Holiday confidence drops to three-year low
Consumers are less confident about committing to overseas holidays than at any other time in the past three years, according to a new survey.
Of the 5,067 people questioned by YouGov, only 53% were planning to travel in the next 12 months, 2% fewer than last year. The number of people who said they weren’t planning to go abroad rose 2% year on year to 28%.
The Holiday Confidence Index, carried out on behalf of First Rate Exchange Services in partnership with the Institute of Travel & Tourism, blamed the Brexit vote and sharp falls in the value of sterling.
While a third of those questioned said they expected the UK economy to improve over the next year, which was a 14% rise since the pre-EU referendum HCI survey in April, the Holiday Intention Index has dropped to 61, its lowest level since the survey started in 2013.
There has also been a significant decline in the number of people planning trips to the Eurozone since the spring and sterling’s subsequent slide in value against the euro.
In April 2016, when the last HCI report was published, 66% of people were planning trips to the Eurozone but the latest report found that only 63% were intending to travel there. The number of people planning trips to other European countries has remained constant at 7%.
In addition to currency concerns, 65% of travellers said they were worried about terrorism in holiday resorts, although 54% said they were unlikely to alter their travel plans.
There has been a two-point year on year fall to 37 in the Holiday Frequency Index, which measures the number of holidays planned, although the Holiday Duration Index, which measures the length of stay, remains steady at 38.
There has been a rise in the number of holidaymakers planning to spend more, including on the cost of the holiday and in the amount they take with them.
At the same time, the number of holidaymakers who say ATOL protection is a priority has risen to 75%, its highest level since the start of the survey.
Yet the latest survey reveals that independently-booked holidays, which may not be ATOL protected, now outstrip demand for packages by a ratio of about 2:1.
Liam Hodge, First Rate Exchange Services head of insight said: "Our latest report reveals a clear mood of consumer caution when it comes to planning how to spend – or not spend – their disposable income.
"What comes as a surprise is that more people intend to keep a tight rein on leisure spending at the same time that significant numbers are voicing confidence in the economy and also about their personal finances and job security.
"Despite this, there is a hard core of people- over half the population according to our research – who are firm in their resolve to take overseas holidays.
"The challenge for the travel industry will be to provide those holidaymakers with the value they will undoubtedly be looking for, faced with the falling pound, and equally to convince the rising numbers of people not planning to travel abroad that trips overseas are affordable."
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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