................................................................................... 9 MARKET SECTORS .......................................................................................................................... 9
Car Servicing and Mechanical Repairs............................................................................................. 9 Franchised Car Dealers .....................................................................................................................9 Independent Garages.....................................................................................................................10 Garage Chains and Autocentres ....................................................................................................10

© Key Note Ltd 2009

..............................................................................................................................................................................................................................18 Categories of Visitor..............................................................................................................................................................................................................................21 Table 7: The Forecast UK Market for Domestic Business Travel by Volume and Value (000 trips and £m)........15 Table 5: The Forecast Total Bus and Coach Services Market in Great Britain by Value at Current Prices (£m)..............12 Car Servicing and Mechanical Repairs.........................Market Forecasts: Transport...........................................................................................................................13 2-Year MOT Testing...............................................18 Tourism...................................................................................11 Table 4: The Forecast UK Market for Automotive Services by Sector by Value (£m).................................................................17 Targets for Public Transport .............19 The Supplying Sectors ...............................................15 MARKET SECTORS .......................................................................................................11 FORECASTS 2008 TO 2012 .. Years Ending March 2009-2013 ..............................................................................................................................................................................................16 Table 6: Local Bus Services in Great Britain — Forecast Number of Passenger Journeys by Area (million and %)...............................................................20 Other Services ................................................................................................................18 Published Tourism Statistics .............................................................................................................................................................................................................................................................................19 Categories of Tourism Expenditure.....................................................................................................12 Car Body Repairs..................................................................... 16 FUTURE TRENDS ................................20 Travel-Management Companies........................................................................................................................................................................................................................................14 Bus & Coach Operators 15 REPORT COVERAGE .........................................15 FORECASTS 2008 TO 2013 ..................................................................................................................................................................18 Purposes of Tourism .................................13 Falling Car Sales Predicted ..................................................................................................20 FORECASTS ............17 Business Travel Market 18 DEFINITION ...........................................................................................20 Accommodation ........................................................................................................................................................................................................................................... Travel & Tourism Contents Fast-Fit Centres .............................................................................14 BSI’s Kitemark for Garage Services ........ 2008-2012 ......................................................................................................................................20 Transport Services....................10 Mobile Service Units ..............................................................................18 Forms of Tourism ..............................................................................................................................................11 Car Breakdown and Recovery Services.........................................................................................13 FUTURE TRENDS ..............................................................................................................................................................12 Car Breakdown and Recovery Services............................................................................13 Consolidation Expected in Bodyshop Sector...................................................... 2008-2012 ........................... Years Ending March 2009-2013 ....21 Domestic Business Travel.............................................................21 © Key Note Ltd 2009 ............................................................................................................................................................................................................................................11 Car Body Repairs........................................................

.....................................33 Table 11: Forecast Number of Cruise-Holiday Passenger Bookings Worldwide by Region (million and %).............41 © Key Note Ltd 2009 ................29 Overcapacity ........................................27 Building Ships ............23 Courier & Express Services 24 REPORT COVERAGE ... Travel & Tourism Contents Outbound Business Travel.............................................................................................................................................................................................................. 2008-2012 ................................. Norway................ 2008-2013 ...........................................................................................24 Other Courier and Express Services ................................................................................................................................................................32 Around the World ..........24 FORECASTS 2008 TO 2012 .......41 The Environment ..................................25 Table 10: The Forecast UK Postal and Courier/Express Services Market by Sector by Value at Current Prices (£m)..... 2008-2012 .............27 Aker Yards.............................................................................................................................................................................Market Forecasts: Transport......................................................................................29 Identities and Trends......................................................23 Table 9: The Forecast UK Market for Inbound Business Travel by Volume and Value (000 visits and £m).......29 Meyer Werft.............................22 Inbound Business Travel.................................................................. Germany ............................................................................................................................................................................................................................................................................................................30 Caution.............................................39 FORECASTS ...................................................................................................................................................................33 Key Points........................................................................................................................................................................................... 2008-2012 .......................28 Fincantieri..................................................................................................................26 Demographic Trends ................................................................................................................................ 2008-2012 ......22 Table 8: The Forecast UK Market for Outbound Business Travel by Volume and Value (000 visits and £m)..............................................26 Acquisition and Merger Activity.............................................................................................................................................. 25 FUTURE TRENDS ..............................................................................................................................................................................................................................39 Market Forecasts..........................................................................39 Table 12: The Forecast UK Short-Break Holiday Market by Volume and Value (million trips and £m).......................................................................................36 European Short Breaks 39 DEFINITION ..................... Italy .......40 Economic Conditions ...................24 MARKET SECTORS .......................................24 National Post...............................................................................................................................................................................................................................................................................26 Cruise Market 27 DEFINITION ......................27 FORECASTS ...................................................................................................................................................................26 Environment ......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

.............55 FUTURE TRENDS ......................................................................................................................................................................................................52 Hotels 53 REPORT COVERAGE .........45 Transport Principals ............................................................................................................................................................................................... Travel & Tourism Contents Holidaying at Home ............................................................................................................46 Freight Forwarding...................................................................................................................................................................................................................44 MARKET SECTORS .................................. % and index 2000=100).............................51 Emissions Trading ..........................................................................................................................................................................53 MARKET SECTORS ...................................................................................50 A Changing Role for the Forwarder.............. 47 International Road Freight .................................................................................................................46 International Freight Services ..............................................................45 FORECASTS 2007 TO 2011 ..............................................................................51 Environmental Concerns .................................................................48 International Rail Freight............................................................................................................................................................................................................51 Sustainable Mobility.................................................................................................................................................................................................................................50 Globalisation......................................................41 Other Future Factors ...................................................................................................................................48 Table 15: The Forecast UK Transport Principals Sector by Subsector by Value at Current Prices (£m and %)....................................................................................45 Freight Forwarding.................................................... 47 Table 14: The Forecast UK Freight Forwarding Sector by Value at Current Prices (£m and %).................................................48 International Air Freight ....................................................................54 Consumer .54 Corporate ....................................................................................................................................................................................................................................................................................................46 Table 13: The Forecast Total UK International Freight Services Market by Value at Current and Constant 2000 Prices (£m..............................................................................................................................................................................................................................................................................................................................................................................................................................................49 EU Transport Policy..................................................................................51 IT .................................. 49 FUTURE TRENDS ....................................................................54 FORECASTS 2008 TO 2012 .......................................................................42 Freight Forwarding 44 REPORT COVERAGE .........................49 EU Expansion ............................................................................ 2007-2011 ................ 2008-2012 .........................................................................................................................................................50 Consolidation in the Forwarding Sector ........................ 2007-2011 .............................................................................. 47 Transport Principals ...................................................... 2007-2011 .........................................................54 Table 16: The Forecast UK Hotel Market by Value at Current Prices (£m).............................................47 International Sea Freight ..... 52 Security.............................................................................................................................55 © Key Note Ltd 2009 .............................Market Forecasts: Transport........

.........................................................................................................................64 Thameslink Programme ................................................................................................ Travel & Tourism Contents Rail Travel 56 REPORT COVERAGE .........................61 Network Rail Targets.......................................................60 Table 18: Forecast UK Resident Population by Sex (000 and %).............................................63 Cross River Tram .64 Other Continuing Issues ...................63 Docklands Light Railway Extensions...............................61 International Terrorism ......................................................................61 Regulatory Policy Framework ........................................................................................................................................................................................................................63 Modernisation and Investment Projects .................................................61 White Paper — Delivering a Sustainable Railway ......................................................................................................................................................................................................................................60 Demographics ..........58 International Rail Services............................................................................................................................................................................58 Northern Ireland.........................................................................................................................................................63 Croydon Tramlink ................................................................................................................ Years Ending March 2008-2012 ..............................................................66 MARKET SECTORS ........................................................................................ 60 Political Uncertainties...............................................58 FORECASTS 2008 TO 2012 ..............................59 FUTURE TRENDS ................................................................................... Mid-Years 2008-2012 .......................................56 Definitions (Standard Industrial Classification) .....................62 Eurostar ..............................................................62 Renaissance Trains .......................................................................................................................................................................................................................................63 Crossrail ...........56 Report Structure ......................................................................62 Technological Changes.................................................................................................................................................57 Mainline Rail Services .....................................66 Domestic Tourism ............................................................................................................................................64 West Coast Main Line.................................................................66 Outbound Tourism ......................................................62 Rail Competition.........................................................................................................................................................................................................................................................................................................................................................63 Edinburgh Light Rail...............................................................................Market Forecasts: Transport..............................................................................62 New Services ................................................................................................................................................................................58 Table 17: Forecast Passenger Receipts on UK Rail Systems at Current and Constant 2003 Prices (£m)..................................................................................................................................................................................................................................................................................................57 Urban Rail Services ............................57 National Rail Infrastructure .............................................................................................................................................................65 Travel Agents & Overseas Tour Operators 66 REPORT COVERAGE ......................................................................................................................................64 Rolling Stock ..............................................................................................................63 Transport for London .56 MARKET SECTORS ......................................................................67 © Key Note Ltd 2009 ................................................................................................................................................................................................................................................................................................................................

.................................................................................................................................................................................................................................................................................................................................................................................. 2008-2012 ..............71 E-Commerce Bookings Continue to Rise ......................................................................................................................................................................................................................................................... 000 and million).....................................................................69 Domestic Tourism .......................................................................................................................................................................................................70 TUI Aims to Reduce Capacity in the UK .......................................72 Table 22: The Forecast Apparent UK Market for Rubber Tyres and Tubes by Value (£000 at msp).....................74 World Tyre Production Set to Increase...........................................................................................................................................................................................74 Kwik-Fit ......................72 FORECASTS 2008 TO 2012 ..................................................................................67 The Total Market .................................................................70 FUTURE TRENDS .........................................................................................................74 UK Tyre Retailers Revamp Their Operations...................77 Key Note Research The Key Note Range of Reports 78 79 © Key Note Ltd 2009 ........................................................................................73 FUTURE TRENDS ........................ 2008-2012 .69 Table 21: The Forecast UK Domestic Travel and Tourism Market by Value and Volume (£m.........................................................................................................................75 National Tyres and Autocare .......................................Market Forecasts: Transport..........................................................................................................................................73 Leading Tyre Manufacturers Increase Their Presence in Asia.....................................74 HiQ...............................................................72 MARKET SECTORS ...................... 2008-2012 .........................................................................77 Table 23: The Forecast UK Market for Vehicle Recovery Services by Value (£m).................................................... 000 and million).....................................76 MARKET SECTORS ................71 Tyre Industry 72 REPORT COVERAGE ..................................................................................... 2008-2012 ............73 UK Vehicle Production is Ahead in the First 9 Months of 2007........................................................................................................................................75 Vehicle Breakdown Services 76 DEFINITION ......................................................................................................76 FORECASTS ............................................. Travel & Tourism Contents FORECASTS 2008 TO 2012 ...................................................70 Airlines Are Under Pressure ..................................................................................................................................................67 Table 19: The Forecast UK Resident Tourism Market by Sector by Value (£m and %)..................68 Table 20: The Forecast UK Outbound Travel and Tourism Market by Value and Volume (£m............................... 2008-2012 ..............................68 Outbound Tourism ...................................................

The market forecast data and commentary in the text were correct at the time the individual reports were initially published. Market Report Pluses and Market Assessment reports published in 2008. and have not been revised for this edition.Market Forecasts: Transport. This report covers Key Note titles relating to transport. travel and tourism: Publication Report Type Report Title Airlines Airports Automative Services Bus & Coach Operators Business Travel Market Courier & Express Services Cruise Market European Short Breaks Freight Forwarding Hotels Rail Travel Travel Agents & Overseas Tour Operators Tyre Industry Vehicle Breakdown Services Market Report Market Report Market Report Market Report Market Assessment Market Report Market Assessment Market Assessment Market Report Market Report Plus Market Report Market Report Market Report Market Assessment July June May December October September April August February November May November January May Month © Key Note Ltd 2009 1 . Travel & Tourism Introduction Introduction OVERVIEW This Key Note Market Focus report is a compilation of Key Note Market Reports.

The number of passengers travelling on scheduled flights is forecast to rise by 15% between 2008 and 2012.6% to 27 million. Key Note projects. © Key Note Ltd 2009 2 .3% increase on 2008. while the number of passengers travelling on non-scheduled service is forecast to fall by around 6. By 2012.9% to 2% in 2008 and 2009.Market Forecasts: Transport. although the financial impact of this is small when compared with revenues attributed to passenger travel. but then demonstrate higher levels of annual growth rates up to 2012. that the rate of growth in passenger numbers will slip to around 1. Travel & Tourism Airlines Airlines REPORT COVERAGE This analysis covers the market for UK airlines. therefore.5 million. Key Note forecasts that passenger numbers will reach 147. In terms of market size it can be split into four main categories: • by type of service (scheduled and non-scheduled) • by nationality of airline (passenger and cargo transport) • by origin of traveller • by destination of traveller.5 million. MARKET SECTORS The airlines market can be broadly divided in two different ways: • scheduled and non-scheduled services • domestic and international services. Freight is also carried on these passenger services. a 10. to 120. FORECASTS 2008 TO 2012 Although long-term growth in demand for air transport is projected. The main function of UK airlines is the provision of air transport for passengers from and within the UK. growth rates in the short to medium term could be affected by the general slowdown in the economy and by the rising cost of air travel.

8 108 111. however.9 28.8 116. merge or possibly go out of business. If the price of oil does remain high. The factors influencing these forecasts include GDP growth. BA has already said that it will struggle to break even.4 2.7 27.4 27. in its December 2006 publication The Future of Air Transport Progress Report. suggests that demand for air travel in the UK could increase to 465 million passengers by 2030. the cost of oil.4 27. consumer attitudes towards air travel and the cost involved with carbon and climate-change measures and legislation.5m to its costs.7 28. Oil Price Surge Threatens Airlines A large proportion of the world’s airlines are expected to make significant financial losses if oil prices stay at their current level.0 120.6 2.5 2009 2010 2011 2012 FUTURE TRENDS Long-Term Forecasts for Air Passenger Growth The Department for Transport (DfT). is that the current high price of oil is not sustainable and that prices will drop back to below $100 a barrel by the end of the year.Market Forecasts: Transport.0 2.9 139. exchange rates. every rise of around $1 in the cost of oil adds £2.9 2. with oil above $120 a barrel and easyJet has warned that. Travel & Tourism Airlines Table 1: Forecast Number of Passengers Uplifted by UK Airlines on Scheduled and Non-Scheduled Services (million).4 136. Ryanair also expects the current price of oil to add €400m to its operating costs in 2008. 2008-2012 2008 Passengers Uplifted (million) Scheduled services Non-scheduled services Total % change year-on-year Source: Key Note 1.9 133. air fares.0 147. on top of this.5 104. then more airlines will be forced to cut capacity. The hope. © Key Note Ltd 2009 3 . if growth is supported by the developments detailed in the 2003 White Paper The Future of Air Transport.4 143.

Market Forecasts: Transport. Travel & Tourism Airlines Open Skies Agreement — Phase 2 New talks between the EU and the US could create a full-blown open aviation area between the EU and US and also pave the way for a wave of transatlantic airline takeovers. which cover the second phase of the Open Skies Agreement. The first phase of the Open Skies Agreement also failed to break down barriers that prevent EU carriers flying within the US domestic market. which prevent EU carriers acquiring US rivals — and vice versa. © Key Note Ltd 2009 4 . will discuss matters such as the draconian ownership rules. The new talks. Both BA and Virgin Atlantic have repeatedly called for such protectionist rules to be swept away.

to 245. Military airports and civil airports serving only light aircraft are excluded from this analysis.Market Forecasts: Transport. By 2012. © Key Note Ltd 2009 5 . the volume of freight moved is forecast to reach 2. with similar levels of year-on-year growth anticipated for the remainder of the forecast period.2% in 2008. Airport services are also provided by third-party organisations that rent or lease property from the airport operator. catering and baggage handling.5% is projected for the remainder of the forecast period (2008 to 2012).5 million (see Table 2). Other services offered by airports include retailing. bringing the number of passengers to 268. to 3. This will result in overall growth of 1%. year-on-year growth of between 2% and 2.7 million in 2012.5 million in 2012 and resulting in overall growth of 9. Thereafter. The freight market showed a slight increase in 2007 and. Commercial revenues cover retail services and related operations.7 million. raising the number of aircraft movements to 3. whereas aviation revenues cover airport traffic and related charges.9% higher than the 2008 level.4 million tonnes. although some further recovery might be witnessed between 2008 and 2012. FORECASTS 2008 TO 2012 By Volume Key Note estimates that the number of passengers at UK airports will rise by 2% in 2008. The balance between aviation and commercial revenues can vary considerably between airports. MARKET SECTORS The two main sources of income for commercial airports are commercial revenues and aviation revenues. Commercial airports in the UK are licensed to operate landing and take-off facilities for scheduled and charter airlines providing passenger and freight services. which would be just 0. The number of aircraft movements at UK airports is forecast to increase in 2008 by a modest 0. Travel & Tourism Airports Airports REPORT COVERAGE This analysis provides an overview of the UK airport industry. the rate of growth is expected to be fairly subdued.4%.

5 2.2 2.480 2012 3.346 2011 3.0 4.3 3.12bn in 2008. total revenue is projected to reach £3.2 3.0 2. Travel & Tourism Airports Table 2: Forecast UK Terminal Passengers.8 4.330 0.224 2010 3.115 2009 3.684 0. 000 and 000 tonnes).2% higher than 2008 forecasts.350 0. Table 3: Forecast UK Airport Revenue (£m).2 3.5 3.3 268.62bn.2 2.340 0.2 2. aided by the increases in aviation charges above the rate of inflation that the CAA has determined London Heathrow and London Gatwick can levy. 2008-2012 2008 Revenue (£m) % change year-on-year Source: Key Note 3.0 2.2 262.666 0.620 © Key Note Ltd 2009 6 . These increases are also expected to support airports’ revenues for the remainder of the review period and.5 2.673 0. by 2012. the total revenue generated by UK airports is forecast to rise by 3.5 3.3 245. Aircraft Movements and Freight Moved at UK Airports (million.345 0. which would be 16.659 0.695 0.2 2.0 256.5 2.0 250.335 0.0 3. 2008-2012 2008 Terminal passengers (million) % change year-on-year Aircraft movements (000) % change year-on-year Freight moved (000 tonnes) % change year-on-year Source: Key Note 2.5 2009 2010 2011 2012 By Value As Table 3 shows.Market Forecasts: Transport.5% to £3.2 3.2 3.

