Cost of living could provide boost for package sales

Consumers view the rising cost of living and flight cancellations as major impediments to travel despite demand returning to pre‑pandemic levels, according to the latest research.

A survey in mid-June of 1,000 UK adults by market research firm BVA BDRC found three out of five regard the cost of living as a barrier to overseas holidays and half (49%) view cancellations and delays as a barrier, well ahead of concerns about Covid (23%). But these concerns could be boosting package sales, say researchers.

Confidence that holidays would go ahead fell month on month, with just 51% confident June trips would proceed compared with 58% in May.

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However, consumers’ intention to travel returned to 2019 levels with three out of four (76%) intending to take an overseas holiday in the next 12 months.

Flexible cancellation policies remained the number-one incentive to booking a trip, highlighted by 41% of respondents, ahead of special offers (36%). Just under a third of respondents remained concerned about Covid requirements.

The research found a decline in the proportion intending to book long-haul, especially to the US and Canada. The 12% expressing an intention to have a North American holiday was seven percentage points down on 2019.

The research also found a decline in the length of intended trips from an average 9.9 days in 2019 to 8.7 in the next 12 months – contradicting industry reports that customers are spending more on longer durations.

BVA BDRC research director Jon Young said: “The cost-of-living crisis is having a significant impact.”

But one of the consequences appears to be increased interest in package holidays. Young noted a relative decline in intention to take holidays in France and Italy and said: “France and Italy attract relatively high proportions of independent bookers. It’s possible this is less appealing than package trips in a time of financial uncertainty, lingering Covid uncertainty and cancellations.

“Greece, the Canaries and Turkey index significantly higher on all‑inclusive packages with their higher levels of reassurance.”

The survey found respondents’ ‘comfort’ with overseas travel had returned to within eight percentage points of the pre-pandemic level – an eight-point improvement on April, 16 points better than February and 25 points up on January.

BVA BDRC surveyed 1,000 UK adults between June 10-17 for its ClearSight UK International Holiday Tracker.

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