Destination Intelligence July 2010

The Bigger Picture

Tourism News
• The latest figures from the International Passenger Survey have been published, with visits measured at 29.9m (6.3% down compared to 2008). There were an estimated 229 million nights spent, which was 6.7% down. Interestingly, spend is up by 1.6% up (in nominal terms), at £16.6bn

• Holiday visits dropped 3% in the year-to-date as the slow economic recovery impacted on Holiday visits

• Visiting friends and relatives (VFR) continues to be affected significantly, down 9% in the year-to-date compared to the corresponding period of 2009

• After steep declines a year earlier, business visits have increased 5% so far this year, but remain at significantly lower levels than before the economic downturn hit

• Visits for other reasons (including short-term study, shopping, watching football and many other reasons) have fallen 8% in the year-to-date

• Outbound holiday visits were down 12%, business visits down 7%, VFR down 14%, and other visits down 5% in the year-to-date

• UK Residents spent 8% less on outbound travel in the year-to-date than a year before

Top Destinations by journey purpose
• Overall visits - the clearest insight is that London is vital to Britain’s inbound tourism economy, with an average of 15 million overseas visitors staying in the city annually, followed in second place by Edinburgh with 1.3 million staying visits each year. Manchester is firmly in third place with about 900,000 annual visits, followed by Birmingham and Glasgow, both of which attract well over half a million inbound visitors each year

• Holiday visits - For holiday visits London again dominates with Edinburgh in second place, joined in the top five by two other Scottish cities, namely Glasgow and Inverness. Liverpool makes up the quintet with an average of 162,000 staying inbound holiday visitors in each of the past four years

• Business visits - London is by far the top destination for inbound business visits, but both Birmingham and Manchester attract more than 300,000 such visits annually. Edinburgh is pushed down to fifth place behind the cohort of inbound business visitors, mainly lorry drivers, who reportedly spent ‘nights travelling’

• Study visits - Finally looking at the top five destinations for study visits there is some commonality with the earlier data in that London is easily the top destination, but among the destinations making up the remainder of the top five Edinburgh is the only city that has featured thus far. Oxford and Cambridge are level pegging with, on average, 28,000 staying inbound study visitor each year and Brighton and Hove comes in fifth spot, potentially reflecting the many language schools in the city

Who visits the North of England
• Ireland is the top market for Manchester, Liverpool and Newcastle

• Leeds attracts around 25,000 staying visits from each of its top five markets annually

• The USA generates more staying visits for York than any other market, with Australia representing the city’s second most important source market

To see how Chester compares with other heritage cities please click through to the full presentation

Attitudes and Perceptions of Generation Y:

Key markets and how the relate to Chester and Cheshire (SOURCE: VisitBritain)
• Generation Y (aged 18-30) is a key demographic within the industry, they been a driving force behind how consumers research, book and consume travel e.g. disintermediation of the travel agent

• Recent research undertaken by VisitBritain, looked at North American markets, NYC and Toronto. These represent two key international markets for Chester and Cheshire. Over the past two years, the US and Canadian market account for 26% of all international visitors to Chester (Visitrac, 09/10)

• Similarly, it was found that both markets share a passive approach to choosing a destination. Essentially, they do not actively choose at the time of booking, but instead subtlety absorb information through the media and word of mouth

• Generation Y respond to ‘small, surprising and digestible’ chunks of information rather than one narrow focus

• Both markets target the need, that the UK will cater for all that they want, they want more than the ‘tourist trail’ to really get underneath the skin of a place. And most importantly they demand high-quality at every touch point

• Historically, Canada and America have different relationships with the UK. These relationships have an affect on how they perceive the UK. For instance, research identified “the NYC market is driven to Britain more by its history and heritage. For Toronto, a greater focus on Britain’s modern culture is more appropriate”

• In terms of the NYC market Chester is certainly well positioned to exploit this market. Over the past 6 years the heritage and ‘old’ cultural offering stands out at as the most impressive aspects of the Chester, with 71% stating it was the ‘character of the city’ followed by the ‘architecture and buildings’ that they most enjoyed

• Although Chester and Cheshire has limited modern culture in comparison to Liverpool and Manchester, the close proximity to these modern culture hubs provides excellent potential to exploit an extended stay from this market. As demonstrated from the Visitrac findings. We must build on these strengths

Chester and Cheshire’s Hotel Performance (SOURCE: LynnJones Research, LJ Forecaster)

Chester
• There was fairly average performance in terms of occupancy level (69%) in June. When comparing the same period last year there was a (relative) 1.4% decrease in occupancy levels, with the figure being 2.8% down on the same time in 2008

• The average occupancy covering January to June 2010 is 67%, this is 4% points higher than the same period last year

• The average ARR for the month was £68.39 which was 1.3% more than 2009. In keeping with this increase, there was a rise in RevPAR, in the region of 0.8% compared to the same time last year

•  The ARR for the January to June is £66.85, 2% up compared to the same period last year

• Due to the high levels of demand over race meetings (91%), the ARR was held at an average of £98.20 over the meeting, contributing to a high £89.22 RevPAR

Forward Bookings
• The July forward bookings are at the same level (46%) as they were at the same time in 2009. This figure is down 4% from the same period in 2008

•  The pick-up rate for last month (June) was 21%%, as opposed to 25% over the same period last year. The 2010 actual occupancy was down 1% over the same period in 2009, but the pick-up was 3% higher

•  However, it is important to note that the negative effects of the economic climate in 2009 skews this year-on-year analysis. Therefore by comparing 2010 forward bookings to 2008 it is possible to gain a more balanced view. Throughout the rest of the year there had been a large gap between forward bookings between 2008-10, but this has reduced significantly are now the largest different is only 4% (September)

Cheshire
• The average occupancy level for Cheshire was 69%, which is 1.4% down on the same time last year. This figure is also 2.8% down on the same period in 2008. Year to date (covering Jan-June) the average occupancy was 66.8%, 3.6% points above the same time last year

•  Similarly, the ARR for Cheshire year-to-date (Jan-June) was £66.28, a 1% increase compared to the same period last year

The Wider Context
•  Latest TRI Hospitality Consulting results show that chain hotel occupancy during May stood at 83.1% in London, up from 81.2% a year before, while in the regions occupancy of 72.6% was up on the 69.8% recorded a year ago

•  According to PKF Room rates in London are £10 higher than a year ago while, on average, unchanged in the provinces

This months special edition looks at the role of business events in the Australian market, it looks at best-practice trends, motives and makes key recommendations that can be applied within our Visitor Economy

To read about it please click through to the full presentation