The expansion will involve a £300m investment by 2016.Market Forecasts: Transport. if growth is supported by the developments detailed in the 2003 White Paper The Future of Air Transport. The proposals also include the construction of the T5C satellite building and the development of a new terminal to replace Terminal 2 — Heathrow East. plane stands and taxiing facilities. airfares. Existing planning approvals provide for approximate passenger-traffic growth at Heathrow (including Terminal 5) to 90 million a year. plans largely focus on the expansion of the North Terminal. in its December 2006 publication The Future of Air Transport Progress Report. The factors influencing these forecasts include GDP growth. Edinburgh Airport aims to be handling 26 million passengers a year by 2030 (up from 9 million in 2007). the cost of oil. At Gatwick. which is expected to commence in either late 2008 or early 2009. along with the £210m Glasgow Airport Rail Link. such as runway 3 at Heathrow. Travel & Tourism Airports FUTURE TRENDS Long-Term Forecasts for Air Passenger Growth The Department for Transport (DfT). Plans are also well developed for the transformation of Heathrow. which includes the provision of a second runway and terminal. at Gatwick to around 40 million and at Stansted to around 25 million. BAA Expansion Plans The current capital-investment plans for London Heathrow and London Gatwick in the period 2008/2009 to 2017/2018 are forecast to be in excess of £15bn (at 2007/2008 prices). In March 2008. new maintenance hangars. suggests that demand for air travel in the UK could increase from 228 million passengers in 2005 to 465 million passengers by 2030. in 2008. consumer attitudes towards air travel. © Key Note Ltd 2009 7 . depending on the outcome of certain planning applications. exchange rates. although. a major expansion of Edinburgh’s international route network. the South Terminal departure-lounge extension will be completed and work will begin on the inter-terminal track transit system. an expansion of the cargo base and targets to improve public transport to and from the airport. The proposal will be subject to a separate planning inquiry. following the opening of Terminal 5. the cost of carbon and climate-change thinking. and an initial capacity for around 10 million passengers per year. which includes expanded terminal facilities. BAA submitted a planning application to the local council. Glasgow Airport is also in line for a major facelift. and will include the configuration of Terminal 1 to accommodate the STAR Alliance (an association of airlines) and the refurbishment of Terminals 3 and 4.

Total investment over the following decade (up to 2016) will amount to around £60m. Travel & Tourism Airports The revised Master Plan for Aberdeen Airport predicts that. which will include runway extension and an expanded international arrivals hall.Market Forecasts: Transport. © Key Note Ltd 2009 8 . by 2015. the terminal could be handling 4 million passengers. with as many as 5.9 million by 2030. 2-year international development plan (announced in December 2006). Aberdeen will also benefit from a £10m.

Travel & Tourism Automative Services Automative Services REPORT COVERAGE This analysis of the automotive services market deals primarily with the aftermarket for cars. The financing. insurance and leasing of motor vehicles and the manufacture are not included in this analysis of automotive services. Cost is a key factor. franchised dealers have lost a lot of routine (but highly profitable) business to the fast-fit chains and independent garages. © Key Note Ltd 2009 9 . It covers the following sectors: • car servicing and mechanical repairs • car body repairs • car breakdown and recovery services. In addition to providing routine maintenance and repairs. training for the dealers’ mechanics. MARKET SECTORS Car Servicing and Mechanical Repairs Car servicing and mechanical repairs are provided by a wide range of organisations. including franchised car dealers. most of the largest franchised dealers have facilities for minor and major car body repairs at fully equipped central workshops. To widen their appeal to prospective customers. and franchised car dealers undertake much of the work. sometimes.Market Forecasts: Transport. fast-fit centres and mobile service units. Franchised Car Dealers New cars are generally sold with a free 3-year/60. garage chains and autocentres. Despite these advantages. Regular maintenance is usually a condition of this warranty.000-mile warranty. since the prices charged by franchised dealers are often higher than those charged by non-franchised garages. This sector is highly competitive. Manufacturers provide technical support and. so the quality of service and the equipment available in these outlets are usually of a high standard. The long service intervals for modern cars have also affected the workload of franchised garages that rely on warranties for the bulk of their revenues. independent garages. some franchised dealers are willing to service other makes of vehicle. owing to the large number of service providers in most regions of the UK.

and MOT facilities that can cope with the latest upgrades in standards. © Key Note Ltd 2009 10 . Fast-Fit Centres Fast-fit centres provide unscheduled drive-in services for the replacement of items such as tyres. Some also offer other services. exhausts and brake pads. The larger independent garages have better prospects. such as clutch replacement and steering alignment. Garage chains and autocentres are popular with customers because they offer quick service. Garage Chains and Autocentres Garage chains and autocentres are operated by a range of organisations.Market Forecasts: Transport. which can require heavy investment in specialised equipment and access to technical information. Customers are also more likely to take out-of-warranty cars to these operators. Many of the smaller garages are excluded from the lucrative MOT market. They usually operate in a repair market. a variety of staff with a wide range of skills. so these operators work mainly on older vehicles. including car manufacturers. These outlets usually provide a drive-in service similar to that offered by the fast-fit chains (see the following subsection). Unless a large volume of business is guaranteed. their expertise and level of investment in equipment vary considerably. as they have the necessary equipment. As a result. a wide choice of replacement items and fixed-cost ‘menus’ for general repairs and routine servicing. They have a lower cost base than other operators. because they need official authorisation to issue certificates. tyre manufacturers. Travel & Tourism Automative Services Independent Garages Independent garages range from one-man operations to organisations with several outlets. Difficulties in obtaining technically advanced parts can also create problems for independent garages and limit their ability to undertake more than just routine repairs. since the workforce needed to perform these relatively simple tasks needs less training and experience. As a result. but they also undertake MOT tests and will service most makes of car. the costs are likely to be too high for a small operator to bear. franchised dealers and independents. Although most garages are prepared to service most makes of car. servicing and repairs are not particularly profitable activities for many of these outlets. some are restricted by the increasing technical complexity of modern vehicles. The parts they fit are less likely to be required for cars that are under 3 years old. To obtain this authorisation requires the installation of expensive equipment and the employment of personnel who are qualified to perform the various tests. where cost is very important — especially in the case of the second or third buyer of a relatively low-age car. Fast-fit chains have become a more prominent part of the market in recent years.

Slowing economic growth. Car Body Repairs Car body repair is an important sector of the industry. The price of the basic service tends to be low and. because they effectively control the prices paid for repair work when insurance claims are involved. accordingly. Since the mid-1990s. When they are used. as tight budgets have been imposed by insurance companies. are members of breakdown and recovery organisations. © Key Note Ltd 2009 11 . Insurance companies have an important role in this market. They have millions of subscribers and operate fleets of fully equipped repair vehicles. to 2. rather than spend money repairing them. relatively high interest rates and weakening consumer confidence will all contribute to the fall. Travel & Tourism Automative Services Mobile Service Units Motoring organisations such as the AA and the RAC are the main providers of mobile repair services.7% in 2008. and a relatively small number of organisations (including franchised and independent garages) are involved in the market. when vehicles are unexpectedly immobilised at home or by the roadside.3 million units. but the industry pioneers — the AA and the RAC — remain the leading operators and the best-known names in the sector. Some of these are only partly related to the main business.Market Forecasts: Transport. Other organisations. owing to the increasing number of cars on UK roads. making the work uneconomical for some firms. Car Breakdown and Recovery Services A large majority of the motoring public. owing to the difficulty in obtaining business. Outside of these networks. FORECASTS 2008 TO 2012 The Society of Motor Manufacturers and Traders (SMMT) predicts that the number of new car registrations in the UK will fall by around 2. the vehicle manufacturers are expected to offer attractive finance deals to generate sales and launch a range of new models. and most owners and operators of commercial vehicles. independent operators of mobile service units are comparatively rare. The services offered by these companies range from basic roadside assistance and ‘home start’ to the transportation of a broken-down vehicle and its passengers to their destination. it is most likely to be for emergency work. On the plus side. but they often generate more revenue and profit. the number of body repair shops operating in the UK has fallen. The number of organisations offering these services has grown over the past 25 years. as the insurance companies are often inclined to scrap damaged cars. such as Green Flag. rather than operating their own patrols. however. manage national networks of independent recovery agents. The rapidly declining value of used cars also creates problems for bodyshops. Much of the repair work undertaken requires expensive specialist equipment and expertise. many breakdown and recovery organisations offer their members a range of additional services.

to reach £5.8 1.07bn. 2008-2012 2008 Car servicing and mechanical repairs Car body repairs Car breakdown and recovery services Total % change year-on-year Source: Key Note 1. to £4. and continue to increase in value year-on-year for the remainder of the forecast period.3%. to £16. to £11. before rising by 12. remain popular and these are expected to show sales growth and increase their share of new vehicle sales.6% across the forecast period. the steady rise in the number of cars on the road and the revenues generated by MOT testing and repairs.420 5.940 10.56bn in 2012).277 3. Travel & Tourism Automative Services Fuel-efficient vehicles.5 1.Market Forecasts: Transport.0 1.670 5. to £10.267 16.540 18.840 3.77bn in 2012 and overall growth of 15. Thereafter. plus the need for car owners to have their vehicles regularly maintained. Other factors expected to support demand for automotive services include the continued high volume of used-cars sales.090 10.28bn (see Table 4).67bn. This would increase the value of the sector over this period by 15. the market is forecast to grow by 3.770 3. Helping to generate turnover in this sector is the relationship between the volume of accidental damage that necessitates repair work and increases in the number of cars on the road.560 2009 2010 2011 2012 Car Servicing and Mechanical Repairs The car servicing and mechanical repairs sector is forecast to grow by 3% in 2008.397 17.5 1. The sector will continue to benefit from the expected increase in the number of cars on the road.240 11.9%. Key Note forecasts that the market for automotive services will increase in value by 3% in 2008.087 3.5% to 3. resulting in a market value of £18.070 4.220 5.330 16.427 3.8 10.8% per year.790 5. Table 4: The Forecast UK Market for Automotive Services by Sector by Value (£m).5% in 2008. Dampening the potential for higher levels of market growth are the rapidly falling values of new and used © Key Note Ltd 2009 12 . including lower-medium-sized vehicles and diesel-powered vehicles.400 11.94bn.467 18. Car Body Repairs The car body repairs sector is forecast to increase in value by 2.

Market Forecasts: Transport.27bn in 2008.022 people between 1st February and 10th February 2008. the decision by Zurich Insurance to appoint four bodyshop groups to handle all of its repair work — and to reward these companies with 5-year contracts — is seen as paving the way for consolidation and amalgamation in the body repair market. increased by 10% in the year ending February 2008. For example. suggests that 6. The Index. FUTURE TRENDS Falling Car Sales Predicted The Sainsbury’s Finance Car Buying Index confirms that car sales could fall between March and August 2008. The research further indicates that the overall cost of motoring.5%. Increases in the number of motorists and vehicles on UK roads should help to maintain growth in this sector and the relatively low cost of the basic breakdown and recovery service also enhances its appeal among many motorists. with the reduction being due to a mixture of factors. insurance and fuel. following a 5% increase on 2007. as the number of people planning to buy falls.54bn. especially older vehicles. to £1. rather than repair them. which is around 1 million fewer than in the preceding 6-month period from September 2007 to February 2008. Car Breakdown and Recovery Services The value of the car breakdown and recovery services sector is forecast to reach £1. The Sainsbury’s Finance Car Buying Index also suggests that the total amount expected to be spent on cars and car purchases between March and August 2008 will be at its lowest level since March 2005. partly as a result of insurance companies favouring the larger bodyshop groups. Travel & Tourism Automative Services cars and the tendency of insurance companies to write off damaged vehicles. © Key Note Ltd 2009 13 . between 2009 and 2012. before rising steadily. including servicing. Consolidation Expected in Bodyshop Sector Consolidation is expected to be a feature of the UK bodyshop sector in 2008. such as concerns about economic pressures and environmental anxieties. by a total of 21. which is based on research conducted by TNS among 2.9 million people plan to buy a car between March 2008 and August 2008.

© Key Note Ltd 2009 14 . an MOT test is required once a vehicle is 3 years old and annually thereafter. which is intended to raise standards in vehicle service and repair. BSI’s Kitemark for Garage Services The British Standards Institution (BSI) still hopes to raise the number of garages that join its Kitemark for Garage Services scheme.Market Forecasts: Transport.000 garages in the UK. Currently. a practice that damages the overall trade’s image. However. with subsequent tests being required every 2 years. The Kitemark scheme aims to act as a counter against the increasing number of ‘horror stories’ in which consumers are ‘ripped-off’ by rogue garages. testing stations could be badly affected by the loss of business and many might be forced to close. Should the extended testing interval be introduced. the Government is considering extending the period before which the first test is required to 4 years. and further large-scale representation is needed. this still only represents around 1% of the 18. Although around 150 licensees have signed up for the scheme. Travel & Tourism Automative Services 2-Year MOT Testing The MOT servicing industry remains concerned that the Government will introduce extended testing intervals.

Market Forecasts: Transport. MARKET SECTORS There are three main types of bus and coach services: • local timetabled services • long-distance scheduled services (non-local services) • excursion/holiday services.72 billion journeys taken in the year ending March 2008. Excursion and holiday services are considered to be part of the holiday market and are therefore not covered in this analysis. partnerships with local authorities. © Key Note Ltd 2009 15 .2% share for buses and coaches (according to National Statistics’ Annual Digest of Statistics).8% share of the 812 billion passenger kilometres made in that year. trains held a slightly larger share of the public transport market than buses in 2006. and will be worth approximately £7. with a 6. Travel & Tourism Bus & Coach Operators Bus & Coach Operators REPORT COVERAGE This analysis assesses the market for bus and coach operators in Great Britain. compared with a 6. The factors that are expected to aid this increase over the forecast period include: additional travel under concessionary fare schemes. FORECASTS 2008 TO 2013 Key Note forecasts that the value of the total bus and coach services market will increase to around £6.63bn in 2008/2009 (year ending March). and some moves by consumers to public transport as a result of rising motoring costs and concerns about the environment. Measured in terms of passenger kilometres.92bn by 2012/2013. According to the Department for Transport (DfT).9%) of the 7. accounting for around two-thirds (66. local buses are the most significant form of public transport in terms of passenger journeys.

130 1.135 1. excludes public transport support Source: Key Note On the downside.130 1. Years Ending March 2009-2013 2008/ 2009 Passenger Journeys (million) England London English PTE areas English non-PTE areas Table continues.305 2. although most of this rise is anticipated to take place in the London area.120 1.245 1. and.860 6.305 2009/ 2010 2010/ 2011 2011/ 2012 2012/ 2013 © Key Note Ltd 2009 16 .620 1..350 1. Key Note forecasts that the number of passenger journeys carried out on local bus services between 2008/2009 and 2012/2013 will increase.380 1.180 1.900 6.060 1.300 1. Table 6: Local Bus Services in Great Britain — Forecast Number of Passenger Journeys by Area (million and %). patronage outside London is expected to resume its long-term decline due to increases in car ownership and in bus-operating costs.310 2. this is likely to be diluted over time by increasing levels of car ownership among older people..980 7.600 2012/ 2013 5. 2.900 2.345 1. the behavioural changes due to concessionary fare changes in 2006/2007 and 2008/2009 are expected to have largely occurred in the first 2 to 3 years. Travel & Tourism Bus & Coach Operators Table 5: The Forecast Total Bus and Coach Services Market in Great Britain by Value at Current Prices (£m). In the longer term.630 2009/ 2010 5.290 2011/ 2012 5.125 1.315 2. Journey numbers in other parts of Great Britain are expected to show lower rates of growth. Years Ending March 2009-2013 2008/ 2009 Local services† Non-local services Total 4. or to fall back a little.Market Forecasts: Transport.940 7.770 1.920 † — includes passenger receipts and concessionary fare reimbursements.310 2.020 7. although the resulting higher level of bus use by elderly pass holders may continue.960 2010/ 2011 5.

• Accessibility — the aim is to ensure that the proportion of the full-size bus fleet that is fully accessible by wheelchair users reaches 50% of all vehicles by 2010.685 525 124 5. • Reliability — Confederation of Passenger Transport UK (CPT) member operators are working towards a target that requires them to run 99.252 4. Years Ending March 2009-2013 . which are mainly used for local bus services.5% of their scheduled mileage services. Travel & Tourism Bus & Coach Operators Table 6: Local Bus Services in Great Britain — Forecast Number of Passenger Journeys by Area (million and %).785 535 125 5. except where this is affected by factors beyond their control..) • Passenger information — the target for operators in England is to achieve year-on-year improvement on information at bus stops.Market Forecasts: Transport.750 530 124 5. based on DfT passenger satisfaction ratings.334 4.table continued 2008/ 2009 Passenger Journeys (million [cont.404 4. © Key Note Ltd 2009 17 .. accessibility and passenger information. fleet age. with 2000/2001 as the starting point.610 520 122 5. • Fleet age — the CPT has committed its members in Great Britain to a target that aims to achieve and maintain an average fleet age of 8 years or less for their vehicles.805 540 126 5.471 2009/ 2010 2010/ 2011 2011/ 2012 2012/ 2013 PTE — Passenger Transport Executive Source: Key Note FUTURE TRENDS Targets for Public Transport The Department for Transport’s (DfT’s) Spending Review has national targets for increasing public transport bus use over the decade to 2010/2011.]) Total England Scotland Wales Total Great Britain 4. with 62% of full-size buses currently having low-floor wheelchair accessibility [in the year ending March 2008].445 4. This includes improving performance in areas such as reliability. (This target has already been met.

business travel or tourism is defined as a component of tourism demand that includes travel away from home.Market Forecasts: Transport. either in the country of residence or abroad. business and other purposes’. travel and tourism is defined in accordance with the criteria recommended by the World Tourism Organization (UNWTO) and adopted by the United Nations Statistical Commission in March 1993. © Key Note Ltd 2009 18 . In accordance with this definition. Categories of Visitor Visitors are defined as all travellers engaged in tourism. Purposes of Tourism Several purposes of visit are distinguished. These are: • leisure. but excludes the journey to work. It should be noted. airline pilots. Tourism is defined by the UNWTO as comprising ‘the activities of persons travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure. migrant workers. lorry drivers. Forms of Tourism The following forms of tourism can be identified in relation to a given country: • domestic tourism — travel by the country’s residents within that country • outbound tourism — travel by the country’s residents to other countries • inbound tourism — travel to the country by residents of other countries. including business travellers. Travel & Tourism Business Travel Market Business Travel Market DEFINITION Tourism In this analysis.g. recreation and holidays • visiting friends and relatives • business and professional • health treatment • religion/pilgrimages • other. that some travellers (e. however. ships’ crews and those travelling to their place of work) are not engaged in tourism and so are not classed as visitors.

Thus. the unit of measurement is the ‘trip’. who travels to a place within the country.Market Forecasts: Transport. © Key Note Ltd 2009 19 . In the case of international travel. outside his/her usual environment for a period not exceeding 12 months and whose main purpose of visit is other than the exercise of an activity remunerated from within the place visited’. Travel & Tourism Business Travel Market There are two main categories of visitor: • an international visitor — ‘any person who travels to a country other than that in which s/he has his/her usual residence but outside his/her usual environment for a period not exceeding 12 months and whose main purpose of visit is other than the exercise of an activity remunerated from within the country visited’ • a domestic visitor — ‘any person residing in a country. the basic unit of measurement is the ‘visit’ (where this is for 1 night or more) or the ‘day trip’ (where no overnight stay is involved). Similarly. Both international visitors and domestic visitors are further classified as: • overnight visitor (tourist) — a visitor who stays at least 1 night in collective or private accommodation in the place visited • same-day visitor — a visitor who does not spend the night in collective or private accommodation in the place visited. For domestic travel. culture and sporting activities • shopping • other. the number of domestic trips recorded over a given period may include multiple trips by particular individuals. Published Tourism Statistics Published statistics on domestic and international tourism do not normally consider the demographic characteristics of visitors but instead show the number of visits or trips made. an individual overseas or UK resident entering or leaving the UK more than once during a given period is recorded on the occasion of each visit. Categories of Tourism Expenditure The following categories of tourism expenditure are typically identified: • package travel (package holidays/package tours) • accommodation • food and drink • transport • recreation.

