Latest figures released by the Office for National Statistics show a 6% increase in outbound travel numbers for the three months to April, compared with the previous three months.
This comes as no surprise; with its combination of extra bank holidays and a late Easter, April in particular was always going to be a popular month for holiday goers.
Indeed, inbound figures were also up by 4% compared with the previous three months – the boost provided by the Royal Wedding has certainly filtered through.
Figures for 2011 are shaping up to be far more positive than last year, with comparative data for the same period in 2010 up 4% for outbound and a significant 11% for inbound visits.
In absolute terms we are seeing a sustained pick-up in travel figures, but the numbers are still down on the heights of 2007 and 2008, so need to be viewed with caution.
Underlying economic concerns still permeate and there remains a lot of pessimism surrounding the short term outlook for the sector. Comments from Iata on the impact of fuel costs and taxes on European low cost flights highlight the challenges still to come, with easyJet already warning it will have to raise its prices.
This is compounded by our recent survey of travel sector experts which showed that 88% expect outbound traveller numbers to either stall or shrink through the remainder of the year.
With rising inflation and the prospect of increased interest rates, this should come as no surprise.
The second half of this year will be telling. Opec’s refusal to increase oil production means the increases in air fares that we have seen to date (figures for April show a jump of approximately 36% year on year) will continue and this cost will inevitably have to be passed on.
Consumers have consistently demonstrated their unwillingness to give up their holidays, however, and the industry is as resilient as ever. There has of course been a shift in the sorts of packages sought, with last-minute bookings proving increasingly popular, and the traditional two week holiday holding firm.
At the same time, we are seeing less appetite for short and mid-market breaks – the cheap weekend away is, at least for now, a thing of the past.
Fortunately, 2012 promises to be more positive. Our survey showed almost 80% of travel industry representatives expect some growth next year. Tui and Thomas Cook’s plans to bolster UK profits with retail expansion into new international markets should provide a further uplift to the industry.
Whilst the incremental rises in travel figures that we have seen so far in 2011 will not soar anytime soon, they do offer a light at the end of the tunnel. How the industry responds to the oncoming challenges will determine whether this is one of hope, or the glare of an oncoming train.
- The full report is available on the ONS travel and tourism page
Mike Saul is head of hospitality and leisure at Barclays Corporate