Marloes de Vries
Marloes researches and and writes Mintel's UK travel reports.

With the UK government updating the green, amber and red list for the second time, from the 30th June, 16 destinations and UK Overseas Territories will be added to the green list. All additions to the green list, with the exception of Malta, will also join the ‘green watchlist’, which indicates that these destinations are at risk of moving from green to amber. Israel, which had already been on the initial green list, has been added to the ‘green watchlist’ too, while six countries (Dominican Republic, Eritrea, Haiti, Mongolia, Tunisia and Uganda) will be included in the red list from 30 June. So what does this all mean for the travel industry in the short to long-term? 

High levels of uncertainty remain, despite green list expansion

Although the additions to the green list will trigger the release of some pent-up demand, more mainstream destinations will need to be added to the green list and stay there to start rebuilding Brits’ confidence in international travel. Currently, Malta is the only top 20 most visited holiday destination by Brits* on the green list, while the expanded green watchlist adds to the uncertainty, especially after the removal of Portugal in early June. 

 Of the top 20 most visited destinations by Brits*, only Malta is on the green list

Source: Unsplash / Mariana Proença

On top of that, travellers will have to comply with entry requirements of their holiday destination. This makes planning and booking holidays more complex, especially as an increasing number of countries are tightening border restrictions due to the surge of COVID-19 cases in the UK. As an example, Malta will only allow fully vaccinated Brits to enter from 30 June 2021.

Premiumisation remains key opportunity

The recovery of international travel in the short term will be led by younger consumers, while brands will also have an opportunity to increase the value of summer holidays. Those who plan to spend their main holiday overseas show a willingness to splash out on these trips by upgrading elements of their holiday to make it more memorable. Brands can entice travellers to book premium or luxury accommodation, opt for longer stays and add on experiences. In response, small group tour travel company Intrepid introduced Intrepid Premium for higher-end adventures with departure dates from 2022. Itineraries include private or first-class local transport, four-star accommodation options and more activities and meals.

Shift to late-summer and winter (sun) destinations

At the same time that the update of the green, amber and red list was announced on 24 June, the government confirmed it is working on plans that will see fully vaccinated UK residents become exempt from quarantine requirements when returning from amber list countries from later in the summer. This announcement is likely to have boosted confidence in travelling overseas later in the year.

The older generation, who is most confident about their financial situation in the year ahead, should be an interesting target market for winter (sun) destinations if uncertainty has subsided. Over a fifth of travellers aged 55+ agree they would like to spend more of the winter abroad as they get older. 

Reassurance and simplicity remain essential to encourage bookings

Initiatives that reassure travellers remain essential amid COVID-19 uncertainty. Over two-fifths of those planning to take an overseas holiday in the 12 months following March 2021 say they will prioritise a flexible cancellation policy when choosing which company to book the next holiday with, while over a third will prioritise flexible rebooking policies. TUI, for example, added the River Cruises Satisfaction Promise on bookings for sailings departing before 25 October 2021. For those who are unsatisfied with their trip, a refund can be requested if the issue(s) experienced could not be solved during the cruise.

Meanwhile, integrating COVID-19 measures into search filters can help to simplify the holiday planning and booking process. More than half of travellers say they would like to have the option to exclude holiday destinations from search results on a travel company’s website based on their entry requirements. The most wanted feature is being able to filter out destinations that require self-isolation upon arrival or return. 

Demand to take main holiday in UK exceeds pre-COVID-19 levels

The domestic holiday market has benefited from the cautious approach of the UK government to the restart of international travel. The share of Brits planning to take their main holiday in the UK now exceeds pre-COVID-19 levels, while the initial enthusiasm about travelling overseas has subsided. As such, Mintel expects it to be a record summer for staycations. 

Rural and coastal destinations will benefit most from the higher demand for staycations, while there are opportunities to develop more self-drive itineraries as more Brits are looking to discover what’s on their own doorstep. Various companies have tapped into unprecedented demand for rural breaks, with Yonder launching its UK collection of nature accommodation and experiences (eg stays on farms, vineyards) in May 2021. Meanwhile, Airbnb added a category of “one-of-a-kind” stays in nature, such as bubble tents and working ranches, as part of its wider upgrade to the user experience on its platform. 

Coastal destinations like Cornwall will benefit most from the demand for staycations

Source: Unsplash / Charisse Kenion

The long-term outlook for overseas travel remains positive

Even when the outbreak is over, travellers plan to holiday more frequently in the UK. Confidence in international travel has taken a big hit and it will take time for it to fully recover. However, warmer weather and discovering new places and other cultures remain important reasons to travel abroad. As such, overseas destinations will again be a big draw once travelling is deemed safe and convenient again. 

* based on 2019 data from the IPS by the ONS

More information can be found in our COVID-19 and Travel: A Year On – UK – 2021 Report.