Private tourism accommodation mainly serves leisure travel markets.Market Forecasts: Transport. the hospitality industry is frequently involved in the provision of other services. If the employing company does not handle this function in-house. car-rental companies. banks and credit-card firms. where relatively short journeys are concerned. such as restaurant services and banqueting and conference facilities. © Key Note Ltd 2009 20 . Other Services Other suppliers to the tourism market include providers of global distribution systems. These are provided by transport principals. Private Tourism Accommodation • owned dwellings • rented rooms in family homes • dwellings rented from private individuals or professional agencies • accommodation provided without charge by relatives and friends • other. However. both at home and abroad. the private car is the dominant mode. Even where an overnight stay is not involved. Travel-Management Companies Although business travel may be organised by the person travelling. requires the supply of transport services. railway companies and ferry operators. mainly commercial airlines. Travel & Tourism Business Travel Market The Supplying Sectors Transport Services Business travel. but it is also used by some business travellers — particularly those employed by small and medium-sized enterprises (SMEs) or operating as sole traders. by definition. the service may be provided by a travel-management company. business travel also involves the supply of accommodation. The UNWTO classifies tourism accommodation under the following headings: Collective Tourism Establishments • hotels and similar establishments • specialised establishments (health establishments/work and holiday camps/ public means of transport/conference centres) • other collective establishments (holiday dwellings/tourist campsites/other). airports. by hoteliers and others. it is more typically arranged by someone who has been given that specific responsibility. Accommodation Where the visit requires an overnight stay.

Despite an expected modest recovery in this market from 2011 onwards.670 1.000 -1.0 1.3% per year. Table 7: The Forecast UK Market for Domestic Business Travel by Volume and Value (000 trips and £m).800 2.8 2012 0. the number of domestic business trips taken is forecast to remain static over the period from 2008 to 2012 as a whole. 2008-2012 Average Annual % Change 2008-2012 Trips (000) % change year-on-year Expenditure (£m) % change year-on-year 18.550 0.6 4.2 2010 18.5 2011 18.1 4.1 4. growth in expenditure is expected to be marginally positive over the period as a whole.9 2009 18.4 Note: excludes journeys not involving an overnight stay away from home.500 -3.300 -1.590 0.1 4. As average spending per trip increases.200 1. Travel & Tourism Business Travel Market FORECASTS Domestic Business Travel The slowdown in economic activity that has been experienced in 2008 is likely to be accompanied by a decline in domestic business travel. fuelled by inflation. at an average of 1.3 Source: Key Note © Key Note Ltd 2009 21 .6 4.500 1.600 0.Market Forecasts: Transport. 2008 18.

1 5.7 2010 10.500 1. Over the period from 2008 to 2012 as a whole.7 5.600 4.8 † — excludes payments for air and sea travel to and from the UK 2008 9.5 2009 10.5 2011 11.1 2012 5.850 4.100 5.900 9.600 7.1 7.4 7. Table 8: The Forecast UK Market for Outbound Business Travel by Volume and Value (000 visits and £m).9 6.570 0. with higher growth resuming as the UK economy recovers.1% per year.9% per year.Market Forecasts: Transport.9 Source: Key Note © Key Note Ltd 2009 22 . Travel & Tourism Business Travel Market Outbound Business Travel Growth in outbound business travel by UK residents is expected to slow throughout the remainder of 2008 and into 2009.300 7.800 6.5 6. with expenditure growing by 7. 2008-2012 Average Annual % Change 2008-2012 Visits (000) % change year-on-year Expenditure (£m)† % change year-on-year 9. Key Note forecasts that the number of trips taken will increase by an average of 5.600 10.

8 Source: Key Note © Key Note Ltd 2009 23 .650 8. Over the period as a whole.8 † — excludes payments for air and sea travel to and from the UK 2008 9.3 7.4% per year.3 5. growth in the number of trips taken is expected to average 6. 2008-2012 Average Annual % Change 2008-2012 Visits (000) % change year-on-year Expenditure (£m)† % change year-on-year 9.300 11.000 3. with recovery taking place towards the end of the forecast period.8 5.200 4.800 9.4 8. Travel & Tourism Business Travel Market Inbound Business Travel The rate of growth in the market for business travel to the UK by overseas residents is expected to slow in 2008 and 2009 as the world economy falters.Market Forecasts: Transport. with growth in expenditure averaging 8.1 6.270 0.0 2009 9.800 9.900 6.8% per year.1 2012 6.200 0.7 2010 10.5 2011 11. Table 9: The Forecast UK Market for Inbound Business Travel by Volume and Value (000 visits and £m).000 11.8 5.

etc. which supplies the need for rapid collection and delivery of documents and packages. the upper weight limit for items deemed to be ‘express’ is not precisely defined. Other Courier and Express Services This sector includes: • collection. This class excludes: • postal giro and postal savings activities. Modes of transport used by companies supplying this market range from scheduled airline services to dedicated specialist operations by road and air. parcels and other items with a high value-to-weight ratio and a time-sensitive delivery requirement. transport and delivery (domestic or international) of mail and parcels • collection of mail and parcels from public letter boxes or from Post Offices • distribution and delivery of mail and parcels • mailbox renting.Market Forecasts: Transport. transport and delivery of letters and mail-type parcels and packages by firms other than national post. Items covered by this definition include mail. many express carriers have expanded into other freight markets. and other financial activities carried out by national postal administrations. Travel & Tourism Courier & Express Services Courier & Express Services REPORT COVERAGE This analysis covers the UK market for courier and express services. MARKET SECTORS National Post This sector includes: • collection. In addition. while firms that once would have described themselves as road hauliers or freight forwarders have been redefined as express carriers. However. it should be noted that the boundaries between courier and express services and other parts of the UK freight logistics industry are not clearly defined. For example. Either only one kind of transport or more than one mode of transport may be involved and the activity may be carried out with either self-owned (private) transport media or via public transport © Key Note Ltd 2009 24 .

290 2012 8. could affect the rate of expansion in 2008. Table 10: The Forecast UK Postal and Courier/Express Services Market by Sector by Value at Current Prices (£m). Therefore.2 0.0 -1.9 0. owing to factors such as increased use in the alternative methods of communication and a growing environmental awareness.3 0.590 2010 8. FORECASTS 2008 TO 2012 Key Note forecasts that the value of the national post market will gradually decline between 2008 and 2012.24bn (see Table10).810 7. The value of the market for other courier and express services is forecast to show growth between 2008 and 2012.5 14.0 -1. Travel & Tourism Courier & Express Services • home-delivery services • city messenger and goods taxi services.150 6.120 -2.9 14.5% between 2008 and 2012.1 8.240 6.9 2. to around £15.6 15.5 14.720 2009 8.120 © Key Note Ltd 2009 25 .870 2.0 15.5 -2. 2008-2012 2008 National post % change year-on-year Other courier and express services % change year-on-year Total % change year-on-year Source: Key Note -0.100 4. the total UK market for national post and courier/express services is forecast to increase in value by 2.550 6.330 6.920 3.415 2011 8.Market Forecasts: Transport. including the slowdown in retail sales.3 0. which is expected to lead to a gradual reduction in the amount of paper used for mail communications. although the difficult economic climate in the UK.5 -2.965 4.

the transport and distribution industries will be affected significantly by any measures or regulations introduced to reduce such emissions. the acquisition or consolidation of small local or niche couriers is a constant feature of the market and is expected to remain so in 2008 and 2009. lead to an increased need for special handling services in the healthcare market. As a result of this ageing population. Acquisition and Merger Activity Europe is a key market for courier and express service providers and the acquisition of Europe-based companies. is an ongoing possibility. spending in areas such as healthcare is expected to increase significantly and could. in turn. with an increasing percentage of the population being over the age of 65. particularly by the large US operators that are looking to increase their presence in the European market. Since transport and distribution contribute to emissions that are considered by some to be part of the problem. © Key Note Ltd 2009 26 . TNT has launched a global environmental initiative called Planet Me. Some industry organisations have already responded to this challenge. Demographic Trends Demographic trends are changing the composition of the population across the globe. Travel & Tourism Courier & Express Services FUTURE TRENDS Environment There is a growing consensus among the general public. On the domestic level. such as accelerated growth of healthcare-product deliveries and the distribution networks required to facilitate this.Market Forecasts: Transport. for example. politicians and others that climate change is threatening the environment. These trends have several implications for the transport and distribution industries.

In 2007. and so this analysis considers the UK in the context of the world market. • Luxury — comfortable mass-market cruises to a wide range of destinations. The term ‘ultra premium’ is becoming accepted as a notch above premium. but that was a decline from the 1980s and 1990s. ‘luxury’ and ‘premium’ appear to be used interchangeably. • Themed resort — the Disney Cruise Line is a prime example. and so did not pursue the activity. but at a big loss. such as the Azamara and Crystal lines. Windstar and Silversea. The market segments within cruising include: • Value — for budget-conscious passengers content with easily accessible destinations. which enable passengers to embark thousands of miles from their home. Travel & Tourism Cruise Market Cruise Market DEFINITION This analysis is concerned primarily with cruises on liners built or adapted to offer holidays to fare-paying passengers. including fly-cruise holidays. During the previous 5 years.g. and the description ‘ultra luxury’ adds to the confusion. the long-term future of European yards building cruise liners began to look less secure. • Premium — cruises offering higher levels of comfort and service than ‘luxury’. Swan Hellenic is an example. © Key Note Ltd 2009 27 .Market Forecasts: Transport. however. FORECASTS Building Ships Cruise liners are of crucial importance to the future of a handful of shipyards in Europe and to the economies of the regions in which the yards are located. when around 97% of new cruise ships came from Europe. and Mitsubishi built two liners. cruising is a global industry dominated by two international corporations. The whole cruise is themed to accord with specific brand features and values. EasyCruise is a good example. Although the UK is the primary focus for this review. European yards held almost 85% of the value of cruise-ship building and refitting. the Carnival and Celebrity lines. e. cruises with Oceania. Japan tried to enter this market. Sometimes. for example. • Speciality — such as expedition and adventure cruises.

Europe’s largest shipbuilder. and the yards employed 20. refurbishment and maintenance in Europe accounted for €3. This equated to approximately 38% of total European cruise-industry expenditures. three in Finland. The UK tour company Saga was reported early in 2008 to be discussing with the Korean yard STX a possible contract to build a 34. more than 35% of the total value of the cruise industry to Europe.18bn was for cruise liners and passenger ferries).1bn. The major industrial shareholder. and others in Romania. 2008 Edition.000 people. Figures published by the ECC in 2008 show that. Aker Yards.04bn. Aker Yards owns 75% of Aker shipbuilding in France and 51% of Aker in Brazil. Data from Contribution of Cruise Tourism to the Economies of Europe. Travel & Tourism Cruise Market Korean yards are looking to diversify from container ships and tankers into cruise liners.2% of the Norwegian shipbuilder Aker in 2007. Ukraine and Vietnam.2% of the company in October 2007 (a couple of months after Aker issued a profits warning. © Key Note Ltd 2009 28 . the world’s seventh-largest shipbuilder.1 The following paragraphs include brief summaries of some of the work on order from European cruise-ship builders. two in Germany. in 2006. Cruise Europe and Medcruise. is STX Shipbuilding of Korea. produced by GP Wild (International) Ltd and Business Research and Economic Advisors (BREA) for the European Cruise Council and its partners Euroyards. The yards in Finland and France specialise in building cruise liners. Norway Aker. blamed on narrow margins in Finland).Market Forecasts: Transport. and as part of this new mood. however. because Korean yards are starting to lose out to the People’s Republic of China (PRC) in the market to build tankers and container ships. five times greater than those from building a tanker. STX may be able to acquire. it moved into cruise-ship construction: STX does not want to follow in Mitsubishi’s tracks. this amount had increased by around 32% — with the global cruise industry spending €4.11bn with European shipyards for newbuildings and the maintenance of existing ships. By taking the part-ownership route. The revenues from building a cruise liner are. expertise in liner design and construction. and for the wider communities in which the yards are located. the European Cruise Council (ECC) reported in 2007.86bn (of which just under NKr11. 1. Any diminution in future construction of cruise lines would have adverse repercussions for these shipyards. Aker’s revenues in 2006 were around NKr25. for the network of subcontractors across Europe (who do up to 85% of the construction work for a new build or for a refit). which bought 39. relatively cheaply. The Korea Development Bank wants to persuade the country’s shipyards to move into cruise-liner construction. has 18 yards: six in Norway. in the 1990s. STX Shipbuilding of Korea purchased 39.000-ton liner. per ton. The global cruise industry’s spending during 2005 on ship construction. Mitsubishi of Japan plunged $100m into debt when. net income was nearly NKr1.

the cost per person per day.652 berths.000-ton. Carnival’s Carnival Magic. given the scale of operations. also due in 2009. Despite its healthy orderbook. each with 2. In this view. Fincantieri has three Costa liners (two with 2.850 berths.400-passenger Genesis liners have been ordered from Aker in Finland. new in 2008) are also Fincantieri ships. Italy Fincantieri is owned by the Italian State. Overcapacity When the world’s cruise lines ordered the new generation of ships. to €58. Holland America Line has a sister ship to the Eurodam due the same year. but makes less sense in 2008. which joined the fleet in 2008. However. where flat-panel sections are made in a completely automated process. Carnival’s Carnival Splendor and Ruby Princess. Fincantieri is worried about future competition from the Far East. which constructed Royal Caribbean’s Independence of the Seas. the practice of discounting would be much less necessary if there were sufficient berths to justify heavy advertising in all types of consumer media. and Holland America Line’s Eurodam (like Ventura. follows in 2011. and the Monfalcone yard at Trieste. This analysis may have been correct when the new ships were ordered. following Celebrity Solstice in 2008.004 berths) for delivery in 2009 and 2010.260 berths and one with 3. Passengers on small ships had to pay well over double this amount just for the operator to break even. are on order from Meyer Werft for Royal Caribbean’s Celebrity line for 2009 and 2010. © Key Note Ltd 2009 29 . constructed the 3. P&O has a sister ship to Ventura due from Fincantieri in 2010. and Cunard will take delivery of a sister ship to the Queen Victoria.550-berth MSC Magnifica and the 3. and could well explore a merger with one of the other major European shipbuilders. 5.076-berth Ventura for P&O.7m — but.000-plus passengers. The leading cruise lines tend to say that the giant vessels are a response to customer choice.Market Forecasts: Transport. Profitability for Fincantieri is not very large: in 2006. as well as Carnival’s Carnival Dream (with 3. because people want to be able to select from a wide variety of options and activities on board.000-berth Queen Victoria for Cunard. and a smaller 540-berth vessel for Silversea. and a 4. in the early 2000s. in 2006. Meyer Werft. Aker France is building the 2. Two 2. Travel & Tourism Cruise Market Both of Royal Caribbean’s 220. Germany Celebrity Equinox and Celebrity Eclipse.200-berth liner for Norwegian Cruise Line. their research suggested that lack of capacity was holding back demand.652 berths) for 2009. this was a modest amount. especially Korea. it is also true that on ships taking 3. Fincantieri.500-capacity liners for Disney are due in 2011 and 2012. was around $100. Its Marghera yard built the 2.300-berth MSC Fantasia and MSC Splendida for MSC Cruises. with 3. net profit was up by 21%.

2 years later. the $100-per-barrel price point had been breached. Should the expansion that cruise lines expect not fully materialise. In 2011. the exemption amount rises to $3.400 passengers may result in lower operating costs per passenger. and is arguably too sizeable to offer a personal experience. A 220. they are unlikely to agree to pay the full brochure price. The prevalence of discounting is a worry for the industry. cost just under 97. oil was trading at around $63 a barrel. but is too big for most ports. to any portion of estate in excess of $2m. that persist with the strategy of gigantism risk diluting the cruise experience. but in the US especially. several thousand dollars for a cruise would be reluctant to submit to strict portion control. and many analysts believed this to be a temporary spike. have rocketed. perhaps. Early in 2008. It is not good for a luxury brand to be sold off at low prices. In 2009. When customers know that a lot of new capacity is coming on stream. Cruise lines.2% more expensive. Yet passengers who have paid. Identities and Trends A cruise line with a brand so compelling that discounting would be unnecessary to attract sufficient customers is. nor is it good if some buyers find they have paid more than their fellow cruisers (especially if the differences are large). The companies taking delivery of new cruise ships in 2008 to 2010 did their economic projections for them in 2004 to 2006. or to food surcharges — although passengers do pay fuel surcharges. Many Republicans were hoping for a permanent repeal of federal estate tax. The tax applied. Back in January 2006. looking like a distant dream. Food prices. and there will be efforts to reduce the cost per passenger. which would increase the legacies received by the rich. but the general feeling was that it would not disappear. and in 2010 there will be no estate duty at all. ‘Baby boomers’ who have inherited large sums of money are often keen cruise-takers. or to provide either a tranquil or an adventurous holiday. Soybeans were nearly 93.Market Forecasts: Transport.7% more than 12 months earlier. but this would be a waste of the huge investments made in constructing them. The rising cost of food is a concern for cruise lines.000-tonner with 5. and the threshold will be only $1m. and they also know that they can grab a bargain by shopping around on cruise and holiday websites. The situation in 2008 was confused. however. at a top rate of 45% (as in 2007). However. in the climate of 2008. too. it will be reintroduced. on 10th January 2008. according to the Financial Times’ market data. and corn cost 32% more than a year previously. albeit often with a grumble. with a top tax rate of 55%. and so a high rate of estate tax would not be helpful to cruise lines. © Key Note Ltd 2009 30 . consumer debt. Heavy discounting takes prestige away from a brand.5m. Travel & Tourism Cruise Market The North American market remains prime for the global cruise industry. Wheat. such as Royal Caribbean. no one knew how the tax would develop after 2011. a deflating housing market and indifferent job prospects will restrain demand for cruise holidays. ships could be ‘mothballed’.

for therapeutic relaxation. Fitness cruises are a trend for 2008 and beyond. refuelling. The opening up of Cuba to visitors from the US would significantly expand the potential for inexpensive near-shore cruising for North American customers. hop-on’ itinerary using scheduled coastal boat services. On the other hand. are also attracting more customers. However. favours freighters and mail lines. associating a brand with the trend towards ‘à la carte’ choices while still creating a strong revenue stream is extremely tricky. Carnival and Royal Caribbean have deals with port authorities to give them the most attractive berths on the most popular days. as holidaymakers fight obesity and other health-related issues. re-provisioning. capsized in the Antarctic. not to mention additionally difficult for a cruise operator because of the exigencies of timetabling. notably weekends. Travel & Tourism Cruise Market Cruise-brand identities help customers to choose holidays they are likely to enjoy. reported that in the year to September 2007. which serves the South Atlantic island of the same name. and these deals restrict opportunities for new entrants. which are adding and refurbishing cabins to attract travellers seeking a workaday ambience and few other paying customers. The inclusion of Cuba on cruise itineraries for US ships and US passengers would be of great benefit to cruise lines as well as to the 1. but there is a problem: brands depend for their strength on uniformity and reliability. There has been some speculation that changes of President in Cuba in February 2008 (when Raul Castro took over from his ailing older brother Fidel) and in the US in January 2009 (when a new President will take office) could lead to the easing or even the end of the embargo. the ship carried 38% more passengers to the island than in the previous year1. Spa cruises. than to book a stage on one cruise liner and a later stage on another liner. because onboard spending is an increasingly important part of the cruise business. © Key Note Ltd 2009 31 . All passengers and crew evacuated the ship safely and were rescued. built in Finland in 1969 and operated by GAP Adventures of Canada. It is easier for a holidaymaker to design a ‘hop-off.Market Forecasts: Transport. The bigger the liner. Adventure is not without risk: in November 2007 the Liberian-registered Explorer. such as the boats that serve Norway’s coastal communities. the greater the scope for increasing revenues from shopping and entertainment — two more compelling reasons for mega liners. membership news September 2007. but cruising in hostile regions will never be boringly safe. especially marked among experienced travellers. the focus of both these companies on cruise ships as resorts in themselves is out of tune with demand at the top end of the market. and all the other demands of the clock. customised holidays. Yet operators need their captive audience. The Royal Mail ship St Helena. and in travel the trend is away from uniform packages and towards individually chosen. and boredom with the ship itself as a holiday destination is likely to spread downwards. dock availability. who at the time of this report’s publication in April 2008 are prevented from visiting Cuba by the embargo that the US Federal Government maintains. tides. accounting for more than a quarter of net revenues. Passenger Shipping Association. The anti-package-holiday trend.

