Ian Taylor reports on the annual Holiday Confidence Index
The number of UK adults planning an overseas holiday in the next 12 months has increased on a year ago, according to research for First Rate’s annual Holiday Confidence Index published today.
But the study suggests many consumers intend to spend no more or even less if they can than this year.
The index is a composite of six sub-indices produced from an online survey of 5,000-plus UK adults carried out in September.
The most important of these, the Holiday Intention Index, is up two points to its highest score in more than four years.
The overall Confidence Index is unchanged on a year ago, “matching 2017’s three-year high”, according to First Rate. The index has been published for five years.
First Rate notes this indicates “a resilience that might have been expected to erode in the face of volatile exchange rates and uncertainty about Brexit”.
But the three indices on spending – the Cost of Booking Index, the Travel Money Index and the Destination Spend index – have fallen, the former by two points year on year and the others by one point each.
Liam Hodge, First Rate Exchange Services head of insight, hailed the results of the latest Holiday Confidence Index as “good reason for the travel industry to feel optimistic”.
Hodge said: “People still want to take a holiday abroad. They intend to cut costs – either the cost of the holiday itself or the amount of money they take. [But] with Brexit coming, I would have thought people would be more negative.”
He noted variations in intention by age, saying: “The 55-plus population show a willingness to spend more – 18-24-year-olds are more stretched, they intend to go on holiday [but] this is the group struggling most to pay for it.”
Hodge described a finding that consumers plan no reduction in the length of holidays as “a surprise”.
But he said: “People are saying what they would like to do. When they come to book they might not be willing to spend that much. We will probably see duration decrease slightly.”
He added: “People are moving to package holidays, trying to get a good deal.
“They say the exchange rate has not deterred them from travelling. They have just accepted the rate is not as good as it was.”
Just 13% of respondents said the exchange rate of sterling had affected their holiday decision, whereas 20% of 18-24s said it had.
The survey found: “Three in five (60%) of 18-24-year-olds intend to travel abroad in the coming year.”
However, First Rate noted the views of 18-24-year-olds “are polarised. They are more likely to take fewer holidays abroad (12%) but also most likely to take more trips (13%).”
One in seven (14%) of 18-24-year-olds who intend to take an overseas holiday said they would spend less on booking the trip, compared with just 5% of over 55s.
Similarly, one in ten 18-24s said they intend to spend less in resort, compared with 4% of over 55s.
Among the other findings, First Rate reported:
Holiday Frequency: The proportion saying they would take just one holiday abroad next year rose one point to 41%, while the numbers planning two trips fell two points to 34%.
Holiday Duration: The survey found an increase in the proportion of holidaymakers planning trips of 8-13 or 15-plus nights, producing a one-point rise in the Holiday Duration Index. Otherwise there was little change in people’s plans.
Holiday Spending: First Rate found: “Holidaymakers intend to curb their spending. There appears real resistance to paying more on booking.” It also noted “a reluctance to take more travel cash away or to spend more once they arrive in their resort”.
The survey found holidaymakers aged 25-34 are “far more likely” to change their holiday plans than other age groups, and 40% of those with children felt rising costs could have a negative impact on their plans compared with 32% of those without children.
It also found a three-point rise year on year, to 37%, in the proportion saying they would holiday in the UK in 2019 “if the weather is good”.
However, Hodge said: “While people are staying in the UK when there is good weather, it’s not necessarily stopping them having a holiday abroad.”
The Holiday Confidence Index is produced by First Rate Exchange Services, based on an online survey of 5,114 UK adults conducted by YouGov in September. It is published in November in partnership with YouGov and the Institute of Travel & Tourism.
The report is available by email from: HolidayConfidenceIndex@firstrate.co.uk
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