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Future For... July 2001

ATTRACTING THE PINK POUND – SHORT

FLING OR LONG-TERM RELATIONSHIP?
By Annette Weiss*

“If Britain does not actively target this huge segment, it will lose out on a very
lucrative market.”

This was the conclusion of an Insights report on this topic in 1999. Since then,
a number of articles have been published on the gay travel market, including
reports by Mintel1 and Travel and Tourism Intelligence2, indicating a growing
interest in this sector. Drawing on these surveys and discussions with
operators, this report looks at the developing market for gay holidays and sees
how the tourism industry is responding.

The gay market: some key facts

● A lucrative market; big spenders with high propensity to travel.
● Mintel forecasts continued growth in this market.
● Only 4% of gay consumers require gay-themed holidays.
● Maturing market is now looking for greater product diversity as
alternative to resort-based holiday.
● City breaks an important and growing market.
● Travel suppliers and destinations becoming more receptive towards
the gay market.
● Only 3% book their holiday through specialised gay tour operators;
this presents an opportunity for both gay and mainstream operators D
who can provide tailor-made gay-friendly holidays (offering varied
activities, not just the standard beach package holiday as in the past).
Table 1

Tourism potential of the pink pound

Gay tourism is a lucrative market for the tourism industry. The gay community has a
high propensity to travel and because gay people are less likely to have children, they
have a higher disposable income and more youthful spending patterns. According to
Mintel, 72% of gay respondents had taken at least one holiday lasting a week or longer
within the previous year, compared to 61% of all adults. Multiple holidays are also more
common.

But how large is this sector and what is it worth? Estimating the size of the gay market
in terms of holidays is not easy, as this sector can not be readily identified and the large
majority of gay holidaymakers use mainstream suppliers for mainstream holidays.
Estimates based on population figures also vary, as there is little consensus regarding
the size of the gay population. Mintel has forecast that 4% of the adult population in
Britain is gay. But estimates in other countries such as Germany and the USA (Britain’s
largest inbound market) suggest a much larger gay population. Research by
Community Marketing3 suggests that the American gay and lesbian community
represents an estimated 10% of the US travel industry. The same research also
highlights why this market is so attractive to the industry, based on gay and lesbian
travel in 2000:

● 91% took holidays (national average is 64%),

● 49% took three or more holidays,
● 54% took an international holidays (national average is 9%),

*Annette Weiss is a consultant working for The Tourism Company, a consultancy specialising in tourism and leisure. She
can be reached on 020 7721 7180.

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● 84% hold a valid passport (national average is 29%),

● 76% have household incomes above the national average,
● 69% have Internet access (national average is 33%).

What does the market want?

Travel and Tourism Intelligence (TTI) writes that “traditionally companies have been
indifferent or even hostile to the idea of treating gay people as a separate consumer
group with different purchase preferences and behaviour”. But are the holiday
preferences of the so-called pink market really any different to other consumer groups
and, if so, what are the implications for the tourism industry? Recent research from
Mintel and other sources sheds some light on this:

Gay-friendly destinations
Mintel research showed that only a small minority (4%) of respondents required a
specifically gay-themed holiday. However, most respondents require some form of gay
friendliness and understanding, and were careful to avoid homophobic destinations;
58% of those surveyed agreed that they would not go to a resort or country that was
known to be homophobic.

Although more and more countries are opening their doors to gay visitors, there are still
some no-go destinations, such as the Cayman Islands (with its explicit ‘ban’ on gay and
lesbian travellers), parts of Africa, the Middle East, the Caribbean and some Latin
countries. In 1998, a cruise ship chartered by an American tour operator and carrying
900 gay men was refused entry to the Cayman Islands. Some tour operators, such as
Sandals, will only accept heterosexual couples in their resorts.

Traditional gay destinations rely heavily on their nightlife. These include European beach
D destinations (such as Mykonos, Ibiza, Gran Canaria, Lesbos and Sitges) and long haul
destinations, such as Florida and Sydney. However, as with the mainstream market, the
importance of nightlife varies with the type of holiday. It is likely to be one of the main
ingredients of a ‘sun and sea’ holiday in the Mediterranean, but will not feature as
strongly in a cycling tour of Britain. In the Mintel survey, over half the respondents agreed
it’s important to have some gay venues available on holiday. Agreement was much
stronger for gay or bisexual men at 64%, compared to 55% of gay/bisexual women.