The growth has been in business travel and in visits to relatives and friends — the latter category accounting for 17% of outbound travel in 2007. compared with 12% in 2000. In May 2007. said Nigel Lingard. a movement that reversed a little early in 2008. However. holiday travel from the UK stagnated in 2005 and 2006.1%. falling to fewer than 19 million in 2006. However. Olsen Cruise Lines4. Reported in ‘Cruising’s appeal’. Carnival Corporation and Royal Caribbean have both been awaiting the lifting of the embargo.Market Forecasts: Transport. Key Note estimates that the number of cruise-takers should approach 1. the change of leadership there would not alter US policy towards the island. Europe as a whole is forecast to provide 4 million cruise passengers by 2010 and 5 million by 2015. Destinations in dollar zones. in March 2008. FT.6 million foreign package holidays were sold in the UK.com.617 shares. 2. and by 12% in just 2006 to 1. 3. The sector could be worth £8. because passengers purchased longer cruises. The UK market accounted for 35% of the entire European demand for cruise holidays. and the sector was worth £1.6bn to European economies in 2010.2bn to the UK economy. 15th July 2007. In addition. Barclays3 reported that although UK residents made a record 68. May 2007. in the absence of certain conditions being met with regard to democracy and human rights in Cuba. Despite increasing numbers of foreign trips. All Leisure Group reported in 20071 that demand for cruises increased by 9. 1. the Passenger Shipping Association (PSA) reported in May 2007.7 million in 2010. However. Yet even in a flat economy. Travel & Tourism Cruise Market Cuban economy. 25th September 2007.920.2 million people — one in every 16 of those who bought a package holiday. the cruise sector should do relatively well. This capacity would be difficult to utilise profitably in its totality. All Leisure reported. according to UBS2 — but economic circumstances are unlikely to be favourable enough for this to be achieved. even in a buoyant market.5 million visits abroad in 2005. The number of berths available to the UK cruise market will grow by a huge 40% in 2008.7% a year between 1997 and 2006. The number of cruise nights rose by more than 19% in 2006. fly-cruise holidaymakers dislike the long security and immigration procedures affecting flights from and to airports in the US and the UK. Barclays reported.6 million in 2008 and exceed 1. If Europeans are to match the Americans for the numbers of cruises bought in relation to population. © Key Note Ltd 2009 32 . were popular because of the strength of sterling against the dollar. Caution In the UK. Marketing Director of Fred. Announcement of placing of 10. the cruise sector grew in popularity. the European demand for cruises would have to rise by a compound rate of 12% a year for 10 years. President Bush reaffirmed the embargo — stating that. and to around 10% by value. Barclays’ Hospitality and Leisure Services Review.5% to 3. and in the context of declining popularity of package holidays overall. the mood of caution among analysts intensified in 2008. the growth rate slowed from 3. increasing its market share of package holidays by 65% over the same period to between 6% and 7% by volume. In 2002. 20. apart from the US itself.

84 1.000 or so ocean cruise-takers.91 2. UK holidaymakers are likely to remain keen customers for river cruises in Europe and Egypt.58 0.4 27.66 0.80 1.04 19. on the Seine and the Rhône.65 19.53 1. 1st August 2007.34 1. 2008-2013 % Change 20082013 2013 2008 Number of Bookings (million) US UK Germany Rest of Europe Elsewhere in the world 2009 2010 2011 2012 10.20 2.28 2.9 Total Table continues.02 1. ‘Supply of berths on UK cruise market to grow 40% in 2008’.90 11. 4.12 2.41 17.89 1. River cruising is also developing in the PRC and South East Asia. and thus is not an important destination for river cruises. However.71 1..1 52.34 16.09 1.000 holidaymakers on top of the 780.05 2. Cruise Business Review.93 1.13 1.85 1. © Key Note Ltd 2009 33 .56 18.5 29.7 17. around 310. Travel & Tourism Cruise Market Around the World The figures in Key Note’s forecast (see Table 11) are for ocean cruises on the global liner fleet.35 1.41 1.Market Forecasts: Transport. River cruises added more than 40% to the German total in 2007.31 11.76 1. River cruising is also significant in France.09 11.74 20. River cruising in the UK is generally on very small boats in places such as the Norfolk Broads and on canals: the UK does not have water courses long or broad enough to offer a wide range of holidays lasting a week or more. as well as on the Nile in Egypt and on major rivers such as the Mississippi and Ohio rivers in the US.24 1.9 22.76 1.61 12.66 1.. Table 11: Forecast Number of Cruise-Holiday Passenger Bookings Worldwide by Region (million and %).48 17.34 12.

Apart from AIDA’s five ships.0 Total † — does not sum due to rounding Source: Key Note The fastest growth in ocean cruising between 2008 and 2013 is set to be in Germany. However. 2008 should see a significant jump. but this small number brought in around 6%.0 8.9 9.2 11. but insufficient disposable income to afford as many cruises as the lines have envisaged.0 12.0 2011 64.2 †100.7 5.1 9.4 9. of around 250. because so many new liners are destined for a mainly European clientele.. despite increasing customer demand.8 8.5 100. for delivery between 2008 and 2012. from P&O and Cunard.table continued 2008 % of Total US UK Germany Rest of Europe Elsewhere in the world 2009 64.3 11.0 8. enough for around 1. The extra capacity for the German market could be a challenge for lines to fill. growth is likely to be slower after 2008 — except at the top of the market. offering 6.4 100. MSC is taking delivery of four ships between 2008 and 2012. Travel & Tourism Cruise Market Table 11: Forecast Number of Cruise-Holiday Passenger Bookings Worldwide by Region (million and %). and Carnival’s Costa has five on order.7 5.6% of all cruise-takers. £100m. capacity may still be up to 10% ahead of effective demand in 2012.2 6.000 holidaymakers from the UK.5 6.6 8.9 11. © Key Note Ltd 2009 34 .7 9.5 million additional holidaymakers.0 % Change 20082013 2013 63..000 to 22.3 100.000 cruise-takers.000 additional berths.1 8.3 †100. Approximately 21.3 6. with ultra-luxury cruises.0 65.9 8.Market Forecasts: Transport.9 9.7 100. In the UK. The most likely issue is not lack of intent from the public. 2008-2013 . giving almost 36.4 12.0 2012 63. of UK-derived cruise-ticket revenues.743 lower berths between them. as P&O’s Ventura and Royal Caribbean International’s Independence of the Seas cater for the UK market.000 passengers. are added to the equation.2 12. Even if the new liners targeted at UK holidaymakers. all with space for more than 2. 1.6 5.0 2010 64.4 9. booked an ultra-luxury cruise in 2007. for which Carnival Corporation is building five liners for the AIDA line.

and fly-cruise demand increased by 13% to 753. it would make the world headlines and damage the brand. Premium cruise lines such as Windstar and Crystal. the UK should still have more than 9% of global cruise-market passengers. because of the few ports able to take them. because of the numbers of people involved. provided the activities and excursions keep abreast of the eclectic interests of modern pensioners. and need to attract high proportions of repeat business to avoid excessive marketing costs. the major luxury segment. but they come with difficulties: several thousand people need to embark and disembark in a short time. Huge liners cannot change itineraries quickly. compared with 8. including village ports on Greek islands. exemplified by Carnival and Royal Caribbean. is at risk of excessive commodification.Market Forecasts: Transport. Sardinia. and along the magnificent coasts of countries such as Croatia and Italy. catering only for holidaymakers aged 50 and over. In the UK. such as Peter Deilmann’s golf and garden cruises. 1.2 million cruises purchased in the UK)1. demand is rising for cruises leaving from UK ports. but needs small to medium-sized ships that can visit a wide variety of harbours.000 holidaymakers. By 2013. resulting in traffic build-ups in ports. Corsica. On the other hand.000 passengers.8% in 2007. whose preferred destinations were in the Mediterranean (which accounted for 38% of all the 1. Demand for cruises leaving UK ports rose by 12% in 2006 to more than 450. speciality cruises. cruise holidays should continue to gain popularity among customers in the PRC. Supersized liners may enable operators to cut the daily cost per berth. India and South East Asia. but juvenile themes continue to have a strong appeal to children. active middle-aged. have bright prospects among the affluent. © Key Note Ltd 2009 35 . The outlook for Folkestone-based Saga’s three liners. providing mass-market cruises to popular destinations. The popularity of the Mediterranean is set to grow further. have greater costs per passenger than on superliners. is good from the point of view of the ageing population. notably Disney. This could also apply to themed resort lines. published in May 2007. Worldwide. especially Brazil. and if one has a major problem. as well as for fly-cruises. but the US’s share may fall to less than 64% from more than 66% in 2007. Saga’s decision to sail from regional ports such as Newcastle-upon-Tyne and Liverpool in 2008 signals an intention to offer convenient embarkation points. Figures from the Passenger Shipping Association’s Annual Cruise Review 2006. Travel & Tourism Cruise Market Elsewhere in the world. and in South America. making a feature of personal service on small or medium-sized ships. Customers concerned about the environment have complex calculations to make about the carbon footprints of air travel compared with sea transport.

Market Forecasts: Transport. Key Points • Shipyards — Cruise liners are of crucial importance to the future of a handful of shipyards in Europe and to the economies of the regions in which the yards are located. while global security issues and unpredictable weather patterns are likely to put some customers off. the Seychelles and many Pacific coral-reef islands. Travel & Tourism Cruise Market For travel agents. Before the start of 2008. the trend away from packaged holidays can be an opportunity to book personal itineraries for customers too busy to do this themselves. damaging the soil. and won in the High Court. The increasing frequency with which travel agents book flights and accommodation for customers led the Civil Aviation Authority (CAA) to claim that these agents should register for the Air Travel Organisers Licence (ATOL) scheme. Most operators will not be looking a century ahead. Fincantieri and Meyer Werft may not all survive in their present form. However. discriminating travellers seeking both comfort and fascination. In 2007. the long-term future of European yards building cruise liners began to look less secure. forcing travel agents to abide by stringent regulations. but by 2100 global sea levels could be significantly higher than in 2008. From 1st January 2009. for which they would have to take out bonds. the forthcoming regulation of ‘connected travel insurance’ — insurance sold alongside a holiday — is a concern for agents. as Korean yards sought to compete for future business. the Vanuatu atolls in the Pacific were in danger of disappearing beneath storm surges. The cruise industry cannot ignore climate change and associated alterations in weather patterns. Fuel costs and environmental protection regulations will tend to push ticket prices up. The Association of British Travel Agents (ABTA) challenged the CAA’s demand. which would have fed through to the prices customers paid. The highest earners should still be able to fund tickets on premium and adventure cruise holidays. as well as whole communities in low-lying island cruise destinations such as the Maldives. the Financial Services Authority (FSA) will regulate this insurance. This would affect ports and many tourist attractions. The prospects remain good for ultra-premium lines catering for very affluent. especially if orderbooks for post-2012 do not fill up. Aker Yards. © Key Note Ltd 2009 36 . The Caribbean could suffer heavily from hurricane winds and floods that would detract from the pleasure of cruising. as well as from passengers new to cruising. at a cost of around £275m annually. and sea water was seeping into the islands’ farmland and gardens. Budget lines should benefit from customers trading down.

providing mass-market cruises to popular destinations. that persist with the strategy of gigantism risk diluting the cruise experience. exemplified by Carnival and Royal Caribbean. Key Note estimates that the number of cruise-takers should be near 1. according to Nigel Lingard of Fred.Market Forecasts: Transport. or to provide either a tranquil or an adventurous holiday. When customers know that a lot of new capacity is coming on stream. in the early 2000s. but juvenile themes continue to have a strong appeal to children. India and South East Asia. for which Carnival Corporation is building five liners for the AIDA line (all with space for more than 2. • Europe — The fastest growth in ocean cruising between 2008 and 2013 is set to be in Germany. and arguably too sizeable to offer a personal experience. notably Disney. This could also apply to themed resort lines. Unfortunately. and they also know that they can grab a bargain by shopping around on cruise and holiday websites. • Free choice — Associating a cruise brand with the trend towards ‘à la carte’ choices while still creating a strong revenue stream is tricky. and in South America (especially Brazil). cruise-ship capacity for Europe may still be up to 10% ahead of effective demand in 2012. such as Royal Caribbean. The number of berths available to the UK cruise market will grow by 40% in 2008.400 passengers may cut the operating cost per passenger. Travel & Tourism Cruise Market • Incomes — When the world’s cruises lines began to order the new generation of ships. • Capacity — In the UK.000 passengers). their research suggested that lack of capacity was holding back demand. The anti-package-holiday trend favours freighters and mail lines.000-tonner with 5. This capacity would be difficult to utilise profitably in its entirety even in a buoyant market. but insufficient disposable income to afford as many cruises as the lines have envisaged. when consumers’ disposable incomes are likely to come under increasing pressure. Olsen Cruise Lines. • Luxury cruises — The major luxury segment. they are unlikely to agree to pay the full brochure price. are added to the equation. • Gigantism — Cruise lines. but is too big for most ports. many new superliners will be coming into service between 2008 and 2012. • Elsewhere in the world — Cruise holidays should continue to gain popularity among customers in China. for delivery between 2008 and 2012. • Discounting — The prevalence of discounting is a worry for the industry.6 million in 2008 and more than 1. © Key Note Ltd 2009 37 . The most likely issue is not lack of intent from the public. from P&O and Cunard. is at risk of excessive commodification. The extra capacity for the German market could be a challenge for lines to fill. Even if the new liners targeted at UK holidaymakers.7 million in 2010. which are adding cabins to attract holidaymakers. A 220. the practice of discounting would be much less necessary if there were sufficient berths to justify heavy advertising in all types of consumer media. In this view.

Market Forecasts: Transport, Travel & Tourism

Cruise Market

• Budget cruises — The budget lines should benefit from customers trading
down, as well as from passengers who are new to cruising.

• Premium and ultra-premium cruises — Prospects for ultra-premium
lines, catering for very affluent, discriminating travellers seeking both comfort and fascination, remain good.

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Market Forecasts: Transport, Travel & Tourism

European Short Breaks

European Short Breaks
DEFINITION
This analysis deals with the UK short-breaks market. It covers short breaks taken by UK residents both in the UK and in other European countries (which are, due to distance and time constraints, the destination for 97% of UK residents’ short breaks abroad). The analysis uses conventions agreed by the World Tourism Organization (WTO), including the following:

• Tourism is defined as travel away from home involving at least 1 night in
accommodation.

• Holiday tourism is personally defined by survey respondents, who may
also choose purposes such as business travel or visiting friends and relatives (VFR).

• Holidays divide between independently organised holidays and inclusive
tours (also known as ‘package’ holidays); the latter are defined as holidays for which both transport and accommodation are arranged by a company, sold at an inclusive price. A short break lasts 1 to 3 nights in accommodation, whereas ‘long holidays’ are 4 or more nights’ duration. Breaks abroad are also referred to as ‘outbound’ holidays, and breaks within the UK by UK residents are classed as ‘domestic’ holidays. This summary does not cover the third strand of the total tourism market, i.e. inbound tourism. However, routes abroad are strengthened by an inbound infrastructure (e.g. flights between the UK and Poland), and improvements to a UK destination (such as the London Docklands) can encourage both inbound and domestic visits.

FORECASTS
Market Forecasts
Table 12 presents a summary of the Key Note forecasts of demand for short breaks between 2008 and 2012. In volume terms, the domestic demand is likely to increase after some years of decline, with environmental considerations being a factor, along with improved services in accommodation and in packaging the ‘UK experience’.

© Key Note Ltd 2009

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Market Forecasts: Transport, Travel & Tourism

European Short Breaks

The domestic forecast for 2012 includes an assumption that hosting the Olympic Games in London (and some other UK venues) will boost internal travel. However, their main effect will be to increase inbound tourism, which this analysis does not cover. (When Sydney, Australia, hosted the Games in 2000, inbound visitors to the city increased by 11% compared with 1999.) Travel abroad will probably flatten off for economic and environmental reasons, but this is unlikely to last for long with such an underlying demand for travel. Volume growth will improve later in the decade but at the expense of value growth, with short breaks proven to be a highly elastic market.

Table 12: The Forecast UK Short-Break Holiday Market by Volume and Value (million trips and £m), 2008-2012
2008 Volume (million trips) Domestic breaks Breaks abroad Total Value (£m) Domestic breaks Breaks abroad† Total 8,000 2,000 10,000 8,700 2,050 10,750 9,300 2,050 11,350 9,500 2,050 11,550 9,900 2,100 12,000 55.0 7.5 62.5 57.0 7.5 64.5 60.0 7.7 67.7 60.0 8.0 68.0 62.0 8.0 70.0 2009 2010 2011 2012

† — excludes fares to and from the UK Note: figures for domestic breaks are Key Note forecasts based on data for previous years from the United Kingdom Tourism Survey (UKTS); figures for breaks abroad are Key Note forecasts based on data for previous years from Travel Trends (National Statistics). Concerns about the methodology of the UKTS led to a change for 2005 onwards, with 2006 being the first full year of the current UKTS methodology. For this reason, data for domestic breaks from 2006 onwards are not strictly comparable with the results from previous years.

