A major consumer survey finds UK demand for holidays undimmed by spending pressures. Ian Taylor reports
UK consumers’ confidence to book overseas holidays is at its highest for three years despite falling confidence in the economy.
That is the conclusion of First Rate Exchange Services’ annual Holiday Confidence Index (HCI) based on a survey of 5,000-plus consumers in September.
The index shows a two-point rise on a year ago as an increased proportion of Britons plan to travel abroad in the next 12 months despite a 14-point fall year on year to 19% in the proportion expecting the UK economy to grow.
The confidence index is a composite of six indices which reflect consumers’ intentions to travel, the planned frequency and duration of holidays, and spending on bookings and in resort.
More than half (54%) of respondents declared their intention to take a holiday abroad in the next 12 months and close to another one in five (18%) had yet to decide, leading to a five-point rise year on year in First Rate’s Holiday Intention Index.
The survey found 44% of those intending to travel have already booked a holiday and led First Rate to conclude there is “an upturn in Britons planning trips abroad” and “growing resilience in the overseas holiday market”.
It also found “demand for the eurozone growing”.
However, First Rate noted “some evidence that holidaymakers are cutting the frequency and length of holidays . . . [amid] plummeting confidence in the UK economy”.
The survey found Europe remains “by far the most popular destination” despite the strength of the euro against the pound, with almost three-quarters (73%) of UK holidaymakers planning to travel to Europe. By contrast, First Rate noted demand for North America has dropped “significantly”.
First Rate reported some evidence that holidaymakers “are ready to tighten their belts” by cutting the frequency of holidays and length of stays abroad, with a one-point fall in both the Holiday Frequency Index (which measures how often people expect to travel) and Holiday Duration Index (which measures how long they intend to go away).
It found a three-point rise to 30% in holidaymakers intending to take breaks of up to six nights, surpassing the proportion planning sevennight holidays (27%) and meaning almost three in five plan holidays of a week or less.
First Rate’s Cost of Booking Index remained flat, suggesting that consumers intend spending no more on holidays than a year ago – despite holiday prices rising this year and increases forecast for 2018. The Travel Money Index was also flat, reflecting holidaymakers’ intention to take no more money away with them next year.
The survey also found more than a third (36%) whose plans could change if living costs rise.
First Rate Exchange Services head of insight Liam Hodge said: “Doubts about personal finances are bound to make people more cautious about what they spend, but the Holiday Confidence Index underlines the importance of overseas travel.”
*The Holiday Confidence Index is based on a survey of 5,293 UK consumers in September. It is produced with the support of YouGov and the Institute of Travel and Tourism and is available by email: HolidayConfidenceIndex@firstrate.co.uk
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