Popularity of city breaks

Mintel research showed that 23% of the gay market had been on a city break,
compared to 9% of the mainstream market. Several reasons lie behind this difference.
Firstly, there is the appeal of the gay nightlife which is much more prolific in cities.
Another reason is the generally upmarket profile of gay travellers, giving rise to a
stronger interest in cities’ cultural life. A third factor is gay people’s higher travel
propensity, which makes it common for gay travellers to supplement a main holiday
with additional short breaks.

New city destinations are emerging all the time, such as Prague, Budapest and
Manchester. People are increasingly visiting cities as part of a wider cultural or activity-
based trip and TTI predict that this will see gay people travelling in significant numbers
to destinations not otherwise known for their gay life.

Gay-friendly product
Gay people want many of the same things as the mainstream market, namely a high
quality product, comfort, relaxation, good food, friendly and efficient customer service
etc. Where the market does vary is in the need for gay-friendly accommodation. Gay
travellers need reassurance that hotel accommodation has been given the ‘gay-friendly
seal of approval’, as 16% of those surveyed had received some sort of discrimination in
a hotel or guesthouse. The mainstream operators have started to respond, for example
BA and Virgin now ensure that all hotels used in their holiday brochures are gay friendly.

© English Tourism Council 2001

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Future For... July 2001

Specialist operators
As the gay market has matured, consumers are becoming more confident, and with a
greater selection of products now on the market they can afford to be more choosy.
However, the widespread view is that the industry has been slow to recognise the
potential of this market and very few companies cater specifically to their needs. Mintel
research shows that only 3% of gay travellers use a specialist gay travel agent or tour
operator. However, travel suppliers are becoming more receptive towards the gay
market and the number of specialised gay tour operators is increasing, although there
is still ample room for operators offering more diverse holiday packages.

Several mainstream travel operators, such as Going Places and Thomas Cook, have tried
to cater for the gay market but most have failed, often because they have not won the
trust and credibility of the gay community. It is vital to build up a relationship with this
sector before launching new products, as consumers are highly sensitive to false claims
of being gay-friendly. Tourism Trendspotter4 points out that although there is potential
in the gay holiday market “it is important that the tourism industry recognizes the
diversity of the gay community and does not develop products driven purely by
stereotypes”. Specialist gay operators tend to have more credibility with the gay
community, as they usually employ gay staff who can relate to and understand the
needs of gay travellers.

There are only three or four specialist gay tour operators in the UK dealing with the
inbound market, of which D Tours is the largest and most established. D Tours provided
the following overview of their market:

● The inbound gay market has grown and matured. People are looking for something
more diversified and cultural which will suit their individual needs. Gay men have
increasingly sophisticated tastes, partly because they now have more options. D
● Their clients want to do all the normal things that other tourists do. They want to
see Britain’s traditional tourist sights such as Stonehenge and Bath, but tend to use
London as their base. Visitor attractions and destinations with a gay connection are
popular (eg Oscar Wilde tours in London, Sissinghurst Garden visits for Virginia
Woolf fans).
● Most of their clients are couples or small groups of friends travelling together.
● D Tours are primarily involved in booking hotel accommodation and making ground
handling arrangements. They do sometimes offer upmarket packages for small
groups, but this is only a small part of their business.
● In their view, there is potential for travel suppliers in this market, but operators must
have a genuine interest in the gay and lesbian sector. According to D Tours, “It is
an insecure market and needs to be shown it’s loved. If you can show people you’re
interested, they will be very brand loyal”.

Diversifying the offer

Mintel’s findings show that this market wants to see a more diverse array of gay travel
products, getting away from the stereotypical gay beach holiday. There is clearly still
strong demand for the ‘sun, sea and sex’ resort-based holiday, however, there are now
many more options. Indeed, beach/resort holidays are only marginally more popular
than city breaks within the gay sector.