Source: Key Note

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The station itself is ‘state of the art’. VisitBritain has commented that income for leisure purposes is being squeezed. easyJet commented in May 2008 that fuel prices were ‘a big issue and highly unpredictable’. claiming that more people are choosing to holiday in the UK because of a demand for a ‘green’ and hassle-free alternative to flying abroad. One is the environmental impact and a more pressing concern is whether ‘the high cost of the euro compared to the pound will put UK residents off visiting Europe’. The Environment VisitBritain asks if ‘environmentally mindful consumers’ will opt to holiday more at home rather than fly abroad. in these conditions. The US. if the housing market slows down. who have taken more holidays and breaks abroad every year in living memory. but they may also worry about extra spending if house prices fall. but Key Note’s research found that consumers gave this issue of ‘too many cheap flights causing damage to the environment’ a fairly low priority. is just one company taking the opposite viewpoint. so a higher tax may not deter travellers. Holidaying at Home It seems highly unlikely that UK consumers. is now well established as an alternative to Europe at such times. The Government seems likely to ‘milk’ the aviation industry with higher taxes. with the dollar being weak. a short break can be a substitute for a longer. noting that some airlines are prepared to fill their seats for very low prices. In contrast. Operators therefore have no way of knowing whether an economic downturn is good or bad news for short breaks. home owners may be more likely to take more holidays instead of planning to move. Similarly. scenario. Higher fuel charges could turn out to be a more decisive factor than either taxation or consumer worries. VisitBritain also points to other questions about the future of the holiday market generally. Eurostar stands in good stead to take advantage of security arrangements at airports and higher fuel costs for airlines. The end result may be that the market simply remains at a similar level to the past. having cost £800m to build over 6 years. will suddenly ‘rediscover’ © Key Note Ltd 2009 41 . and more realistic. Hoseasons. Travel & Tourism European Short Breaks Economic Conditions Although superficially the ‘credit crunch’ or credit ‘squeeze’ in 2008 may seem likely to depress demand for short breaks. the ferry lines entered 2008 assuming that demand would increase for their services as a greener alternative. The High Speed 1 track has cut journey times to Paris. A more likely. with the ‘average UK family paying £15 more per week for groceries than a year ago’. more expensive holiday. there is also the positive factor that. is for consumers to fly abroad less because of rising prices. Disneyland Resort Paris and Brussels. For example. now that London’s St Pancras International is open (since December 2007). However.Market Forecasts: Transport. the self-catering leader.

Despite this availability. One ‘ray of sunshine’ has been the budget or lodge hotel sector. Travel & Tourism European Short Breaks their home market for holidays. closer to where short-break tourists want to stay. which merged with Madame Tussauds in 2007 and already has experience of resort hotels at Legoland and Alton Towers.Market Forecasts: Transport. • More hotels situated close to attractions will encourage overnight stays. for example. the UK is the most expensive country in Europe for hotels.com also noted the influence of the ‘super rich’. taking former day trips into the short-break category. For example. according to Thomson Holidays. but will not do so when holidaying at home. These were developed on roadsides in the 1990s but are now appearing within cities. Hotels. Although they are basic or ‘no frills’. because travellers abroad may put up with poor accommodation as long as the sun shines and the cost of living is cheap. improvements to the domestic offer could shore up a market — for domestic holidays generally — that has been struggling for many years. driven by London prices.5%. the statutory minimum number of days of holiday per year for full-time workers in the UK will increase from 24 to 28 days in 2009. Edinburgh. other factors likely to influence future demand for breaks include the following: • There will be a stimulus from extended holiday entitlement under European law. In London.com. (The European average was up by 4. However. This is the future plan for the mighty attractions group Merlin. Other Future Factors In addition to the economy and the environment. Accommodation is the target sector.) However. and consumers may find that they tend to be a safer bet than choosing an urban hotel at random. Some have argued that accommodation should be much more tightly regulated to rid the market of poorly run bed-and-breakfast (B&B) accommodation and guest houses. © Key Note Ltd 2009 42 . In 2007. the lodges and budget chains do offer standardised accommodation. according to bookings through Hotels. average UK prices rose by 12% to an average of £106 per night. who are prepared to pay the highest prices wherever they travel. has a range of hotels at lower prices but in reasonable locations for the city centre. releasing 8 million more holiday days to the market. budget hotels in the Travelodge and Premier Inn chains have opened to offer more reasonable prices than the very expensive tariffs typical of many London hotels. another popular destination but infamous for expensive accommodation.

particularly those offering some sort of health benefit or pampering.000 Web users in December 2007 found that travellers visited an average of 22 websites before finally booking their holiday. hot tubs) and therapy breaks.com became the first online travel agent selling Center Parcs breaks (from April 2008). Hilton International announced a standard. Thomas Cook plans to cut its ‘mainstream’ holidays to a turnover share of 72% by 2010 from 80% currently. globalised Hilton Mini Break offer at 150 hotels around the world. many of which will be suitable for short breaks. In 2007.Market Forecasts: Transport. TUI’s capacity for mainstream short-haul holidays (long holidays. and free meals for under-10s. online booking agencies will offer more sophisticated choices. particularly in the domestic market.com. customers can easily leave their hotels or the cities they visit with no incentive given at all to come back. instead offering more niche products. For example. free accommodation for children under 18. At the moment. • Consumers will exploit the Internet even more in the future than they do now. under which guests can enjoy ‘lazy breakfast’ (served until 11am on Sundays). © Key Note Ltd 2009 43 . which are often more expensive than flights abroad.g. particularly by reducing rail fares. with growing interest in spa facilities (e. to create their own ‘dynamic’ holiday packages. • There will be pressure to improve the domestic offer to cut down on flights abroad. Travelsupermarket. and Lastminute. To match consumer demand. • Breaks with added value will continue to be in demand. • The two big travel groups that emerged in 2007 — Thomas Cook and TUI — are likely to boost the short-break market by cutting back on the number of cheap long holidays they offer. a price-comparison site. Travel & Tourism European Short Breaks • Operators will do more to develop customer loyalty. There is a demand for physical ‘rejuvenation’. and Hotels4U have both launched city-breaks services in 2008. not short breaks) was 25% lower for 2008 than for 2007. • Hotel groups will intensify the competition by making more tempting offers for repeat custom. A Google study of 22. The National Consumer Council has called for the tourism industry to be given help to make the UK more attractive and better value. later hotel check-outs.

Market Forecasts: Transport. From the BIFA perspective. As competition in this market has intensified. This class excludes: • courier activities (SIC 64. but this definition no longer serves to describe the entire range of activities currently carried out by those who describe themselves as forwarders. temporary crating for the sole purpose of protecting the goods during transit. Travel & Tourism Freight Forwarding Freight Forwarding REPORT COVERAGE This summary covers the market for the services provided by freight forwarders and others as defined in the UK’s Standard Industrial Classification (SIC — 2003) 63. air or sea (including collection and distribution of goods) • activities of customs agents • activities of sea freight forwarders’ and air cargo agents’ goods handling operations. the defining characteristic of freight forwarders is that they are ‘independent of the physical carrier. The activities listed are those engaged in by the UK freight forwarding sector.20). © Key Note Ltd 2009 44 . undermining the role of the traditional freight forwarder. The British International Freight Association (BIFA) — the industry’s main trade association — describes its members as belonging to ‘the international freight services industry’. This class covers ‘activities of other transport agencies’. weighing of goods. e. a freight forwarder has been defined as ‘an agent who arranges transport and prepares shipping documentation’. and thus able to choose the best options for the customers’ distribution needs’. which includes the following: • forwarding of freight • arranging or carrying out of transport operations by road. transport principals have increasingly sought to market their services direct to the customer. uncrating. Many traditional forwarders have responded to this by organising transport services under their own name.4. sampling. Traditionally. in broadly defined terms.12) • activities related to the arrangement of freight insurance (SIC 67.g. sea or air • receipt of group and individual consignments (including pick-up of goods and grouping of consignments) • issue and procurement of transport documents and way-bills • organisation of group consignments by road. rail.

notably the providers of international transport services by rail. Travel & Tourism Freight Forwarding This analysis therefore also covers certain other sectors of the UK freight services industry that compete in the same market as freight forwarders. renting of ships and boats with crew for transport of freight (part of SIC heading 61. These are as follows: • air freight consolidation and forwarding • maritime intermodal services • European road and rail distribution • customs broking and consultancy • packing of goods for export • warehousing and distribution • logistics and supply-chain management.20/9) • international rail transport — international freight transport via rail (part of SIC heading 60. together with freight forwarders.Market Forecasts: Transport. whether scheduled or not. transport by towing or pushing of barges.10/2) • international air transport — international transport of freight by air over regular routes and on regular schedules (part of SIC heading 62. MARKET SECTORS Freight Forwarding Freight forwarding activities — as classified under UK SIC (2003) 63. and regular freight charter flights (part of SIC heading 62.10/9). Transport Principals Providers of transport services. international non-scheduled transport of freight by air. road.. etc. oil rigs.24) • international sea transport — international transport of freight over water.10/2). sea and air. The freight forwarding sector acts as an intermediary between the customer and the transport principals: • international road transport — international freight transport by road (part of SIC heading 60. © Key Note Ltd 2009 45 .4 — can be grouped into identifiable market sectors that align closely with the range of services provided by BIFA members. constitute the international freight services market.

3 Constant 2000 prices (£m) 16.4 2007 Current prices (£m) % change year-on-year Estimated price index (2000=100) % change year-on-year 113.6 4.6 4.8 2. These and other efficiency improvements undertaken across most transport modes imply a slower rate of growth in this sector than in the international trade sector on which it depends.1 4.7 2. Travel & Tourism Freight Forwarding FORECASTS 2007 TO 2011 International Freight Services It is anticipated that improvements in the productivity of the UK international freight services sector will continue throughout the forecast period. The forecasts in Table 13 are based on predictions of developments in each of the separate markets.8 2008 2009 2010 19.6 123.7 116.8 126.5 1.665 17. % and index 2000=100).4 2.7 2.8 1.993 % change year-on-year 3.950 20.7 1.2 1. 2007-2011 AAV % 20072011 2011 4.0 4.095 17.348 17.Market Forecasts: Transport.0 AAV — annual average percentage variation. base year 2006 Source: Key Note © Key Note Ltd 2009 46 .7 119.187 19. Among such changes is a predicted streamlining of procedures within the Single European Market (SEM) to be adopted by the European Commission.6 0.749 4.726 22.0 2.887 17. Table 13: The Forecast Total UK International Freight Services Market by Value at Current and Constant 2000 Prices (£m. although a common factor is the impact of continuing growth in world trade.9 2.773 21.

with the volume of trade between the UK and these two countries being much smaller than was involved between the UK and the 2004 accession countries.1 4.850 16. there are indications that the entry of Romania and Bulgaria in January 2007 had less of an impact than the earlier expansion. This is somewhat lower than the rate of growth expected in both the UK economy and in world trade. particularly the new accession states in Eastern Europe.600 17.7 4. Based on these early indications. base year 2006 Source: Key Note Transport Principals International Road Freight It is anticipated that the UK international road freight sector will continue to meet competition from operators based in other EU countries. However.8 AAV — annual average percentage variation. 2007-2011 AAV % 20072011 2011 4.3% (2% in real terms) between 2006 and 2011. Table 14: The Forecast UK Freight Forwarding Sector by Value at Current Prices (£m and %).5 2008 2009 2010 15.200 15.3% from 2006 to 2011 — between 2007 and 2011.400 4.Market Forecasts: Transport.3 4.8% year-on-year — an annual average rise of 4.5% and 4. some recovery from the recent period of low growth is expected. © Key Note Ltd 2009 47 .600 3. in line with growth in the international freight services market as a whole. However. the freight forwarding sector is forecast to increase between 3.3 2007 Turnover (£m) % change year-on-year 14. As measured by turnover. Travel & Tourism Freight Forwarding Freight Forwarding Freight forwarding activity has been affected by the reduction of the need for customs documentation in respect of trade between the UK and the countries that acceded to the EU in 2004 and 2007. with a forecast annual average growth of 4. some recovery is expected in 2007 from the decline experienced in 2006.

The restructuring of Eurotunnel and the removal of the immediate threat of bankruptcy that previously faced the organisation have given some hope that its commercial prospects will also improve. Among these positive developments are the announcement in October 2007 of a new simplified and more competitive pricing structure applicable to all rail-freight operators. Like the UK transport operators in the international road and sea freight markets. UK airlines also face competition from foreign operators. Key Note forecasts that. Despite strong competition from foreign operators in this market. in line with the environmental protection objectives supported by the Government. Travel & Tourism Freight Forwarding International Sea Freight In 2007.3%.3%) in 2005. UK operators’ turnover is forecast to grow at 5. Sector turnover is forecast to increase by an annual average 4. both existing and new entrants. between 2006 and 2011. reaching a level that is still considerably below the Tunnel’s capacity to handle rail freight. the participation of UK-registered shipping companies in the cross trades is expected to continue at a high level. fuelled by expansion of global markets. to encourage greater transfer of freight transport to rail. and this is forecast to continue throughout the rest of the forecast period.Market Forecasts: Transport. International Air Freight Although far less significant than sea freight in terms of the tonnage of goods transported. © Key Note Ltd 2009 48 . This sector is expected to show strong growth of 14. it is forecast that the international rail freight sector will continue its modest recovery from the sharp decline experienced (of 14. air freight continues to have an important role in the carriage of high-value items and urgent consignments. in particular the increase in Chinese manufacturing exports and demand for commodity imports. The new arrangements include measures to ensure cross-Channel open access for all rail operators.4% (just over 2% in constant price terms) between 2006 and 2011. turnover will increase by an annual average of 9. Although not covered in these forecasts. International Rail Freight In 2007.8% a year (just over 2% in terms of constant prices) between 2006 and 2011.6% between 2007 and 2011. some recovery in international sea freight is expected from the sharp decline in turnover experienced in 2006.

630 4.8 1.6 1.8 33 10.430 3. 2007-2011 AAV % 2007 Road freight† % change year-on-year Sea freight‡ % change year-on-year Air freight§ % change year-on-year Rail freight†† % change year-on-year 2. These policies.380 3.1 1.330 3.0 30 11.250 5. excluding cross trades and charter receipts § — international turnover of UK airlines †† — turnover attributable to UK companies’ operations through the Channel Tunnel Source: Key Note FUTURE TRENDS EU Transport Policy Among the most significant developments in EU transport policy that are likely to have an impact on the international freight services market over the next few years were those announced in October 2007.300 15. Travel & Tourism Freight Forwarding Table 15: The Forecast UK Transport Principals Sector by Subsector by Value at Current Prices (£m and %).090 3.0 2010 2. should provide many opportunities for the international freight services market to enhance its product offering.340 3.420 3.050 4.4 39 8.520 4.0 2008 2.010 5.9 1.1 1.4 5. which are aimed at making freight transport in the EU more efficient and sustainable through the creation of a freight transport logistics action plan.490 4.1 2009 2. base year 2006 † — international turnover attributable to UK registered vehicles over 3.6 36 9.8 20072011 4.3 AAV — annual average percentage variation. a freight-oriented railway network.3 9.3 4.140 4.Market Forecasts: Transport.6 1.3 27 8. if implemented.5 tonnes ‡ — international turnover of UK shipping industry. © Key Note Ltd 2009 49 . a ports policy and measures affecting maritime and short-sea shipping.2 1.4 1.5 1.0 1.190 4.1 2011 2.

reliability and capacity. and forwarders and other operators are using increasingly sophisticated IT solutions to provide this service. accession of any of these countries. such measures might have the effect of reducing the clients’ need for the type of expertise the forwarders offer. Cyprus and ten other countries in central and eastern Europe. in particular. despite the failure of the Doha round of trade talks and signs of an increase in protectionist sentiment in the US and some European countries. including the use of Radio Frequency Identification (RFID). competition continues between traditional forwarders and those that provide a wider range of services. shipment and settlement processes involved in global trade. including a number of checks and inspections by the immigration. A Changing Role for the Forwarder Many importers and exporters are reviewing their overall logistics operations. Trade between the UK and the giant economies of the People’s Republic of China and India in particular seems set to expand. However. and the review of current limits on road vehicle weights and dimensions. veterinary and other authorities. opportunities will continue to exist for innovative freight forwarders and other participants in the international freight services market to benefit by providing a range of value-added services. to lead to the type of reduction in the need for customs-related services brought about as a result of earlier enlargements. is considered unlikely during the forecast period. health. In this competitive trading environment. Proposals for the creation of a freight-oriented railway network and improvements to the European port network would improve transit times. it is not likely. The policy of reducing barriers to maritime transport aims to reduce the bureaucratic procedures encountered by ships moving between EU ports. Meanwhile.Market Forecasts: Transport. and would also provide the basis of a better service to clients. over this period. Travel & Tourism Freight Forwarding Examples include proposals put forward as part of the freight transport logistics action plan. the development of standards for loading units suitable for all modes of transport. the former Yugoslav Republic of Macedonia and Turkey. customs. Croatia. However. such as innovation in the use of information and communication technologies (ICT). As such. from the perspective of the freight forwarder. leading to a changing role for the forwarder. EU Expansion Following the recent expansion of the EU to include Malta. several other countries have become candidates to accede to the EU and so become part of the SEM. These include software and services designed to optimise the systems to deal with the order. © Key Note Ltd 2009 50 . Globalisation Globalisation of the world economy continues apace. or other candidate countries such as Albania and Serbia. to the benefit of UK freight forwarders and international transport operators.

many of the measures considered to tackle this problem are targeted at the passenger transport sector. Travel & Tourism Freight Forwarding Consolidation in the Forwarding Sector Competitive pressure is felt particularly by smaller companies. consistency between different policies has yet to be achieved. for example.Market Forecasts: Transport. with rail and sea transport support sectors considered to be more environmentally friendly. including the need to reduce energy consumption. Policies that embrace this concept will increase pressure on the international freight services market to become more environmentally friendly. However. Many are likely to find such pressures too great and will either go out of business or be taken over by larger groups. to walk or to cycle. In addition. being exhorted to make greater use of public transport. which might find it difficult to extend the boundaries of their businesses by offering the range of services that clients are seeking or who have not fully grasped the opportunities offered by the newer technologies. The first transport sectors to be covered by the scheme are the aviation and maritime sectors. in particular. reconciling the need to reduce aviation emissions at the same time as supporting the construction of a third runway at Heathrow. The sectors most likely to be subject to such constraints are road and air transport. Even some of the larger groups might find themselves the target of takeover activity by the even larger global logistics companies. in some areas. with such policies impacting mainly on the transport principals rather than the freight forwarders. but has focused on the inclusion of car manufacturers and individual motorists rather than commercial road freight operators. some measures that are likely to be adopted also affect the freight transport sector. The European Commission has also considered the possibility of including road transport in the ETS review. although. The UK Government also supports such moves. including those seeking to encourage the transfer of freight from road to short-sea and coastal shipping. The European Commission has many policies to address this issue. Emissions Trading One way in which countries can meet their obligations to reduce carbon emissions under the terms of the Kyoto Treaty is to trade permits to emit carbon dioxide and other greenhouse gases. although implementation is unlikely to take place before 2009 at the earliest. In 2003. Environmental Concerns Sustainable Mobility Sustainable mobility is a concept aimed at reducing the negative impacts of transport on the environment. inland waterway and rail. with private car users. © Key Note Ltd 2009 51 . the EU published a Directive covering the introduction of an Emissions Trading System (ETS).

operatives and suppliers. cutting out the forwarder. Security Regulations aimed at countering the terrorist threat to freight transport operations are likely to increase over the forecast period. and in the opening up of market opportunities for companies in the sector. Prospects for forwarders are mixed: developments in IT provide clients with greater ability to source some of their freight transport needs via the Internet. for the freight forwarding sector in particular.Market Forecasts: Transport. Travel & Tourism Freight Forwarding IT Progress will continue to be made in developing IT applications in support of freight transport operations through improved methods of communication with customers. However. © Key Note Ltd 2009 52 . this situation may have a more positive outcome in that exporters and importers might seek their specialist advice and assistance where the security implications of the shipment of goods need to be fully considered. although the increasing complexity in international trade may push clients to seek specialist advice from forwarding experts.

which state that hotels comprise formal accommodation with full service and a minimum of six bedrooms. • Budget hotels — always part of a large. Travel & Tourism Hotels Hotels REPORT COVERAGE Overnight accommodation. A range of places to eat will be within easy walking distance. with no frills • 2 stars — well presented and well run • 3 stars — good level of quality and comfort • 4 stars — excellent standard throughout • 5 stars — exceptional with a degree of luxury. as well as other facilities and services that can be found in hotels. in a rural or semi-rural location. room service breakfast is acceptable.qualityintourism.uk). 24-hour reservations and a consistent level of facilities.co. branded hotel group. It is possible that these establishments do not serve dinner. The greater the number of stars. a budget hotel offers clean and comfortable en-suite facilities. • Metro hotel — a town/city hotel providing full hotel services. Hotels are also given a rating from one to five stars. © Key Note Ltd 2009 53 . • Small hotel — a hotel with a maximum of 20 guest bedrooms. Public areas may be limited. The emphasis is on peace and quiet. which is personally run by the proprietor and is likely to have limited function business. All bedrooms must also be ensuite or have a private bathroom. the higher the quality and the greater the range of facilities and level of services provided: • 1 star — simple and comfortable. This summary defines hotels in accordance with the specifications on VisitBritain’s website (www. but offer room service instead. are offered by various bodies. The grading system imposed by VisitBritain is outlined below: • Country house hotel — a country house with ample grounds or gardens. Where a dining room is not available. but also exceed the expectations within their rating level. with the exception of dinner. • Town-house hotel — a high-quality town-/city-centre property of individual and distinctive style with a maximum of 50 guest bedrooms and a high staff-to-guest ratio. Gold and silver awards are also given to properties that not only achieve their overall rating.Market Forecasts: Transport. are licensed and offer dinner (except hotels classified in the Metro category).

