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2012 Trends - APD hikes strike hammer blow for overseas trips

2012 Trends - APD hikes strike hammer blow for overseas trips

New research from Blue Chip Holidays has revealed that holiday habits are set to significantly shift towards British breaks in 2012.  Its findings show that concerns about the cost of holidaying abroad, combined with the impact of next April’s Air Passenger Duty (APD) hikes, are set to deal a hammer blow to overseas holidays and bring a boom in the popularity of domestic breaks.

According to its survey of over 2,900 people in November/December more people intend to holiday in the UK in 2012 than 2011; 44 per cent of those polled said that they planned to increase the number of domestic holidays in 2012.  However, when they were asked how they would react to the planned APD hikes at twice the rate of inflation from April, the numbers of those saying they would be more likely holiday in the UK rather than overseas leapt to 67 per cent.  Just 1/3 said it would make no difference to their holidaying habits.

The swing towards domestic breaks appears to be swayed by the continuing poor performance of the pound against foreign currencies, and the perception that overseas holidays are becoming increasingly unaffordable.  53% of those polled said the weakness of Sterling dissuaded them from holidaying abroad while 64% said that they have chosen, or would choose a UK self-catering holiday over an overseas trip to save money.

Commenting on the findings Alan Taylor, Managing Director of Blue Chip Holidays, which has over 800 high-end holiday homes in the UK said, “The impact of a hike in APD cannot be underestimated.  In these financially challenging times the travelling public are looking for value for money.  Confronted with the prospect of hundreds of pounds being added to the cost of their overseas holiday overnight, you can bet that travellers will very quickly look for better value deals and for many that will mean holidaying here in the UK.

“The good news for the domestic holiday home sector is that customers who choose not to holiday overseas intend to spend the money they save in the UK; 26 per cent of those polled in our survey said they’d upgrade their accommodation to somewhere really special.  A further 30 per cent said they’d choose to treat themselves on their holiday in the UK.  On top of that 35 per cent said they’d use any money saved to take an additional domestic break in the UK.”


Taylor added: “In the last year alone we’ve seen our bookings rise by 30 per cent on 2010.  This has been caused in part by extreme weather conditions overseas, air strikes, poor exchange rates, increased air fares and APD tax increases, however it has also been because customers put off by the rising cost of trips abroad are upgrading to really special and memorable places in the UK; they are not willing to lose out on quality in any way.  This is great news for the high-end holiday home market and we expect demand for 4 and 5-star properties to rise significantly over the next year.”

APD, the facts:

Under the proposed APD increase a family of four flying to Australia could pay in excess of £700* in APD alone. This would be enough for a family of four to pay for a week in July** in over of 250 Blue Chip Holidays’ properties.  Even a short-haul flight to Spain could see a family of four paying up to £128 in tax and that’s before they’ve paid for the cost of their villa.

Although George Osborne made no mention of APD in his Autumn Statement to the House of Commons the Treasury has confirmed that the double-inflation increase will go ahead.  This was confirmed on 06 December when the Government rejected all proposed changes to the way the tax is calculated.

Since 2007, APD for flights to Europe has increased by 140 per cent, and by up to 325 per cent for long haul routes.  Over the same time air passenger flying from the UK have fallen by 22 per cent*** while bookings with Blue Chip Holidays have risen by 220 per cent.