Peoples’ increasing sense of adventure is partly a reflection of the growing openness

and accessibility of new destinations to gay travellers, with people no longer restricted
to the safety of self-contained resorts.

The market is becoming more specialized and more segmented (the USA is at the
forefront), with a wider range of holidays aimed at specific markets (eg the lesbian
market, over 55s market etc) and specific activities (eg sports holidays, safari holidays,
ski holidays, rafting, cruises, eco-tours).

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A notable trend has been the growth in the lesbian market. According to gay operator
D Tours, the lesbian travel market is now where the gay (male) travel market was ten
years ago. Mintel estimates that it accounts for 5-15% of demand for gay-themed
holidays and lesbian amenities (bars and clubs) are still quite limited. However, the
market is growing, and there has been an increase in all-female resorts and holidays
aimed at lesbians.

There are also an increasing number of special interest national and international events
which are capable of generating significant numbers of gay tourists (eg Aspen Gay Ski
Week, Sydney Gay Games, Dinah Shore Golf Tournament in Palm Springs).

Promoting Britain as a gay destination

Given the growth and development of the gay and lesbian market, what has Britain
done to attract this market and how successful has it been?

According to BTA research, Britain is generally perceived as a “gay-friendly destination,

with a diverse, friendly and welcoming culture”. This could be because the BTA was one
of the first National Tourism Organisations (NTO) to target the gay and lesbian market
and develop a dedicated promotional campaign (see case study 1).

Case study 1 – BTA: Britain inside and out

BTA research shows that among gay and lesbian travellers Britain is a very
appealing destination because of its heritage and culture, as well as
shopping, dining and nightlife.

D The BTA has targeted the American market (Britain’s largest overseas
market) since 1998 and was the first tourist office to orchestrate a fully-
integrated marketing campaign aimed specifically at the American gay
and lesbian market. Gay and lesbian travellers have sophisticated tastes
and a strong interest in arts and culture, being equally drawn to the
traditional as well as modern appeal of Britian.

The ‘Britain inside and out’ campaign comprises direct mail and
advertising, both in key gay-specific print media and on-line, as well as
participation at consumer events in key gateways and substantial travel
trade activity. The BTA has a dedicated free phone information line and
have developed a dedicated gay website www.gaybritain.org. The
campaign has generated over 25,000 leads to date.
Table 2

However, not all tourism operators have been welcoming, with some hotels still
discriminating against homosexual couples. What is apparent, is that NTO’s cannot
promote destinations single handedly. To create an effective campaign there must be
industry cooperation, as illustrated by Quebec’s approach. Tourism Quebec worked
hard at gaining the support of the wider tourism industry and creating a gay-friendly
and supportive environment. They invited gay and gay-friendly tour operators to
participate in strategy sessions to develop new products and services for this market.
The resulting impact on the gay market was far greater than each operator attempting
to market independently.

At present, gay tourism to Britain is dominated by London. It is one of the top gay
destinations in Europe, attracting around 1.5m gay tourists each year. The London
Tourist Board (LTB) has launched a number of campaigns aimed at attracting gay and
lesbian visitors from overseas (see case study 2) which shows that gay visitors are
attracted to London for the same reasons as mainstream visitors (ie for its culture and
arts, theatre, nightlife, bars and restaurants).

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Case study 2 – London Tourist Board:

You don’t know the half of it
The LTB has launched campaigns aimed at the gay and lesbian markets, in
association with the BTA. As the UK’s market leader for gay travellers,
London is estimated to attract nearly one and a half million gay tourists
each year. The London Tourist Board estimates that over 10% of the total
tourism revenue to the city is generated by the pink pound, with the
overseas and domestic gay markets generating nearly £1b in revenue for
London in 1999. The major market is the United States, followed by near-
Europe, including France, Germany and Holland.