4m in the first half of the year. In response. Consumer Hotel revenue gained from individuals and non-business purposes accounts for the consumer sector of the market.com reported Robert Milburn. On 18th July 2008. although spending levels remained constant. FORECASTS 2008 TO 2012 In July 2008.Market Forecasts: Transport. and this could result in discounting if hoteliers start to panic.caterer. Travel & Tourism Hotels MARKET SECTORS It is necessary to divide the hotel industry into two sectors — corporate and consumer — in order to assess the size of the market: Corporate The part of the market paid for by businesses comprises the corporate sector of the hotels market. This sector primarily includes accommodation. Malmaison and Hotel du Vin reported a loss of £5. such as the use of health and fitness facilities. In addition to accommodation used for business travel purposes. Lead-in times are getting ever shorter. although performance levels are not likely to stabilise before 2010. some hotels have increased room rates in order to protect margins. Key Note forecasts that the UK hotel market will fall by 1. According to National Statistics data. this sector includes conferences. business meetings and other business uses. as well as the use of hotel facilities as social venues for weddings and Christmas parties. as saying that: “Hoteliers are facing fragile and volatile conditions. It is then predicted to recover slightly in 2009. In light of this data.” In August 2008.8% in value terms in 2008. partner and UK leader of hospitality and leisure at the company. Also recording an operating loss for the first half of 2008. for example. The Real Hotel Company commented that the mid-market was beginning to feel the impact of the contracting economy. © Key Note Ltd 2009 54 . with a £19m fall in its property values. the number of overseas visitors to the UK dropped by 5% between April and June 2008. the second half was likely to see significant deterioration. and for other leisure purposes. while UK hotels may have enjoyed positive trading in the first half of the year. www. a report published by PricewaterhouseCoopers stated that. 1-2 weeks rather than 4-6 weeks is now the norm.

Travel & Tourism Hotels Table 16: The Forecast UK Hotel Market by Value at Current Prices (£m). it is likely that oversupply will be seen in the market and this will lead to some brand rationalisation. as such. with its high dependence on corporate travellers. Mid-market hotels are likely to feel the squeeze as they are strongly positioned between the value and luxury hotel options.0 2012 15. The development of more tiering in the budget sector will also have a detrimental affect on operators of 3-star hotels. overcapacity may become an issue. Both Travelodge and Premier Inn reported that they were attracting more business travellers in 2008.8 2011 15. the aggressive expansion plans of the larger names will also push more marginal suppliers out of the market.875 0.8 2009 14. In October 2007. and opportunities may emerge for further consolidation in the hotel market as more of the smaller groups disappear or are absorbed by larger companies. the hotel market may still stumble. this had been revised to between 3% and 5%. © Key Note Ltd 2009 55 . Hotel operators have focused a high level of investment at the top end of the market and this may prove to be a successful strategy.Market Forecasts: Transport.5 2010 15. the economic downturn may prove a challenge. As clients reduce their spending.140 1. there has been a considerable expansion in the number of rooms available in this sector over the past few years and. However. 2008-2012 2008 Value (£m) % change year-on-year Source: Key Note 14. The luxury market is often slower to show the impact of cutbacks in spending. Nevertheless.800 -1. Budget hotels seem best placed to weather the credit crunch. Any slowdown in the market will bring casualties. however. Marriott estimated growth in revenue per available room at between 5% and 7% in 2008. by May 2008. In addition.786 2.2 FUTURE TRENDS While the focus of activity for many hoteliers has been at the luxury end of the market.448 2. although these establishments have lower overheads.

10 Manufacture of electric motors. light rail and tramway undertakings — as well as the international operators Eurostar and Eurotunnel. as such. Analysis includes a range of purposes for rail travel.12 Manufacture of pumps and compressors • 29.30/1 Manufacture of electronic industrial process control equipment.10/9 Other transport via railways • 60. are not covered in this summary.10/1 Transport via railways — inter-city services • 60. Hythe and Dymchurch Railway.21 Other supporting land transport activities.21 Other supporting land transport activities • 70. roads.14 Manufacture of bearings. the operation of railroad infrastructures and the minor maintenance and repair of rolling stock. Reference is also made to rail services in Northern Ireland.32 Management of real estate on a fee or contract basis © Key Note Ltd 2009 56 . including the operation of terminal facilities such as railway stations. generators and transformers • 33. The activities of preserved railways. Other important sectors supplying products and services to the UK railway industry (by SIC code) include: • 29. such as the Mid-Hants Railway (Watercress Line) and the Romney. gearing and driving elements • 31. railways. function more as tourist attractions than transport operations and. metro and similar systems • 63. airfields and sport facilities. Travel & Tourism Rail Travel Rail Travel REPORT COVERAGE Report Structure The market covered in this analysis is UK travel by rail. such as business trips.23 Construction of motorways. journeys to work and school. Definitions (Standard Industrial Classification) The main services covered in this analysis are defined under Standard Industrial Classification (SIC) codes: • 60. manufacture of railway and tramway locomotives and rolling stock • 45.21/3 Urban and suburban passenger transportation by underground. where an entirely separate organisational structure applies. gears. cargo handling and storage • 63. which includes travel on the services provided by main passenger railway operators — including underground. leisure and other personal reasons.Market Forecasts: Transport. metro.

Heathrow Connect. but instead operate under the so-called ‘open access’ arrangements. the rail travel market is served differently.20 architectural and engineering activities and related technical consultancy. © Key Note Ltd 2009 57 . notably London and the South East. The most significant developments affecting the rail travel market over the past few years include the severe problems associated with the maintenance of the rail infrastructure and the perceived poor performance of a number of the train operating companies (TOCs). The industry serving the present-day rail traveller has a long and complicated history. with Northern Ireland Railways (NIR) being responsible for both infrastructure and train operations.Market Forecasts: Transport. Grand Central. its track and other infrastructure has been the responsibility of Network Rail. and has experienced many structural changes over the years since the opening of the first steam-powered passenger rail service between Stockton and Darlington in 1825. Hull Trains. Mainline Rail Services The main products provided by the TOCs are inter-city services. These have involved changes in ownership and in organisation. the operation of the British national rail network. MARKET SECTORS While the market can be segmented in terms of journey purposes. The majority of these services are provided under franchise agreements between the Secretary of State. Other services that are not franchised by the Government. the main market sectors are defined by the geographical areas served. which serve mainly business markets. Even today. public-sector involvement continues. the franchisee (the owning group) and the franchise operator (the TOC). In Northern Ireland. Heathrow Express. including the following: National Rail Infrastructure Since June 2002. Travel & Tourism Rail Travel • 72. with both national and local government bodies having a powerful influence.2 Software consultancy and supply • 74. as well as commuter services in and around the large conurbations. and Wrexham & Shropshire (which started operating on 28th April 2008). and regional and cross-country services serving both business and leisure markets. include: Eurostar. an organisation that is not in charge of the operation of train services. following the privatisation of most of the national rail network in the 1990s.

In addition. Passenger receipts on urban and international rail travel are forecast to grow at annual averages of 5% and 5. taking the rate of growth predicted for the UK economy into account. respectively — a slower rate than that predicted for travel on the national network.Market Forecasts: Transport. International Rail Services International rail services comprise the vehicle-carrying shuttle services of Eurotunnel. cater largely for the journey to work. FORECASTS 2008 TO 2012 Key Note’s forecasts for rail turnover between 2008 and 2012 are shown in Table 17.6%. They cover rail travel on the services of the train operating companies (TOCs). and the Eurostar high-speed through-passenger services from London to Paris and Brussels. The greatest growth is expected for passenger receipts on NIR. at an average of 7% per year. therefore. at 9. In general. the urban railways. these forecasts assume that planned levels of investment in the national rail system will be achieved and that there will not. although tourists are also significant users in areas such as London. Northern Ireland In Northern Ireland. be any limits on the capacity of track and other infrastructure to accommodate predicted growth in demand.5%. the major lines run from Belfast to Londonderry and from Belfast south to the border with the Republic of Ireland and on to Dublin. including the London and Glasgow Underground systems and other metro and light rail services. these forecasts are based on the assumption of a continuation of past trends. the international operators (Eurotunnel and Eurostar) and Northern Ireland Railways (NIR). © Key Note Ltd 2009 58 . and caters largely for the needs of leisure travellers. Capacity constraints will limit growth on the London Underground — the largest urban railway operator in the UK — and international services are predicted to face ongoing competition from short-distance sea ferry operators and low-cost airlines. which operates between Folkestone and Calais. Travel & Tourism Rail Travel Urban Rail Services Local urban and suburban services. which serves both business and leisure markets.

4 4.839 6.313 6.3 6.015 2.1 8.948 5.437 10.0 5.0 36 9.457 2.6 1.2 2010 6.9 6.6 1.Market Forecasts: Transport.1 9.1 10.288 6. Travel & Tourism Rail Travel Table 17: Forecast Passenger Receipts on UK Rail Systems at Current and Constant 2003 Prices (£m).7 5.7 AAV — annual average percentage variation † — includes Underground.7 2.8 782 5. Source: Key Note © Key Note Ltd 2009 59 .8 6.640 2.6 7.5 6.369 2009 5.7 743 6.678 5.815 25 5.5 6.6 27 8.1 30 11.5 9.3 1.850 5.758 4.1 927 5.2 828 5.050 6.131 7.0 2.721 6.9 2011 6.6 33 10.579 7.0 2008 National rail % change year-on-year Urban rail† % change year-on-year International rail‡ % change year-on-year Northern Ireland Railways % change year-on-year Total % change year-on-year Total at constant 2003 prices % change year-on-year 1.3 877 5.8 6.9 2012 7. Years Ending March 2008-2012 AAV % 20072012 7.040 7. metro and tram services ‡ — Eurostar and Eurotunnel Passenger Shuttle Note: total constant 2003 prices are based on the assumption that rail fares increase on average across all networks by 1% above retail price index (RPI).047 5.9 7.830 2.0 8.2 1.

663 30.7 0.893 62.761 2012 32.209 † — does not sum due to rounding by source Source: Projections Database (2006-based projections).7 0. Already.072 31. Table 18: Forecast UK Resident Population by Sex (000 and %). although this will be offset. Mid-Years 2008-2012 2008 Females Males Total % change year-on year 0. the UK population is likely to grow at an average rate of 0. in 2007. According to National Statistics’ Population Trends Winter 2007.412 2009 31.646 62. with one of the most noticeable features being that the average age is steadily increasing as people are living longer and the birth rate is slowing down. Government Actuary’s Department © Crown copyright © Key Note Ltd 2009 60 .4% (see Table 18). over the next 25 years. Travel & Tourism Rail Travel FUTURE TRENDS Demographics Based on predictions of the UK Government Actuary’s Department.8 million. it was estimated that. by the fact that the immigrant population is likely to be younger than the resident population.7 31. it is projected that the proportion of the UK population aged 65 and over will rise by 63%. the number of people of state pensionable age exceeded the number of children under 16.262 30.138 †63. The composition of the population is also changing.7 0. for the first time.868 30. while the population aged under 16 will rise by just 11%.858 2010 31.Market Forecasts: Transport.309 2011 31.461 30.7% per year over the next 5 years (2008 to 2012).7 0.8 million. to some extent. to 12.397 61. a significant upward adjustment from earlier growth rate predictions of 0. to 15.150 61.

© Key Note Ltd 2009 61 . In summary.Market Forecasts: Transport. and to have only a minimal impact over the period covered by the following forecasts. Many rail operators have already demonstrated a recognition of some of these trends by providing special offers. Published in July 2007. are likely to have only a short-term effect on many of the markets considered in this report. such concerns are likely to have only a minimal impact on economic growth or transport demand. Travel & Tourism Rail Travel Overall. with more attention having to be paid to the needs of the older sections of the population. and transport systems are always near the top of the list of terrorist targets — as has been seen in the attacks of July 2005 on the London Underground — and the railway system continues to be vulnerable. in the absence of an actual attack. there are likely to be implications for the rail travel market. the Government still plays a crucial role in determining the strategy for its development and in providing financial support. However. Regulatory Policy Framework Although it is now more than 10 years since the privatisation of the national rail system. including a decline in the proportion of the population that is of working age and. Political Uncertainties International Terrorism Terrorist acts undoubtedly have some impact on the willingness of individuals to travel. White Paper — Delivering a Sustainable Railway Now that most of the proposals contained in the government White Paper The Future of Rail and the Railways Act 2005 have been implemented. this incorporates a long-term strategy for the rail sector and a so-called High Level Output Specification (HLOS). which are seen by many security experts to be almost inevitable. of relevance to any consideration of the sector’s future. such as discounts for older passengers travelling outside peak times. There is also likely to be a change in the nature of leisure travel demand. Trends in evolving government policy are. therefore. who already account for a significant proportion of travellers on some urban rail systems. the most recent comprehensive guide to the direction of future government policy is contained in the White Paper Delivering a Sustainable Railway. However. experience also suggests that even terrorist attacks themselves. since much rail travel is associated with the journey to work and other trips that are regarded as relatively essential. in the number of commuters and business travellers. therefore. whether for business or for leisure purposes. although the the threat of terrorism remains and consequent uncertainties associated with the national and international security situation persist. some of these effects are likely to be felt only in the longer term.

the franchise system allocates entire local networks to particular operators. what it wants to be achieved during the period between 1st April 2009 and 31st March 2014. Technological Changes The development of the Internet as a means of marketing and distributing rail travel has some way to go before it reaches the level of exploitation achieved in many other areas of the travel business. New Services Eurostar Eurostar has plans to expand its route network by introducing services from London to Amsterdam. in competition with Virgin Trains between London Euston and Birmingham New Street. which rely on the Internet almost exclusively as a means of marketing and selling their products. Rail Competition In the UK. competition certainly exists in relation to the franchise application process. which are aimed at increasing the capacity of the railway. Many of the railway assets being procured today will have a lifespan of 30 years or more. Travel & Tourism Rail Travel This meets the requirement which specifies. There are clear differences between what is an appropriate approach in the distribution of rail travel services and what is acceptable in the case of air travel. delivering a quality service for passengers and fulfilling rail’s environmental potential. limiting opportunities for head-to-head competition between operators of the kind that is common with other modes of transport. and this. © Key Note Ltd 2009 62 . while the White Paper also sets out three ‘long-term agendas’. Chiltern Railways. These plans included the introduction of obligations to particular TOCs with respect to delays caused by engineering works. However. Nevertheless. notably air travel. However. For example. as laid down in the Railways Act 2005. therefore. is a key reason why such a long-term rail strategy is deemed to be necessary. one of the smallest TOCs. such as easyJet and Ryanair. there are lessons to be learnt from the examples of low-cost airlines. operates services between London Marylebone and Birmingham Snow Hill. The HLOS contains a Statement of Funds Available (SoFA) during the period. and an availability measure has also been proposed that is designed to reduce the number of route closures.Market Forecasts: Transport. the ORR published its plans to increase Network Rail’s accountability for its performance and reduce its costs through efficiency savings. there are a few such opportunities. that the Government should define for the Office of Rail Regulation (ORR) and the rail industry in general. Cologne and beyond over the next few years. Network Rail Targets In February 2008.

Market Forecasts: Transport, Travel & Tourism

Rail Travel

Renaissance Trains
Renaissance Trains, a company set up in 1997 to promote and invest in open-access passenger and freight rail businesses, is currently involved in a number of projects across the UK. Hull Trains is an example of such a project that is already in operation, with Wrexham & Shropshire starting in spring 2008. Other services that are planned to be launched in 2008 are: Glasgow Trains, providing services between Liverpool and Glasgow; and Humber Coast and City Trains, to run services between the City of London, Lincoln and Humberside.

Transport for London
In November 2008, Transport for London (TfL) took over control of several surface rail operations from Silverlink Metro, and now has plans for additional services on routes operated as part of the London Overground concession.

Modernisation and Investment Projects
Crossrail
Crossrail is a proposed new East-West railway, linking Maidenhead and Heathrow with Shenfield and Abbey Wood through new tunnels under central London. In 2001, a company — Cross London Rail Links — was established as a 50/50 joint venture between TfL and the Department for Transport (DfT), to promote its development. After public consultation and Parliamentary consideration, the scheme was approved by the Government in October 2007, with construction due to start in 2010 and services commencing in 2020.

Cross River Tram
If approved, the Cross River Tram would provide an on-street tramway service between London’s Euston and Waterloo stations, with branches to Camden Town and King’s Cross in the North, and Brixton and Peckham in the South.

