United Kingdom

Market Overview

    Yr/Yr % Chg
Visitors to California (2014) * 686,000 5.3%
Visitor Spending (2014) ** $905 million 4.4%
California Market Share (2014) 17.3% -
Average Length of Stay - nights (2013) 10.4 -
     
Weekly Non-Stop Flights (2015) 102 17.3%
Weekly Non-Stop Seats (2015) 33,085 16.0%
2015 Visitation Forecast (% change vs. 2014) 718,000 5.1%
2018 Visitation Forecast (% change vs. 2014) 788,000 15.4%

Source: Office of Travel and Tourism Industries, CIC Research, Tourism Economics, OAG

* Visitor volumes: The U.S. Department of Commerce started to count one-night visitors in 2014. This change inflated Yr/Yr visitation gains compared to previous years but delivers a more accurate picture of total visitation.

** Visitor spending: The U.S. Bureau of Economic Analysis made changes to their methodology in 2014 to include spending by students, temporary workers, and people traveling for reasons related to their health. Although this change increased total travelers, some Yr/Yr declines in spending per visitor have been seen which are more likely related to the gaining strength of the US dollar vs. foreign currencies in the 4th quarter of 2014.

Visitor Spending by Category 2013

  % spending $ Category Spending
Accommodations 36.3% $315 million
Entertainment/Recreation 14.2% $123 million
Food & Beverage 24.5% $212 million
Ground Transportation 6.2% $54 million
Shopping 14.3% $124 million
U.S. Air Transportation 3.0% $26 million
Other 1.5% $13 million
Total 100% $867 million

Source: U.S. Dept. of Commerce; CIC Research, Inc.; U.S. BEA; Tourism Economics

Background

International Markets

The United Kingdom is one of California’s leading and most mature international markets. The high annual spend of $905 million by 686,000 visitors in 2014, with an average of $1,319 per trip, places the U.K. in the Tier 1 category of marketing investment. Visit California has had a presence in the market since 2003, with a sophisticated consumer-advertising layer introduced in 2008 that generates an average of $227.5 million in incremental visitor spending yearly. U.K. visitors stayed an average of 10.4 days in California in 2013. The continued strength of British economy and maturity of the market correlates to a high rate of repeat visitation presenting both opportunities and challenges for California’s tourism industry – the U.K. consumer is hungry for new and different California experiences.


Economy
 

The U.K. is the fastest growing economy in the developed world. With house prices increasing by 20% in many regions, the overall confidence index is at its highest level since 2008 and unemployment has been falling at its fastest rate since records began. The U.K. continues to prosper economically and the outlook for 2015 is healthy with the exception of some temporary uncertainty tied to the general election on May 7, 2015.

Over the last six months, the U.S. dollar exchange rate has continued to fluctuate against the GB pound. It peaked in 2014 to 1.7 but has since returned to levels around 1.5. The fluctuation is within the usual parameters of activity and is not expected to impact travel unless it remains above 1.7 or below 1.5 for a sustained period of time.

Radical changes in the pensions market and the way in which they can be drawn down fully – as opposed to the previous maximum of 25% – have a direct impact on the travel industry. Reports indicate that 12% of new pensioners will spend unlimited pension withdrawals on a holiday, leading the long-haul market for over-55-year-olds to predict a mini boom in bookings from spring 2015. For example, Titan Travel, the leader in escorted touring and over-55 travel, reported that a portion of their advertising funds typically reserved for the busy January/February booking months will be held back for spring to capitalize on the new pension policy with the expectation of seeing their spring sales flourish. 

 

Nonstop Airservice into California

    Avg Weekly Flights Avg Weekly Seats  
Airport  Airline 102 32,995 Cities Served
LAX Norwegian Air Shuttle  3 748 London
  American 12 3,811 London
  British Airways  14 6,152 London
  Delta  7 1,424 London
  Air New Zealand Limited 7 2,324 London
  United  7 1,816 London
  Virgin Atlantic Airways 11 3,217 London
SAN British Airways  7 1,914 London
SFO British Airways  14 4,938 London
  United  11 3,249 London
  Virgin Atlantic Airways 10 3,402 London

 


Airlift
 

With the prospect of a sustained term of low oil prices, airfares are predicted to stabilize or fall, especially for long-haul competitive markets such as California. New air capacity confirmed for the California gateways in 2015 – including flights on Virgin Atlantic, British Airways, Ethiopian Airways and Norwegian Air – will add an additional 22% peak season daily seats to LAX and SFO, accounting for the largest increase in U.K. capacity to California in more than a decade.

Over the next two years, the British government has agreed to abolish the controversial Air Passenger Duty (APD) tax, which will save an average family travelling to California more than $400 travelling and reduce the cost of flights for children younger than 16 years old.


