Package holidays 'back in vogue'

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Package holidays, once considered unfashionable and in terminal decline, are “back in vogue” and reclaiming market share from the independent travel market.

Data from the Office for National Statistics shows the traditional package holiday has been making a steady come-back since 2008 as British households turn to all-inclusive holidays as way of sticking to tight budgets.

In 2008, package holidays accounted for just 37pc of the overall market for travel abroad as younger generations in particular preferred to explore the world independently.

Now (Other OTC: NWPN - news) , holidays offered by travel giants such as TUI (Xetra: TUAG00 - news) , owner of First Choice and Thomson, and Thomas Cook (Xetra: A0MR3W - news) account for more than two-fifths of the market.

Peter Long, chief executive of TUI Travel (LSE: TT.L - news) , says in an interview today that package holidays have “evolved”.

All inclusive hotels can no longer be described as having “canteen-type atmospheres”, he argues, while many Britons enjoy the certainty during these tough economic times that they can stick to their budgets and will be looked after if anything goes wrong.

“When you look at our typical customers who take a package with us once a year, maybe every other year, they are not seasoned travellers, they are hard-working people who want a break in the sunshine,” he said.

“They want peace of mind and not be screaming at each other when something has gone wrong.”

According to a recent note from Morgan Stanley (Xetra: 885836 - news) , package holiday volumes grew 5pc between 2010 and 2012.

“After many years of volume drops, the package holiday appears to be back in vogue,” the note said.