Croydon Tramlink
Another London light rail project is a proposed extension of the Croydon Tramlink to Crystal Palace. This has yet to secure government approval or funding, and the earliest it could start operating would be 2013.

Docklands Light Railway Extensions
The enhancements that are currently taking place on the Docklands Light Railway (DLR) network will provide for an anticipated increase in the number of visitors to the area during the 2012 Olympic Games, as well as catering for the needs of other visitors and local residents. Extensions already under construction include routes to Woolwich Arsenal (due to open in 2009) and Stratford International Station (due to begin operating in 2010).

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Market Forecasts: Transport, Travel & Tourism

Rail Travel

Edinburgh Light Rail
A proposal for a new tramway network for Edinburgh has been approved by the City of Edinburgh Council and the Scottish Executive. This scheme, which will cost £545m to construct, is scheduled to commence operation in 2011. Preparatory work to relocate underground cables and pipes that are beneath the proposed track has already begun, and the main construction effort is expected to start later in 2008. These proposals are taking place under the auspices of Transport Initiatives Edinburgh (TIE), described as ‘an arm’s length council-owned company’. This organisation is also planning to deliver a number of other major public transport schemes in the area over the next 10 to 15 years, including a proposed West Edinburgh Guided Busway, and a heavy rail link to Edinburgh airport.

Rolling Stock
In January 2008, the UK Government published its plans for new trains, following its earlier commitment to provide 1,300 additional carriages across the national rail network. It was, however, made clear that some of the TOCs facing continuing increases in passenger numbers might not see this new rolling stock before 2014.

Thameslink Programme
The Thameslink Programme is a scheme aimed at tackling overcrowding on the Thameslink North-South routes through London, involving a £3.55bn investment. The project will provide 50% longer trains across the current network, offer new direct services to additional destinations on the Thameslink route, and reduce overcrowding on the Underground. The project involves Network Rail in the construction of new track and stations, and in the provision of extended platforms and improved signalling. Although the full benefit of the scheme is not expected to be realised before the end of 2015, some improvement to services should be experienced before the start of the 2012 London Olympic Games.

West Coast Main Line
Despite many difficulties experienced in the modernisation of the West Coast Main Line, the present project is intended to be completed by the end of 2008. New timetables are due to be implemented at this time, which will significantly increase the frequency of services and reduce journey times on inter-city routes. In late 2007, the DfT invited comments on proposed timetables covering the services of the three train operators affected: Virgin West Coast; Trans Pennine Express; and Govia.

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Market Forecasts: Transport, Travel & Tourism

Rail Travel

Other Continuing Issues
Unlike some other sectors of the UK passenger transport industry, the domestic rail sector is fairly mature and, consequently, in many respects, the future is likely to represent a continuation of the past. Many other matters are, however, likely to remain live issues over the next 5 years (to 2012) and even beyond. Examples of such issues include:

• the impact of demographic change on the type and volume of public
transport services

• the impact of franchising policy on the rail sector • the role of the Internet in providing information about rail transport
services and supplying an efficient means of distributing it

• the need for financial support for certain public passenger transport
services on social grounds

• the Government’s policy of reducing the burden on the general taxpayer by
requiring a higher proportion of rail investment expenditure to be paid for through fares increases

• concern for the environment and its impact on transport operations • the possibility that taxes and charges of various kinds will be used as a
mechanism to discourage the use of the more environmentally damaging forms of transport.

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since domestic travellers have historically been far more able than overseas travellers to arrange their own travel and accommodation. which rarely require the services of travel agents or tour operators. Outbound Tourism The outbound sector of the UK travel and tourism market — which covers UK residents travelling abroad — is the main sector served by travel agents and tour operators. MARKET SECTORS The travel and tourism market can be analysed in a number of ways. through the Internet) without the services of an intermediary such as a retail travel agent or an overseas tour operator. but exclude domestic day trips. the market is divided into consumer sectors — outbound and domestic travel. Unless otherwise stated. However. road. © Key Note Ltd 2009 66 . including the following primary categories: • by main mode of transport used to reach the destination (e. air or sea) • by duration of trip (holidays. Journeys to work are not included in this definition. this situation is changing as it becomes easier for individuals to plan and book their own travel (for example. The UK travel and tourism market comprises two main sectors: • overseas travel by UK residents — outbound tourism • travel within the UK by UK residents — domestic tourism. the statistics quoted in this analysis include day trips (trips not involving a night spent away from home) to overseas destinations. For the purposes of this summary. short breaks or day trips) • by consumer sector (outbound [overseas] or domestic travel). rail. Travel & Tourism Travel Agents & Overseas Tour Operators Travel Agents & Overseas Tour Operators REPORT COVERAGE This summary examines the market for services provided by UK travel agents and overseas tour operators.g.Market Forecasts: Transport.

85bn in 2012 — representing a 14.Market Forecasts: Transport. some airlines offer package tours by air within the UK. The substantial increase in the turnover of travel agents and tour operators is thought to have resulted in part from increased demand for packaged holidays by consumers. city. such as exclusive resorts. the share accounted for by the travel agents and tour operators could exceed around 42% in 2008. winter sports and adventure holidays.1% increase on 2008. expressed as a percentage of the UK resident tourism market.g. while others concentrate on particular sectors of this market. in many cases. and will be worth a projected £66. there have been a number of different types of tour operator. price increases by the tour operators and reductions in capacity by the leading operators — which in turn reduced the need for discounting. sailing and theme-park trips). FORECASTS 2008 TO 2012 The Total Market Key Note forecasts that the value of the UK resident tourism market will increase by around 3. © Key Note Ltd 2009 67 .3% in 2008 to around £58. However. Exceptions to this include coach tours (which are marketed in a variety of ways. the projected increase in the share of the market accounted for by travel agents and tour operators should be taken into account. Travel & Tourism Travel Agents & Overseas Tour Operators Traditionally. and a few cruise lines also offer cruises in UK domestic waters. Some serve the mass market. such as through retail travel agents and directly by coach tour operators). then. Domestic Tourism Domestic holiday travel is less likely than overseas travel to involve travel agents and tour operators. the holiday destination is reached by car or independently booked rail travel. In addition. real growth in the market is expected to resume. golfing. Holidays (including short breaks) within the UK are sometimes marketed by travel agencies and tour operators. as. High levels of inflation are likely to take their toll on real growth rates in the early years of the review period. If the higher levels of turnover achieved by these companies in the first 5 months of 2008 are maintained for the year as a whole.6bn. These types of holidays are marketed both as full-length vacations and as short breaks (e. age-related holidays. although if inflation starts to fall again towards the end of the period.

600 3. By 2012.3 Total % change year-on-year Turnover of travel agents and tour operators (£m)§ % change year-on-year Turnover of travel agents and tour operators as a % of total tourism expenditure † — excluding fares ‡ — excluding day trips 24. expenditure is projected to increase by 3.7% increase on 2008).0 42.72bn.4 42.1 2011 41.0 58.310 2.4 42.5 62.0 27. slightly higher rates of growth are forecast.95bn by 2012 (a 17% advance on 2008).0 22.985 1.850 4.720 3.000 3. 2008-2012 2008 Outbound tourism (£m)† % change year-on-year Domestic tourism (£m)‡ % change year-on-year 2009 38.5% increase on the previous year. expenditure is forecast to rise to £42.0 66.085 3. and the number of bed nights spent is expected to edge up to 706 million — a 0.3 36. Travel & Tourism Travel Agents & Overseas Tour Operators Table 19: The Forecast UK Resident Tourism Market by Sector by Value (£m and %). the number of trips undertaken is projected to reach around 76. although the rates of expansion will again be modest.5 23.0 27.7 million.5 21.0 60.5 22.310 2. Market conditions and growth rates in 2009 are expected to be similar to 2008. The number of trips undertaken is forecast to rise by around 1% to 70.160 3.0 22.4 42.5% to £36.Market Forecasts: Transport.875 3.5 64.9 2010 39.0 26.6% increase on 2008.850 10.4 41. and 760 million bed nights are forecast to be spent in 2012 — a 7.970 3.595 3.2 million (a 7.165 3. © Key Note Ltd 2009 68 .8 § — excluding local Northern Ireland enterprises Source: Key Note Outbound Tourism Key Note forecasts that the UK outbound travel and tourism market will show some further growth in 2008.520 4.900 4.1 2012 42.0 25.645 1. although thereafter and up to 2012.370 3.100 4.950 4.

0 72. oil prices are now on the decline as the current economic downturn threatens to reduce the demand for gasoline (as at October 2008).870 2.5 760 2. © Key Note Ltd 2009 69 . including day trips 2009 38.1 2012 42. 000 and million).520 4.0 706 0.0 713 1. although several opportunities are also presenting themselves.0 742 2.0 74. One positive trend that may aid the market is the falling cost of fuel — after reaching a record high in July 2008. could make domestic breaks more attractive — and the possibility that during the economic slowdown.000 3.730 1.5 Source: Key Note Domestic Tourism The UK domestic travel and tourism market faces a number of threats in 2008.190 2.4 36.0 2010 39. 2008-2012 2008 Expenditure (£m)† % change year-on-year Trips (000)‡ % change year-on-year Bed nights (million) % change year-on-year † — excluding fares ‡ — trips of less than 1 year. Increases in operating costs — due to increased taxation and soaring food prices — are other major causes for concern.Market Forecasts: Transport. Other positive factors include the fall in the value of sterling against the euro — which. as European breaks increase in cost. consumers may choose to holiday within the UK rather than travel abroad in order to save costs.720 3.950 4.440 1.330 2.5 71.5 76.0 727 2.0 2011 41. Travel & Tourism Travel Agents & Overseas Tour Operators Table 20: The Forecast UK Outbound Travel and Tourism Market by Value and Volume (£m.100 4.5 70. The threats include the current depressed state of the UK economy and the impact this will have on the holiday and business markets.

5 124.625 0.1 2012 23.2 2010 22.370 0.310 2. Travel & Tourism Travel Agents & Overseas Tour Operators Key Note forecasts that some growth will be witnessed for the year as a whole. A number of airlines have already stopped trading in 2008.5 396. 000 and million). American Airlines and the Spanish airline Iberia have signed a joint business agreement on flights between North America and Europe.6 0. © Key Note Ltd 2009 70 .1 397.0 1.5 21.875 3.500 0.5 124.2 397. to improve efficiencies and save costs.985 1.495 1. The airline industry is also predicting that high oil prices will provoke more airline failures and consolidation in 2008 and 2009.1 398. The London Olympics in 2012 are expected to provide a positive stimulus to the market.645 1. although the increases will only be modest. British Airways (BA).5 404.0 124.4 0.Market Forecasts: Transport.0 124.0 0.2 0.900 4. Further growth thereafter and up to 2012 is likely to be affected again by the economic climate in the UK and the extent to which this has an impact on the propensity of consumers and businesses to undertake domestic holidays and business trips. 2008-2012 2008 Expenditure (£m)† % change year-on-year Trips (000)‡ % change year-on-year Bed nights (million) % change year-on-year † — excluding day trips 2009 22.5 Source: Key Note FUTURE TRENDS Airlines Are Under Pressure Airline chiefs are concerned that soaring oil prices have pushed surcharges and other extra costs so high that passengers are being put off flying. Table 21: The Forecast UK Domestic Travel and Tourism Market by Value and Volume (£m. and.0 126.1 2011 22. and that the industry could be facing its most severe challenge to date.120 0.

and 11 fewer aircraft in summer 2009 than in the current year. for example. with a significant increase in bookings on the Web. Early signs for winter 2008/2009 and summer 2009 are also encouraging. and by between 2% and 4% in most other mainstream source markets. E-Commerce Bookings Continue to Rise The use of the Internet to book holidays is expected to increase further up to 2012. 53% of Thomas Cook’s bookings in Northern Europe were made via the Internet. 26% of its bookings for summer 2008 were made online. for instance. its average prices would need to rise by around 6% in the UK. In June 2008. Capacity for the summer 2009 season will be reduced by 15% compared with 2008. with total tour operator bookings through its main website being up year-on-year by 89% and 113%. and in the UK. that it continues to see rapid growth in its two largest e-commerce businesses. © Key Note Ltd 2009 71 . and to meet exchange rates and all other cost inflation in its financial year ending September 2009. The company is now planning to operate six fewer aircraft in winter 2008/2009. Thomas Cook has stated. through a reduction of its third-party flying programme and the removal of a further long-haul aircraft. TUI has also indicated that. respectively. Travel & Tourism Travel Agents & Overseas Tour Operators TUI Aims to Reduce Capacity in the UK TUI Travel PLC aims to reduce capacity in its UK business for summer 2009 and winter 2008/2009. The cost inflation in the UK will be higher due to the strengthening of the euro against the pound.Market Forecasts: Transport. Capacity in its winter 2008/2009 season overall will be reduced by 21%. in order to recover fuel costs.

4%. at an average annual rate of 2. FORECASTS 2008 TO 2012 Supported by rising imports.36bn. construction or industrial handling vehicles and machines.5%. buses and lorries. will raise the value of the market to £1. aircraft. civil engineering vehicles. to a lesser extent. MARKET SECTORS The market is segmented by the types of vehicles for which tyres are used. Already a feature of the market for some years. between 2003 and 2007.3%. The UK tyre manufacturing industry continues to experience difficult trading conditions. the apparent UK market for rubber tyres and tubes increased by an estimated 15. this trend is expected to continue in the future. to £1.Market Forecasts: Transport. agricultural and forestry vehicles. The majority of tyres sold in the UK are fitted to passenger cars and commercial vehicles. and construction or industrial handling vehicles and machines. © Key Note Ltd 2009 72 . civil engineering vehicles. for motor cars. bicycles. Travel & Tourism Tyre Industry Tyre Industry REPORT COVERAGE This summary covers the UK market for rubber tyres and tubes. including buses and lorries. Rubber inner tubes are used mainly for bicycles and. Smaller quantities are fitted to motorcycles and scooters. Key Note expects this steady advance in the value of the market to continue over the next 5 years and forecasts that overall growth of 10. as imports — some from low-cost manufacturing countries in Asia and Eastern Europe — account for an increasing share of the market. aircraft. bicycles. and solid tyres • retread tyres. The main sectors are: • tyres for passenger vehicles • tyres for light commercial vehicles • tyres for heavy commercial vehicles • tyres for motor cycles and scooters • other tyres — including tyres for agricultural vehicles.54bn by 2012.

compared with 2006.000 1.000 vehicles.571 1. to 1.Market Forecasts: Transport.5%. New vehicle registrations in the UK are also unlikely to increase substantially over the forecast period.29 million vehicles were produced in the UK in the 9 months to September 2007. Honda.394. and although the number of cars on UK roads is steadily rising.46 million. New vehicles from Mini. the annual growth is also fairly low.5 2.538. According to the Society of Motor Manufacturers and Traders (SMMT). © Key Note Ltd 2009 73 .5 2.5 2. to nearly 157. The SMMT has forecast a rise of around 1.5 2. vehicle production in the UK is expected to have risen in 2007.850 1.13 million.2%. Production of commercial vehicles increased by 3. FUTURE TRENDS UK Vehicle Production is Ahead in the First 9 Months of 2007 Vehicle production in the UK in the first 9 months of 2007 was higher than in the corresponding period in 2006. 1.464. to 1.501.428. Travel & Tourism Tyre Industry Table 22: The Forecast Apparent UK Market for Rubber Tyres and Tubes by Value (£000 at msp).1% higher than in 2006. however. which rose by 1.9% over the period. with new vehicle registrations showing some improvement over 2006.715 msp — manufacturers’ selling prices Source: Key Note Factors such as the ongoing vulnerability of UK tyre-manufacturing plants and competition from low-cost producer countries prevent forecasts at a higher level. which was 2.185 1.5 2009 2010 2011 2012 1. in the number of cars produced in the UK as a whole in 2007. In the short term. 2008-2012 2008 Value (£bn) % change year-on-year 2. Land Rover and Nissan all contributed to the increase in the number of passenger cars produced.

Market Forecasts: Transport. The market for replacement tyres will experience higher rates of annual growth. In addition to these countries. new production capacity and distribution networks are also being set up in countries such as Russia. UK Tyre Retailers Revamp Their Operations A number of the UK’s leading fast-fit tyre-fitting businesses have announced plans to develop their operations.7% per year over the next decade (up to 2016). © Key Note Ltd 2009 74 . HiQ plans to add at least another 100 franchised centres to its existing 150-strong network over the 3 years (by the end of 2009). visiting a fast-fit outlet can be a negative experience.2%. HiQ has also introduced open and honest pricing based on the principle ‘the price we quote is the price you pay’ and an online service that allows customers to purchase their tyres online and choose when and where they want to have them fitted. The North American market is forecast to grow by an average of 1. Overall.5% per year. estimated at 3% per year to 2016. compared with 2% for original equipment (OE). HiQ As a result of concerns that. Europe is set to experience annual. average growth of 2. this could amount to an additional 300 million tyres being produced by around 2016. Goodyear plans to build new tyre factories in Asia and Eastern Europe and Hankook has recently started delivering tyres from its newly constructed plant in Hungary. For example. Cooper Tire & Rubber Company and Continental Tyre Group have both established new manufacturing plants in the People’s Republic of China. and Bridgestone is developing its plants in countries such as India and Indonesia. World Tyre Production Set to Increase According to Michelin’s 2006 Annual Report. Travel & Tourism Tyre Industry Leading Tyre Manufacturers Increase Their Presence in Asia Many of the leading international tyre manufacturers continue to switch their production facilities to low-cost countries. Brazil and Thailand. A training academy has been set up to improve staff standards.4% and Asia could see growth rates of 4. for some customers. although at different paces in the various regions. HiQ has embarked on a 3-year programme that includes the redevelopment of all of its centres to bring them in line with customer expectations. Michelin is similarly expanding production at its plant in Poland. The trend for establishing and increasing production plants and facilities in low-cost countries is ongoing and will continue to put pressure on higher-cost plants in Europe and North America. the global market for passenger-car and light-truck tyres is expected to grow by 2.

air-conditioning units and windscreens. It also offers information on how to care for tyres. © Key Note Ltd 2009 75 . brakes. batteries. National Tyres and Autocare National Tyres and Autocare has embarked on a refurbishment programme for a number of its branches across the UK. This includes investment into branch exteriors and signage. as well as information on tyre safety. exhausts. It follows on from National’s recent investment in MOT centres and a brakes programme that was rolled out in 2006 as part of National’s development strategy for the company. shock absorbers.Market Forecasts: Transport. retail websites and a locate-a-centre text service. The website details the company’s services. Travel & Tourism Tyre Industry Kwik-Fit Kwik-Fit has launched a new-look fleet. and upgrading branch interiors.

