All-inclusive holidays have been enjoying a renaissance in recent years as travellers seek to control the costs of their trips abroad, but travel operator First Choice has made a bold move today by announcing that from 2012 all of its holidays will be all-inclusive.

First Choice was the 10th biggest travel agency online in March 2011, accounting for 2.4% of all visits to the Travel Agencies category. According to First Choice’s own statistics, all-inclusive holiday bookings on its website have increased from 2 in every 5 bookings a couple of years ago to 2 in every 3 now, which clearly shows an increased demand.

However, our own data shows that demand for all-inclusive holidays has actually decreased from last year. Total search volume for all searches relating to all-inclusive holidays in January 2011 was 10% lower than in January 2010, and year-on-year March searches are down by 31% for all-inclusive holidays.
This decrease in overall searches has had an effect on First Choice traffic. In January 2010 First Choice received 7% of all of its traffic from searches for all-inclusive holidays. A year later than number had fallen to 5.5%.

What this means is that First Choice is relying less on traffic from searches for all-inclusive holidays. Having said that, First Choice is clearly still a brand which is heavily associated with all-inclusive holidays. In the 12 weeks ending 2 April 2011 the word ‘inclusive’ was contained in 2.95% of all search terms driving traffic to the First Choice website.

However, the all-inclusive market is highly competitive, and despite that brand association First Choice is the fifth biggest recipient overall for all searches for all-inclusive search terms. First Choice also receives half of its traffic for all-inclusive searches through paid links, which whilst not as high as Thomas Cook and lowcostholidays.com is significantly higher than directline holidays and sister company Thomson.

The decision to move all First Choice holidays to the all-inclusive market will surely help to focus the company’s efforts and targeting online, the issue will be whether First Choice can capture enough of a declining all-inclusive market in order to make their new niche specialism worthwhile.
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