Travel Trends
 

Expected travel trends for 2015 in the U.K. include:

  • Growth in luxury travel with increased demand for five-star accommodations.
  • Rising popularity of adult-only breaks that take advantage of off-peak travel periods.
  • The return of the city break, with UK travelers expected to take an average of 4.7 trips in 2015.
  • An increase in ‘challenge’ and activity trips fuelled by a desire to explore the Great Outdoors.
  • The desire to visit unknown destinations and to meet new people will spotlight the emergence of peer-to-peer dining.
  • An expected boom in older travelers taking a long-haul trips of a lifetime after cashing in their pensions. A poll by Ipsos Mori found 21% plan to use pension money to fund a holiday. California’s key competition for the pension travel audience includes long-haul, once-in-a-lifetime destinations such as Australia, South Africa (safari), Canada, South East Asia (Thailand/Vietnam), Alaska and India. As of yet there has been no obvious activity from these competing destinations, but campaigns are expected to materialize in early spring 2015.

 

Market Strategies

2014/2015 
 

  • Visit California has continued to layer TV, digital and out-of-home campaigns and communications to increase visitation and focus beyond the gateways. Underpinning this is an “always on” digital plan to drive traffic through to visitcalifornia.co.uk.
  • The key programming focus is on the seventh annual SuperFAM and the European Sales & Media Mission. Key strategies for trade outreach is continued agent training – in-person, via the online training program and familiarization trips – fostering trade relationships, gathering industry intelligence, developing product and maintaining a strong market presence.
  • Ongoing public relations activities include media pitching, securing an average of 75 press visits per year, hosting media events and producing multi-day PR missions to connect industry partners with top media influencers

 

2015/2016
 

  • The paid media budget will double, allowing for heavier exposure in the two primary trip-planning seasons: fall (for winter travel) and spring (for summer travel). Television buys will expand to run in September and October. Out-of-home programs will extend to reach markets outside of London – such as Birmingham and Manchester – and venues such as underground and street panels, street transit and billboards, along with more digital executions.
  • Digital impressions will significantly increase and be planned consistently throughout the year, with heavier weight levels to align with key planning and promotional periods.
  • Given the target audience’s preponderance for news and information, greater investment in content-oriented news partnership programs will be developed – such as The Guardian initiative executed in 2014.
  • Social media activity will encourage additional acquisition and engagement, and mobile programming will to capitalize on the target’s propensity for heavy mobile usage, especially during commute windows.

 

2015/2016 Plan Highlights
 

Consumer, trade and PR plan highlights in the expanded budget environment will include:

  • A continued layering of TV, digital and out-of-home channels and communications to further boost visitation numbers and ensure the focus is beyond the gateways and throughout the state. 
  • Undertake additional trade partnerships, develop targeted co-op campaigns and leverage relevant Visit California brand campaigns through trade partners. 
  • Host a Club California-style live training in key locations across the country to complement expanded consumer advertising beyond London.
  • Increase high-profile media visits with a focus on securing higher levels of targeted broadcast coverage.
  • Build on the digital influencer program and develop wider scope multi-channel media content partnerships. 
  • Bring a taste of California to the United Kingdom and generate media and social buzz through PR stunts.

Familiarity & Interest of California Areas

  Like to Visit Like to Learn More About It I'm Not Interested
San Francisco Bay Area 73% 22% 9%
Deserts 49% 38% 17%
San Diego County 47% 34% 22%
Los Angeles County 46% 35% 23%
Central Coast 46% 43% 14%
North Coast 42% 45% 15%
High Sierra 40% 48% 15%
Orange County 37% 41% 26%
Central Valley 31% 50% 21%
Gold Country 30% 54% 19%
Shasta Cascade 20% 54% 28%
Inland Empire 17% 51% 33%

Source: Hall & Partners, August 2012

Top 10 Motivating California Features

San Francisco 51%
Yosemite/Half Dome 39%
Napa Valley/Wineries 33%
Golden Gate Bridge 28%
Highway 1/California Coastline 26%
Death Valley/Deserts 26%
Beaches 25%
California Redwoods 23%
Los Angeles 22%
Hollywood 21%

Source: Hall & Partners, August 2012

Contacts

Guy Chambers
Managing Director
guy@blackdiamond.co.uk
Jonah Whitaker
Account Director
jonah@blackdiamond.co.uk
Arabella Campbell
Senior Account Manager/Content Lead
arabella@blackdiamond.co.uk
Andrea Sims
Travel Trade Manager
andrea.sims@visitcalifornia.co.uk
James Mead
Travel Trade Manager
james.mead@visitcalifornia.co.uk
Joanna Cooke
Trade Marketing Director
joanna.cooke@visitcalifornia.co.uk
Emma Westman
Public Relations Account Manager
emma@blackdiamond.co.uk
Black Diamond
Phone: 011 44 207 257 6180
Fax: 011 44 207 240 3589
www.visitcalifornia.co.uk

 

Thank you to our Golden State Sponsors:
MeringCarson Time Inc