CVC Capital Partners and Permira decided to merge the AA with the Saga Group. Travel & Tourism Vehicle Breakdown Services Vehicle Breakdown Services DEFINITION In recent years. Various levels of breakdown cover are offered by the leading providers. Extra income is subsequently generated by offering a wide variety of additional services to the membership. such as Aviva PLC. Insurance companies. cruises. so the cost of the basic service is kept relatively low. The Saga Group has 2. New entrants. which provides holidays. online services are making it ever easier for buyers to shop around for the best deals.Market Forecasts: Transport. ranging from basic roadside assistance and home start to the transportation of the broken-down vehicle to the member’s choice of destination. MARKET SECTORS There are four main sectors of the vehicle breakdown market. have realised the benefits that could be gained through ownership of vehicle breakdown companies and respectively acquired the RAC. Breakdowns are less common than in the past. so as to attract new members and retain existing members. The France-based Mondial Assistance is also partly owned by the Allianz Group. During 2007. In addition. some of which have the potential to generate considerable income. in that it was acquired in 2004 by two European private-equity firms — CVC Capital Partners and Permira. have entered the market with inexpensive vehicle breakdown options and these are now challenging the dominance of the market leaders — the AA and the RAC. Ownership of the AA differs from the other leading providers of vehicle breakdown services.5 million customers and the merger will enable the AA to cross-sell to these members. others operate in just one. These are: • the private/retail sector • the commercial sector • the third-party sector • the ad-hoc sector. a development that has further increased the competitive nature of the market. the vehicle breakdown market has become increasingly competitive. © Key Note Ltd 2009 76 . Another trend has involved changes in the ownership of the leading vehicle breakdown services suppliers. including insurance companies and supermarkets. Direct Line Insurance PLC and Liverpool Victoria Insurance Ltd. insurance and financial services to the over-50s market. a leading insurer. Some companies operate in two or three of these sectors. Green Flag and Britannia Rescue Services.

Green Flag.0 1. Ad-hoc breakdown and recovery services are for motorists not covered by breakdown cover or insurance. FORECASTS Key Note forecasts that the market for vehicle recovery services will increase by 3.6 2010 1. affinity groups or as part of a car manufacturer’s warranty. a 18.1% increase on 2008. Table 23: The Forecast UK Market for Vehicle Recovery Services by Value (£m). The private or retail sector also includes third-party providers. The steady increase in the number of vehicles on the road. the RAC (RAC Business) and Mondial Assistance are among the companies that service this market.248 3.293 3. with the value of the sector being worth an estimated £1. Thereafter and up to 2012.25bn in 2008 and then maintain a similar level of growth (3.475 5. Britannia Rescue Services and Europ Assistance come into this category.4% to £1. Travel & Tourism Vehicle Breakdown Services The private or retail sector covers motorists who belong to motoring organisations such as the AA and the RAC.4 Source: Key Note © Key Note Ltd 2009 77 .5 2012 1.405 4. the trend towards two-car households and the relatively low cost of the basic vehicle recovery insurance are among the factors expected to sustain growth over the forecast period.6%) in 2009. a steadily rising population. The AA (AA Fleetwide). In the event of a breakdown.48bn in 2012.Market Forecasts: Transport. The commercial sector offers breakdown services to businesses with fleets of cars or commercial vehicles. 2008-2012 2008 Value (£m) % change year-on-year 2009 1.0 2011 1. the rate of expansion is projected to steadily and gradually rise. these motorists often contact a local garage or a recovery organisation.345 4. which offer services to individual motorists through insurance packages.

Trade sources. In addition.Market Forecasts: Transport. Key Note undertakes various types of research: Online searching is carried out by product code or free search method. the number of disabled people in the UK). quality market information. etc. With over 25 years’ experience. various official publications published by National Statistics. publishing an extensive range of consumer. Secondary data are provided by BMRB International (TGI) and Nielsen Media Research for consumer/demographic information and advertising expenditure respectively. The financial information extracted may then be backed up by further online searching on particular companies.g. The internal my ICC service is used to select company information relevant to the particular report. and covers the period from the last edition of the report to the current day. Field research is commissioned for various consumer reports and market reviews. industrial. Up-to-date figures are inserted where possible. Key Note represents clear. and is carried out by NEMS Market Research. questionnaires may also be used. are invaluable to the Key Note research process. business-to-business and services titles. are used for essential background data and market trends. although there will be some instances where: a realistic estimate cannot be made (e. This provides qualitative data (‘industry comment’) to enhance the statistics in reports. Key Note Editorial Manager. or external sources request that we do not update their figures. either face-to-face or by telephone. For all reports. 2008 © Key Note Ltd 2009 78 . trade journals and specific company contacts. Key Note estimates are derived from statistical analysis and trade research carried out by experienced research analysts. Interviews are undertaken by Key Note for various reports. such as trade associations. Travel & Tourism Key Note Research Key Note Research Key Note is a leading supplier of market information. concise.

lifestyle. across both the Key Note and Market Assessment product ranges. Travel & Tourism The Key Note Range of Reports The Key Note Range of Reports Key Note publishes over 180 titles each year. The total range covers consumer. Title Edition Published Title Edition Published Market Reports and Reports Plus A China & Earthenware Cigarettes & Tobacco Cinemas & Theatres Closed-Circuit Television Clothing Manufacturing Clothing Retailing Commercial Radio Commercial Vehicles Computer Hardware Computer Services Computer Software Confectionery Consumer Internet Usage Consumer Magazines Contraception Contract Catering & Foodservice Management Contract Cleaning Cooking Sauces & Food Seasonings Corporate & Promotional Giftware Corporate Hospitality Cosmetics & Fragrances Cosmetic Surgery Courier & Express Services D 25 22 9 10 15 6 8 15 7 8 7 27 4 15 4 20 20 3 3 6 21 6 15 3 5 10 3 3 2 18 6 12 1 13 5 2008 2008 2001 2008 2008 2007 2004 2009 2008 2008 2008 2009 2000 2008 2009 2007 2008 2008 2008 2007 2008 2008 2008 2004 2008 2006 2000 2008 2003 2007 2007 2007 2007 2007 2005 Access Control Accountancy Aerospace Agrochemicals & Fertilisers Air Freight Airlines Airports Animal Feedstuffs Arts & Media Sponsorship Automatic Vending Automotive Services Autoparts B 10 12 12 3 2 19 12 11 3 23 6 19 13 2 21 15 19 15 23 14 27 15 3 16 9 13 9 13 10 13 16 16 11 12 7 14 2008 2008 2003 2002 2005 2008 2008 2001 2008 2009 2008 2009 2007 2007 2008 2008 2007 2008 2008 2009 2008 2008 2007 2008 2006 2008 2008 2007 2004 2002 2008 2009 2008 2008 2007 2008 Baths & Sanitaryware Bearings Betting & Gaming Biscuits & Cakes Book Publishing Bookselling Bread & Bakery Products Breakfast Cereals Breweries & the Beer Market Bricks & Tiles Bridalwear Builders’ Merchants Building Contracting Building Materials Bus & Coach Operators Business Press C Dark Spirits & Liqueurs Debt Management (Commercial & Consumer) Defence Equipment Design Consultancies Digital Broadcasting Digital TV Direct Marketing Discount Retailing Disposable Paper Products Document Imaging Systems Domestic Heating Dry Cleaning & Laundry Services Cable & Satellite TV Camping & Caravanning Canned Foods Carpets & Floorcoverings Catering Equipment Chemical Industry Childrenswear Chilled Foods © Key Note Ltd 2009 79 .Market Forecasts: Transport. financial services and industrial sectors.

Market Forecasts: Transport. Travel & Tourism The Key Note Range of Reports Title E Edition Published Title H Edition Published Electrical Contracting Electrical Wholesale Electricity Industry Electronic Component Distribution Electronic Component Manufacturing Electronic Games Equipment for the Disabled Equipment Leasing Estate Agents Ethnic Foods Exhibitions & Conferences F 8 5 5 12 11 4 4 12 17 14 10 2006 2009 2006 2002 2002 2003 2006 2003 2008 2007 2008 Hand Luggage & Leather Goods Health Clubs & Leisure Centres Health Foods Heating. Ventilating & Air Conditioning Home Furnishings Home Shopping Horticultural Retailing Hotels Housebuilding Household Appliances (Brown Goods) Household Appliances (White Goods) 14 9 22 9 18 12 17 23 18 11 16 15 18 2008 2009 2003 2002 2008 2008 2008 2008 2009 2008 2008 2007 2008 Factoring & Invoice Discounting Fast Food & Home Delivery Outlets The Film Industry Finance Houses Fire Protection Equipment Fish & Fish Products Fitted Kitchens Football Clubs & Finance Footwear Franchising Free-To-Air TV Freight Forwarding Frozen Foods Fruit Juices & Health Drinks Fruit & Vegetables Further & Higher Education G 2 23 4 11 8 13 7 3 15 11 8 16 23 12 20 5 12 4 17 14 24 2003 2008 2002 2000 2006 2008 2007 2005 2007 2008 2004 2008 2008 2008 2007 2005 2006 2006 2008 2007 2008 Household Detergents & Cleaners Household Furniture I Ice Creams & Frozen Desserts Industrial Fasteners Industrial Pumps Industrial Valves Insurance Companies Internet Usage in Business IT Security IT Training J 12 8 5 8 11 8 8 11 24 6 9 14 8 10 1 19 16 4 22 6 2 2007 2001 2000 2001 2006 2005 2007 2007 2008 2007 2008 2002 2008 2003 2005 2008 2007 2004 2008 2005 2007 Jewellery & Watches K Kitchenware L Garden Equipment Gas Industry Giftware Glassware Greetings Cards Laboratory Equipment Lighting Equipment Lingerie M Management Consultants Market Forecasts Meat & Meat Products Medical Equipment Metal Recycling Milk & Dairy Products Mobile Phones Mobile Telecommunications © Key Note Ltd 2009 80 .

Travel & Tourism The Key Note Range of Reports Title N Edition Published Title S Edition Published Natural Products New Media Marketing Newspapers Non-Metal Recycling O 2 3 17 2 2007 2002 2008 2008 Sauces & Spreads Shopfitting Short Break Holidays Slimming Market Small Domestic Electrical Appliances 11 13 4 8 11 19 17 2 11 14 6 24 17 21 19 21 5 22 17 21 4 8 4 8 2008 2006 2001 2000 2007 2008 2008 2007 2007 2007 2007 2008 2008 2007 2008 2008 2001 2008 2008 2008 2008 2007 2007 2005 Office Furniture Offshore Oil & Gas Industry Ophthalmic Goods & Services OTC Pharmaceuticals Own Brands P 21 4 16 13 12 13 12 14 14 14 11 14 13 10 3 5 7 13 19 6 24 7 10 9 9 2 23 15 22 2008 2006 2008 2008 2007 2008 2003 2008 2003 2002 2000 2005 2007 2003 2008 2007 2007 2008 2008 2006 2008 2008 2008 2009 2009 2006 2008 2008 2009 Snack Foods Soft Drinks (Carbonated & Concentrated) Soup Market Sports Clothing & Footwear Sports Equipment Sports Sponsorship Stationery (Personal & Office) T Packaging (Glass) Packaging (Metals & Aerosols) Packaging (Paper & Board) Packaging (Plastics) Paper & Board Manufacturing Personal Banking Photocopiers & Fax Machines Plant Hire Plastics Processing Poultry Power Tools Premium Lagers.Market Forecasts: Transport. Beers & Ciders Printing Private Healthcare Protective Clothing & Equipment Public Houses R Take Home Trade Telecommunications Timber & Joinery Toiletries Tourist Attractions Toys & Games Training Travel Agents & Overseas Tour Operators Tyre Industry V Vehicle Security Videoconferencing Video & DVD Retail & Hire W Wallcoverings & Ceramic Tiles Waste Management Water Industry Windows & Doors Wine White Spirits 17 9 4 19 19 1 2006 2008 2007 2008 2008 2005 Rail Travel Ready Meals Recruitment Agencies (Permanent) Recruitment Agencies (Temporary & Contract) Renewable Energy Restaurants Retail Chemists & Drugstores Road Haulage Market Reviews Catering Market Clothing & Footwear Industry 20 12 2008 2008 © Key Note Ltd 2009 81 .

Travel & Tourism The Key Note Range of Reports Title Edition Published Title Edition Published UK Computer Market Construction Industry Contracted-Out Services Defence Industry Distribution Industry DIY & Home Improvements Industry Drinks Market Energy Industry Film Market Food Industry Healthcare Market Insurance Industry The Legal Services Market Leisure & Recreation Market Leisure in the Home Leisure Outside the Home Local Government Services Mechanical Handling Motor Industry Music Industry Office Equipment Industry Packaging (Food & Drink) Industry Passenger Travel in the UK Pharmaceuticals Industry Process Plant Industry Publishing Industry Railway Industry Security Industry Sports Market Travel & Tourism Market UK Internet Market 11 10 3 7 9 11 18 7 1 19 10 9 1 15 2 2 2 1 12 1 8 1 5 6 1 12 2 11 12 15 1 2004 2006 2007 2003 2007 2009 2008 2008 2006 2009 2005 2007 2005 2005 2008 2008 2007 2001 2008 2006 2006 2003 2007 2008 2000 2008 2006 2006 2008 2008 2009 Betting and Gaming Book Retailing on the Internet Bottled Water Bridalwear Business Postal Services B2B Marketing Business Travel Market C Cable and Satellite Services Charity Funding Childcare Children’s Publishing Clothing Retailers Coffee & Sandwich Shops Commercial Dynamics in Financial Services Commercial Insurance for Small Businesses Condiments and Sauces Consumer Credit & Debt Contact Centres Contraception Cooking & Eating Cross-Border Shopping Cruise Market Customer Loyalty in Financial Services Customer Magazines & Contract Publishing Customer Relationship Management Customer Services in Financial Organisations C2DE Consumer D Diet Foods DINKY Market Direct Insurance Direct Mortgages Domestic Lighting and Electrical Products Domestic Telecommunications E E-Commerce: The Internet Grocery Market E-Commerce: The Internet Leisure & Entertainment Market Electronic Banking EMU — The Impact on the UK Financial Services Industry E-Recruitment 2002 2007 2003 2002 2008 2008 2008 2002 2005 2008 2008 2000 2007 2005 2002 2008 2007 2007 2002 2007 2000 2008 2000 2007 2008 2007 2008 2007 2007 2007 2008 2000 2006 Market Assessment Reports A ABC1 Consumer Activity Holidays Advertising Agencies All-Inclusive Holidays Alternative Healthcare Audio-Visual Retailing B Baby Foods Baby Products Baths and Showers Beds. Bedrooms and Upholstered Furniture 2006 2008 2000 2000 2008 2006 2007 2000 2008 2000 2007 2008 2008 2003 2006 © Key Note Ltd 2009 82 .Market Forecasts: Transport.

Travel & Tourism The Key Note Range of Reports Title Edition Published Title Edition Published E-Shopping Estate Agents and Services Ethnic Foods European Electricity Industry European Gas Industry European Long-Term Insurance European Oil & Gas Industry European Renewable Energy Industry European Short Breaks European Telecommunications European Tourist Attractions European Trends in Food Shopping European Water Industry Extended Financial Families F Financial Services Marketing to ABs Financial Services Marketing to ABC1s Financial Services Marketing to C1C2DEs Financial Services Marketing to Over 60s Financial Services Marketing to the Retired and Elderly Financial Services Marketing to Start-Up Businesses and the Self-Employed Financial Services Organisations on the Internet The Fish Industry Forecourt Retailing Functional Foods Funding in Higher Education G General Insurance Generation Y Global Waste Management Green and Ethical Consumer Grey Consumer H Healthy Eating Holiday Purchasing Patterns Home Entertainment Hot Beverages I In-Car Entertainment Independent Financial Advisers Individual Savings Accounts 2002 2007 2002 2007 2007 2008 2007 2008 2008 2002 2007 2009 2007 2005 2006 2000 2006 2004 2007 Insurance Prospects Internet Advertising Internet Service Providers Issues and Challenges in the UK Life Assurance Market Issues in Higher Education Funding IT Recruitment L Lifestyle Magazines Low-Fat & Reduced-Sugar Foods The Luggage Market M Marketing to Children 4-11 Marketing in the Digital Age Medical & Health Insurance Men and Women’s Buying Habits Men’s Toiletries & Fragrances Millennium Youth Motor Finance N The Newspaper Industry Non-Food Sales in Supermarkets Nutraceuticals O Off-Trade Spirits Opticians & Optical Goods Organic Baby & Toddler Care Organic Food & Drink OTC Pharmaceuticals Over-40s Consumer P Pay TV Pension Extenders Pensions Personal Banking Personal Lines Insurance Personal Loans Pet Market Planning for Retirement Plastic Cards in Europe Plus-Size Fashion Private Sector Opportunities in Education Public Relations Industry Public Transport 2008 2008 2005 2002 2006 2008 2008 2008 2000 2003 2006 2007 2008 2008 2002 2008 2005 2008 2008 2004 2008 2007 2008 2000 2005 2004 2002 2007 2003 2007 2008 2007 2008 2005 2005 2001 2007 2001 2003 2009 2001 2008 2008 2002 2008 2007 2007 2008 2006 2008 2006 2008 2009 2000 2008 2005 © Key Note Ltd 2009 83 .Market Forecasts: Transport.

Details supplied by Key Note should only be used as an aid. However. Travel & Tourism The Key Note Range of Reports Title Edition Published Title Edition Published R The Railway Industry Ready Meals Recycling and the Environment Retail Credit Retail Development Rural Economy S Savings & Investments Saving Trends in the Eurozone Singles Market Shopping Centres Short Breaks Slimming Market Small Businesses & Banks Small Office Home Office Consumer Small Office Home Office Products The Soup Market Sponsorship Supermarket Own Labels Supermarket Services Sweet & Salty Snacks 2007 2002 2007 2008 2004 2009 2002 2001 2001 2001 2000 2007 2007 2009 2004 2001 2000 2000 2001 2009 T Teenage Fashionwear Teenage Magazines Teleworking Trends in Food Shopping Trends in Leisure Activities Tweenagers U Utilities V Vegetarian Foods Vehicle Breakdown Services Vitamins. as of the date created.gov. copied.uk © Key Note Ltd 2009 84 . Designs and Patents Act 1988. It is the responsibility of the caller to ensure that these data are up to date. Under the new Privacy and Electronic Communications Regulations 2004. 72 Oldfield Road. due principally to the fact that data cannot always be verified. Key Note Ltd does not hold itself liable for any subsequent legalities. Key Note Ltd holds and regularly updates (every 28 days) its data in accordance with the regulations and ensures that its data are compliant. Telephone: 020-8481 8750 Stringent efforts have been made by Key Note to ensure accuracy.Market Forecasts: Transport. Hampton. stored in an electronic retrieval system or transmitted save with written permission or in accordance with the provisions of the Copyright. Minerals & Supplements W White Goods Women Over 45 Working Women 2000 2007 2006 2007 2008 2007 2007 2008 2007 2003 2008 2007 2005 © Key Note Ltd 2009 All rights reserved. If you have any queries regarding the CTPS legislation you may find the following website useful: www. No part of this publication may be reproduced. Field House. to assist the making of business decisions. Middlesex TW12 2HQ.informationcommissioner. it is possible that some errors or omissions may occur. not as the sole basis for taking such decisions. it is unlawful for a business to make an unsolicited sales & marketing call to a corporate subscriber if it is either registered with CTPS or has requested NOT to receive such calls. Key Note cannot accept responsibility for such errors or omissions. Published by Key Note Ltd.