Spending on holidays abroad could take four years to recover to the level of 2007 as consumers take fright at the state of the economy.
That prediction from market analyst Mintel follows a study suggesting more than one in three consumers have withheld booking a holiday this summer because of the recession.
The Mintel British Lifestyles survey, published on Thursday, studied adult spending intentions over the next six months and found 35% saying the recession had stopped them booking a main holiday.
Senior travel and tourism analyst Tom Rees said: “We asked about the things consumers had been hoping to do and had put off because of the recession, and holidays came out top.”
If that reflection of consumer intention is accurate it could confound industry hopes of a strong late market this summer.
However, Mintel fears the impact could be long lasting, with the value of overseas holidays – once inflation is taken into account – not recovering until 2013. It estimates total UK travel spending in 2014 at £2.5 billion a year less than in 2007.
This is a despite the survey finding a minority of UK adults affected by the recession so far. Seven out of ten reported cutting spending and 59% were concerned about their financial situation, but 43% reported being personally affected and 37% worried about their job.
Mintel foresees this turning into a long-term decline in holiday spending.
Rees said: “There are those who do not have the money [to travel]. But people not directly affected by the recession have cut back because they are afraid. That reluctance could have a long-lasting affect. We do not see confidence returning in the short term.”
However, the study confirms the resilience of the traditional package holiday, reported exclusively by Travel Weekly last month.
The British Lifestyles survey reports: “There is clear evidence the trend [in package tour decline] has reversed. Normally, packages are vulnerable to an economic recession and suffer a decline in numbers. However, consumers are increasingly looking for the reassurance and security of established brand names.”
Image: WestEnd61 / Rex Features