Government cuts to be imposed in next week’s spending review are likely to dampen demand for foreign travel.
The warning came from Barclays Corporate on the back of figures from the Office of National Statistics showing a declining trend in overseas travel over the past year.
The number of visits abroad by UK residents dropped by 9% or 5.5 million to 55.8 million in the year to August against the same period a year earlier.
Travel to other European countries was down by 10% to 43.5 million; down 9% to 3.4 million to North America and down 3% to 8.9 million to other parts of the world.
Business travel trips fell by 15%, holidays by 8% and visiting friends and relatives 7%.
The peak summer months of June, July and August saw some respite with the number of people travelling abroad rising by 4% to 14.2 million.
Barclays Corporate head of hospitality and leisure Mike Saul said: “Over the last few years consumers in continuous employment have benefited from historically low mortgage rates which have allowed them to keep splashing out on travel and leisure.
“This may all change as the impact of the Government’s spending cuts start to take hold.”
Overseas residents’ visits to the UK increased by 6% to 7.6 million in the June to August quarter.
Inbound travel for the 12 months ending August was down by 1% year on year to 29.5 million, according to the latest international passenger survey.
“The inbound travel industry continues to benefit from the pound’s weakness against the euro and the dollar,” said Saul.
“This makes the UK, and in particular London, an attractive destination for foreign and domestic visitors with associated valuable spending at hotels and restaurants.
“However, anecdotal evidence points to a slower pick up outside the capital and overall the recovery of the sector continues to remain fragile.”