Will the drive for domestic holidays continue?

Despite the perception that Brits prefer holidays abroad, ‘staycations’ have always been a popular choice for UK holidaymakers; in 2019 there were over 120 million domestic overnight stays in Britain compared with 93 million international stays. Moreover, as 7.4 million Brits planned a UK trip over the Easter weekend, the love for domestic trips remains apparent. Britain’s areas of outstanding natural beauty – from the Scottish Highlands down to the Jurassic Coast and multiple national parks in between – provide an appealing destination for the family summer holiday.

There was a rebound in domestic overnight stays in 2021 following the covid travel restrictions of 2020, as shown in Figure 1. The greatest demand was found in provincial locations where rural settings allowed holidaymakers to socially distance and escape the dense areas of cities: the percentage of domestic visitors to rural destinations compared to cities rose from 51% in 2019 to 59% in 2021. Indeed, alongside the quantity of domestic trips, operators also recorded strong performances as hotels in locations such as Brighton (US$43), Exeter (US$42) and York (US$39) recorded higher gross operating profit per available room (GOPPAR) than London (US$23). 

Figure 1: Domestic Overnight Stays in all Accommodation Types

Source: CBRE Research

As Figure 1 shows, international travel failed to rebound to the same extent. Since the onset of the Covid-19 pandemic, the percentage of holidaymakers choosing a domestic holiday has been more stable than those choosing to holiday abroad. A Mintel survey of 2,000 participants found that 50% had taken an overseas holiday in 2019, and 62% a domestic holiday. Skip to 2021, and a much lower 15% had taken an overseas holiday, but a consistent 63% had had a domestic holiday.

While a pick-up in international travel is expected, remaining restrictions for those unvaccinated in countries such as Spain, the US and Thailand may deter some holidaymakers. Moreover, the cost-of-living squeeze may convince households to stick with their staycation this year. Operators of hotels, hospitality and holiday park destinations, should be optimistic of visitor numbers ahead of the UK summer.

Therefore, even though pent-up demand for international travel is likely to see international holidays rebound, confidence in the domestic tourism market should remain high. Popularity among caravan parks should remain; Mintel’s survey of participants who had been on a camping holiday over the last three years, found that 80% plan to go on camping holidays for at least the same number of times as they did before the Covid-19 pandemic began. As for hotels, the reassuring key performance indicators in provincial locations, as shown in Figure 2, should encourage operators to expect a reliable revenue stream over the coming summer. Meanwhile in the holiday park market, Landal GreenParks’ intention to open nine new UK resorts this year suggests confidence remains strong.

Figure 2: Provincial UK Hotel Performance

Source: CBRE Research

As our forecast in Figure 1 indicates, domestic overnight stays are expected to return to 2019 levels in 2022. Therefore, as we head towards the UK summer, domestic travel destinations should anticipate stable visitor numbers. Pre-Covid-19, in 2019, domestic expenditure on overnight accommodation totalled £8.9bn according to the ONS. If domestic visitor numbers return to pre-pandemic levels in time for the UK summer, then, coupled with strong Average Daily Rate and GOPPAR performance in provincial locations, hotels, holiday parks and caravan parks should all expect to benefit from a reliable wave of domestic visitors in 2022.