Gen Z ‘driving much of travel spend’ despite cost of living crisis

As many as nine in ten (87%) UK consumers plan to travel either abroad or in the UK this year despite the ongoing cost of living crisis, according to new research.

Almost two thirds (63%) intend to travel within the UK and a similar number (61%) plan to travel abroad, while 36% of consumers aim to take both domestic and international holidays – up from 33% last year.

Short-haul holidays are favoured by half (47%) of consumers, while a quarter (24%) of those surveyed plan long-haul trips, the survey of more than 1,000 consumers aged 18 and over found.

The study by business advisory firm BDO also disclosed that consumers are intending to spend more on their trips, with a net increase of 12 percentage points compared to last year.

Price rises are the most prevalent reason for those who plan to spend more, with 28% of consumers citing this as a contributing factor to increased spend on travel.

A smaller number (13%) expect to spend more by eating out more frequently on holiday and 12% plan to do more activities.

Consumers are also opting for more frequent but shorter holidays this year compared with 2023. The survey recorded a 5% net increase of people choosing to go on more holidays and a 2% decrease in the length of holidays.

This trend is driven by Gen Z consumers, aged between 18-24, which showed a 21% increase in the frequency of holidays this year compared to last.

The Gen Z group’s travel intentions are also slightly higher than the overall sample, with 89% intending to travel this year.

Spain is the most popular overseas destination (43%), followed by Greece and Italy (both 30%) and France (29%). A fifth (21%) of those travelling abroad intend to go to the US.

The most top domestic destinations include the southwest of England (17%), followed by Scotland (12%) and London (11%).

BDO partner Tom Holt said: These results may come as a sigh of relief for those in the hospitality and leisure industry, and those in its supply chain, who we know have been disproportionately affected by both the Covid-19 pandemic and the more recent cost-of-living crisis.

“Due to challenging economic conditions, the competition for the consumer purse is incredibly tough, with our research suggesting that consumers are choosing to prioritise discretionary spend on experiences like travel rather than on products.

“Much of the spend on travel is being driven by Gen Z consumers, likely a result of this category being less vulnerable to the rises in mortgage repayments and energy bills compared with other age categories.”

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