Consumer ‘holiday confidence’ has failed to bounce back following May’s election amid a deepening divide between the holiday ‘haves’ and ‘have-nots’.
That is the conclusion of the latest First Rate Holiday Confidence Index, based on a survey of more than 5,000 UK consumers.
The index, published this week, showed a two-point fall on its level this spring and on a year ago to 47.
The findings contrast with the strength of consumer confidence in other areas. Barclaycard this week reported a 4.5% year-on-year increase in consumer spending from April to June.
But the First Rate survey found decisions “appear to have hardened” among consumers previously unsure whether they would take a holiday abroad in the next 12 months.
First Rate Exchange Services head of strategy Alistair Rennie said: “It’s disappointing to report a fall in holiday confidence. However, the decline is more a consequence of the increased numbers who have decided against travel than a fall in demand from seasoned holidaymakers.”
All six measures of consumer intention that make up the Holiday Confidence Index fell: holiday intention, frequency, duration, cost of booking, travel money and destination spending. Intention to travel abroad was down three points on a year ago to 62, holiday frequency down one point and duration down two.
Yet First Rate noted 55% of survey respondents intended to take an overseas holiday, with 60% of these having booked a holiday – a six-point increase on last year.
Rennie said: “We see a wide division between those travelling and those not. It’s more and more stark. We’ve seen a lot of people undecided [previously]. Now they have decided they’re not travelling. The number saying they will travel has fallen just 1%.”
However, the index also noted “clear signs of belt-tightening”, with a fall in all three holiday-spending indices. The cost-of-booking and destination-spending indices fell three points on last year, with the travel money index down one point.
Rennie said: “We started this index at the back end of the recession and assumed all the measures would be positive. It has not played out that way, but that emphasises the need for a specific industry index. Pre-recession, a lot of people came around to the idea that holidays were no longer a luxury. This suggests that post-recession, a lot of people have put holidays back as a luxury.”
Yet he stressed: “We’ve seen a significant rise in the number of people going to travel who have already made a booking, and there is still business to win.”
The pound’s strength against the euro appears to have had an impact on destination choice, given a four-point rise to 68% in those choosing the eurozone for a first holiday of the year.
The First Rate Summer Holiday Confidence Index surveyed 5,176 UK adults in May. The index is published three times a year. It is available from HolidayConfidenceIndex@firstrate.co.uk
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