How to take a break (not break the bank...)

You've booked your summer holiday, you've paid for your accommodation and flights. But have you factored in all the extra costs?
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The Independent Travel

We're all going on a summer holiday, but we had better remember to take plenty of spare change. According to latest industry figures, (CAA/Atol September 1992-1993) the average holiday now costs £463 per person, up from £415 in 1998.

We're all going on a summer holiday, but we had better remember to take plenty of spare change. According to latest industry figures, (CAA/Atol September 1992-1993) the average holiday now costs £463 per person, up from £415 in 1998.

The true cost of a summer break, however, is more than double that, once all the extras have been taken into account. Consumer expenditure on holiday goods and services has risen in direct proportion to the growth of the holiday market. Spending on domestic holidays grew by 15 per cent from £15.6bn in 1997 to an estimated £18bn in 2002. In the same period, spending on foreign holidays grew by 59 per cent from £11.1bn.

Frances Tuke, of the Association of British Travel Agents, says that UK holidaymakers can now expect to spend an average of £465 on extras over and above travel and accommodation. In other words, your holiday is going to set you back £928. Extras can mean anything from water skiing lessons, tennis coaching, and a new bikini to a round of cocktails, she explains. In fact, by far the biggest chunk of cash is spent on wining and dining at 18 per cent of the total holiday cost, according to a 2002 Mintel consumer report. Ten per cent is spent on shopping, and around 7 per cent goes on day-trip excursions and evening entertainment.

This balance does not appear to be affected if consumers upgrade to more expensive package holidays, to better accommodation, or to more expensive travel, like hiring cars or choosing convenient flying times.

People who holiday in the UK are likely to spend even more of their entire budget on add-ons. Figures for 2002 show that domestic holidaymakers splash out 26 per cent of their holiday spend on food and drink, and 15 per cent on shopping. Richard Perks, director of retail research at Mintel says a much higher level of spending can be devoted to entertainment, shopping or simply eating and drinking if the travel element is reduced.

So why the increase in expenditure? Rising stress levels mean more people now feel they owe themselves a treat. According to the DTI, UK workers now work the longest hours in Europe. In a survey conducted for Mintel's Healthy Lifestyles or Putting on the Pounds - UK, Special Report, in April 2003, some 20 per cent of respondents agreed that they definitely found their life quite hectic and a further 28 per cent tended to agree that is was stressful.

Spending on holidays is also closely connected to high consumer confidence. Employment levels in the UK have increased by 3.4 per cent between 1998 and 2003.

People are also choosing to go on holidays which involve relatively more expense. Beach holidays, with few extras, beyond sunscreen, a bikini and a good book, are losing their appeal. The market has declined from 44.1 per cent of all holidays taken in 1998 to 40.5 per cent in 2003.

In the meantime, the city break market has increased by some 4 per cent, encouraged by the increasing number of low-cost airline routes together with work pressures hindering holidaymakers from taking too much time off at one time.

Speciality holidays like golfing trips and luxury cruising, are gaining in popularity. Global cruise capacity is set to increase by 9 per cent in 2004 and the UK represents the largest market in Europe and, globally, is second to the US. The UK's cruise industry grew by 6.2 per cent between 2001 and 2002 to almost 9.5 million passengers. The Passenger Shipping Association (PSA) is predicting annual increases of around 10 per cent.

The average cost of a cruise is now £1,052 and a typical customer can easily spend the same again on outfits for formal dinners, on-board gambling and excursions. People tend to spend more on gambling on the big American ships like Celebrity, says William Gibbons, director of the PSA. Shopping malls are also an integral part of any new cruise ship. We recognise that shopping is a leisure activity which people enjoy, says Gibbons. Certainly, there are plenty of opportunities for people to spend money both at sea and on shore.

All cruise liners lay on excursions for passengers, which cost extra, usually between £30 and £40. Nine out of ten passengers take an organised trip. On most cruise lines drinks are extra and many ships add an automatic 15 per cent service charge to bar bills. Tips for staff can add £25 to £60, per passenger, for a week-long cruise.

Exotic destinations are also becoming more popular. Safaris are gradually becoming more mainstream and now represent 0.4 per cent of all holidays. Travel clinics are doing excellent business as travellers need tetanus and polio jabs. BA travel clinics charge £49 for a Hepatitis A jab and £26 for a typhoid injection.

Pre-holiday shopping is probably one of the biggest factors in helping to bump up the true cost of a summer break. Mintel has estimated the size of pre-holiday spending is some £2.7bn per year and four out of every five holidaymakers claim to have bought goods specifically for their trip. The survey found many consumers regard pre-holiday shopping as part of the fun of the holiday . Even last minute shopping in the airport contributes to the overall feel-good factor, says Richard Perks. Men are more likely to buy last minute, as women seem to prefer to shop in places that they know well.

The weaker pound could be helping to boost pre-holiday spending as the pound is losing some of its value against foreign currencies. "Although this could have a direct effect on the holiday market, it could also have the influence of boosting pre-holiday spend. Fewer consumers may wait until they are at their destination abroad before buying goods for their holidays," says Mr Perks.

Consumables, including toiletries,and sun care products, are considered a pre- holiday essential by many holidaymakers. Clothing is also a popular item. The research examined attitudes to the purchasing of holiday goods. The most popular attitude was "I usually buy some new clothing prior to going away on holiday" and this is relevant to 41 per cent of all holidaymakers.

Fast-changing fashion trends can encourage last-minute holiday spending too. Although many clothing items are a holiday staple, the actual styles will vary. In today's changing fashion marketplace consumers are significantly more likely to replace goods in order to keep up with the latest looks. Consumers who are more fashion conscious will replace their clothes more often and fashion and design also encourage many consumers to trade up, says Mr Perks. Consumers typically wear items, bought at low prices, for a short period of time on holiday and then discard them.

Concern over skin protection is also boosting sales of hats and sunglasses. Consumers like to take photographs of their holidays and so film is a "pre-holiday essential" for many. A pending holiday can also help to stimulate sales of cameras.

Beauty treatments such as waxings, manicure and hair cuts are essentials for many women before they head to the airport. And don't forget to leave just enough time to arrange for an overdraft.

Foreign and Commonwealth Office Travel Advice The Foreign and Commonwealth Office website www.fco.gov.uk/knowbeforeyougo includes travel safety advice and destination information
020 7008 0232/0233

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