As the European economy begins to show signs of life, a growing share of consumers in the region is feeling confident enough to indulge in a much-needed vacation. France and Germany are paving the way to recovery – posting second quarter economic growth – and financial forecasts in the U.K. have suddenly turned bullish. There are other positive indicators, including a rise in manufacturing activity and improving employment figures. And while a lingering debt crisis and prolonged uncertainty in Spain, Italy and Greece are sobering reminders that Europe is not out of the woods just yet, the region’s consumers are more optimistic knowing the worst is behind them.
According to a new PhoCusWright report, a leisure travel recovery is underway in France, Germany and the U.K. Leisure travel incidence in 2013 increased for all three markets, and improved economic conditions are sparking a boost in vacation spending. “Millions of European consumers have returned to the traveler pool, and while Europe may not be out of the woods yet, consumers are beginning to feel that the worst is behind them,” says Marcello Gasdia, author and research analyst of PhoCusWright’s European Consumer Travel Report Fourth Edition. “Given the high priority Europeans generally place on travel, the travel industry is among the first to benefit from the boost in morale.”
Consumer Confidence Fuels Travel
When choosing how to spend their discretionary income, consumers in France, Germany and the U.K. prioritize vacations over a wide array of recreational goods and services, including dining and nightlife, entertainment and sports, fashion, and electronics.
And European travelers are putting their euros where their priorities are. Travel incidence, or the share of adults who took at least one vacation over the past twelve months, jumped four percentage points in France (70%) and Germany (72%) in 2013. In the U.K., where leisure travel incidence is the highest of the three markets, the share increased three points to 78%. In each of these markets, incidence of leisure travel has hit a three-year high.
Germany Leads the Way
Germany is leading the travel market recovery – and not simply by virtue of its larger traveler pool. While consumers in Germany took as many trips in 2013 as compared to 2012, they took longer vacations and spent an average of €206 more on vacations in 2013. Germans also tend to travel further from home and also showed higher consumption rates across the three major travel components of lodging (89%), air (61%) and rail (38%).
U.K. Travelers Stay Longer, Spend More
But the U.K. is not far behind. While travelers in the U.K. took slightly fewer trips, they took longer ones. And when compared to 2012, the average trip for U.K. travelers lasted a few more nights, was slightly more expensive, and was further from home.
France Still Recovering
France lags the other two markets. Annual household leisure travel spend dropped slightly year-over-year, and travel frequency dropped significantly – from 3.6 in 2012 to 3.2 in 2013. Both lodging and air travel incidence are among the lowest of the three markets.
As increased confidence drives more travelers to the marketplace, businesses that are tuned into travelers’ shifting attitudes and evolving behavior will be most successful in the brighter years ahead. Understanding the rapidly changing behaviors and preferences among travelers in France, Germany, and the U.K. will enable businesses to target and refine their offerings to travelers’ needs and preferences.
Source: World Travel Market London