The latest official tourism figures from the Office for National Statistics (ONS) were greeted as signs of a “buoyant” sector. However, this is a difficult line to sustain if we concentrate on outbound travel.
The figures for July, released at the end of last week, show something rather different. The ONS headlines were that the number of visits abroad by UK residents increased 3% in the three months to July compared with the previous three months. Spending abroad increased 5%.
These are estimated figures, seasonally-adjusted to eliminate the peaks and troughs of summer and winter that would otherwise distort them. They should thereby reveal an underlying trend.
A more like-for-like comparison comes from pitching the figures for the 12 months to July 2011 against those for the same period to July 2010. This shows a 2% rise in all outbound trips from the UK, but a 1% fall in leisure trips – holidays. That is not so positive, because the 12 month period to July 2010 was not good.
The year-on-year comparison with the month of July itself is more telling still, since July sees the start of the summer peak season. Both outbound trips as a whole and overseas holidays were down by 6%, though business travel remained 3% up year on year in the month.
A couple of mitigating factors are worth noting. July this year saw a later than normal start to the school holidays in England and Wales, which is likely to have pushed back the start of the summer peak. July 2010 appears to have seen a mini-surge in outbound leisure following the end of the World Cup before the schools broke up.
The comparison with two years previously therefore may be helpful. It shows a 4% drop in all overseas trips from the UK for July 2011 versus July 2009, and just a 3% fall in holidays.
That is somewhat better, but not great – 2009 was a dog of a year for travel and the situation has not improved. In July 2009 we had just seen four consecutive quarters of economic decline (falling GDP), remember. Since then the travel market has shrunk further.
Go back in time to July 2008 and the comparison is even more telling still. ONS figures show leisure trips from the UK this July down 17% on the same month three years ago. All trips to Europe were down 18%, to North America down 35%, and to the rest of the world down 7%.
This is slightly better than the same comparison in June which showed a 20% shortfall in all overseas trips. But remember the decline in the economy, and in outbound travel, began from mid-2008.
As I noted a month ago, this is the size of the market that has disappeared.
The ONS figures on spending overseas do not improve the picture. They show a 6% decline in spending by UK residents travelling abroad between July 2010 and July 2011. That is in line with the fall in numbers – the figures are for all trips – but it does not allow for inflation.
This spending figure does not include the full cost of trips – the air fares or payments to UK holiday companies – and average inflation in Europe, for example, is below that in the UK.
But it suggests people are broadly spending the same as a year ago. They will be getting less for their money and the industry will be taking less.