The LTB are targeting gay urban professionals and the campaign centres
on a 12-page booklet Britain, You don’t know the half of it, which is being
distributed at gay pride and film fairs and in response to enquiries. It
features gay-friendly locations throughout London and insider facts of
interest to this market. They have launched a gay section on the LTB web
site (‘Rainbow Capital’ with details of gay bars, clubs, cafes/restaurants,
shops, walking tours and events) and provide a recorded gay visitor
information line.
Table 3

Although gay tourism is still concentrated in London, it is starting to spread to

destinations such as Brighton, Birmingham, Manchester, Newcastle, Edinburgh and
Glasgow. Large cities with a vibrant gay nightlife may have high recognition within the
domestic market, but this is no guarantee of success in attracting the overseas market.
Destinations have to work hard at building awareness and marketing themselves. This
D
is done partly through linking in with the BTA campaign, but to create a more
significant impact destinations have to go the extra mile and develop their own
dedicated campaign (eg Manchester and Birmingham have produced gay guides as the
basis for their promotional campaigns).

The overseas market is considered a lucrative one and for most destinations it is the
focus of their marketing efforts, receiving the lion’s share of promotional spend.
Discussions with destinations running gay and lesbian campaigns suggest there are two
main reasons for this. Firstly, it is easier and more cost effective to link in with BTA’s
established campaign than to develop a new one from scratch (there is no domestic
equivalent of the BTA overseas campaign). Secondly, the domestic market has a high
level of awareness of the best gay hotspots in the UK and, as one operator commented,
“if the gay scene is good the domestic market will go there anyway, so it is better to
concentrate on raising awareness in the overseas market”.

Birmingham has one of the biggest gay scenes in Britain and provides a good example
of a destination that has concentrated on targeting the domestic gay market, as
highlighted in the following case study 3.

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Case study 3 – Birmingham: success in

attracting the gay market
Birmingham’s nightlife attracts gay visitors from towns as far afield as
Newport, Sheffield, Leicester and Wolverhampton. A survey conducted by
the Nightingale nightclub revealed that two thirds of the people who go
to their club come from outside the city.

Birmingham Pride and a range of other events have helped to establish

the city as one of the premier gay destinations. Birmingham Pride Carnival
has been in existence for four years and attendance has soared every year.
It now attracts around 55,000 people (including a large number from
outside the city) and 15-20,000 general spectators. The organisers have
worked closely with Birmingham Marketing Partnership (BMP) to promote
the event through familiarisation trips and press events. They have now
obtained ERDF funding to extend Birmingham Pride’s marketing activities
in order to attract more people from outside the area.

The tourism industry has benefited from the influx of gay visitors and the
hotel sector has been very supportive. Gay Pride organisers established an
accommodation booking hotline handled by BMP and several hotels
offered special discounts or undertook their own promotions and were
fully booked as a result.

Birmingham Pride has just produced a gay destination guide to the city in
conjunction with BMP, using European funding. The print run of 75,000
D will be distributed to gay venues and organisations around the country,
along with an associated advertising campaign.
Table 4

Events are also important for attracting domestic and overseas visitors. The success of
London’s Gay Pride (attracts around 90,000 people) has stimulated several destinations
to follow suit. Most gay events in the UK are connected with the arts, film and music,
although in the USA and Australia sports events (spectator and participant) are also an
important generator of gay tourism.

Future prospects
The future for the gay and lesbian holiday market looks rosy, with Mintel forecasting
continued growth in this market. Britain should be well placed to benefit; it has a
popular and valued tourism product (based on its heritage, art and culture) and the BTA
campaign has helped to consolidate Britain’s reputation as a gay-friendly destination.
At present, there are few specialist inbound operators serving this market and few
holiday packages on offer. There is scope here for operators who can provide high
quality and diverse holiday packages, particularly those who can serve niche markets
not currently catered for (eg the lesbian market or the over 55s). Gaining the
confidence of the gay community will be crucial to succeed in this market. Although
gay tourism is concentrated in London, other UK cities are gaining recognition amongst
the overseas market and this trend is likely to continue.

References
1 The Gay Market, Mintel Leisure Intelligence, 2000
2 The World Gay Travel Market, Travel and Tourism Intelligence, 2001
3 Community Marketing Inc., a San Francisco-based gay & lesbian travel consulting and
communications firm
4 Tourism Trendspotter, Volume 1, Issue 5, 1999

© English Tourism Council 2001