Holiday makers still restricting their budgets
Reports are clear that the average wage is increasing, but this has not had any effect on holidaymakers who are planning to restrict their spending on bookings to last years amount and over half, 60% say that they will not be spending anymore when they get to their destination. This is a clear sign that consumers are continuing to tighten their belts, with holidays being one way in which they can restrict spending.
Another factor which has been pointed out on the First Rate Holiday Confidence Index is that many people still have serious doubts about the reported recovery in the UK as a whole, naturally they are concerned about the economy in general and their particular household finances, even though inflation was flat in September. Reports indicate that 29% are not sure of further improvement in the economy with 23% only thinking their personal finances might improve.
There is some good news through, as 40% felt their jobs to be secure over the coming year and only a minority of just 17% of those asked felt insecure. One thing that has been a bright light was the news that the concern shown about the effect of rising interest rates has diminished, the index found that only a small number 16% felt a rise in rates would adversely affect their holiday plans, this contrasts with 24% only a year ago.
The head strategy and innovation at First Rate Exchange Services, Alistair Rennie, when asked said: “Travel firms would obviously like to see the amount spent on bookings moving upwards. Disappointingly, there is nothing to suggest this is happening. Commitment-free 25 to 34-year-olds are the exception.”
Until confidence returns then it is hard to see much improvement in holiday spending for some time yet.