Consumers show increasing desire to book overseas holidays as confidence in the economy grows. Ian Taylor reports
Confirmation that an improving economy is feeding into travel bookings has come from the latest Holiday Confidence Index published by First Rate.
The index, published this week, shows a two-point rise in ‘holiday confidence’ to 44% since September on the back of a three-percentage-point rise in consumers planning an overseas holiday to 57%. More than half these consumers have booked a trip in the next 12 months and one in three has booked two or more.
Alistair Rennie, First Rate head of business decisions, hailed the rise in this April index as “significant” and said: “A greater percentage [of consumers] intend to travel and we didn’t see that in September. Consumers are more confident in the economy and in booking a holiday and that has translated into bookings.”
The Holiday Confidence Index is based on six indices produced three times a year from a survey of more than 5,000 UK adults.
Four of the latest indices – on holiday spending and frequency – are down slightly on September and a fifth, on holiday duration, is flat with a small increase in those planning longer trips balanced by a rise in those planning shorter breaks.
However, Rennie said: “The survey shows an increase in numbers taking just one holiday and that is people coming back into the market.”
The survey results and index highlight how closely holiday intentions are tied to confidence in the economy.
Almost one in three consumers (31%) believe the economy will improve in the next 12 months, up from 26% last September and 13% a year ago, and confidence appears to have risen across all age groups although improvement was greatest among those aged 55 and over and least among 45 to 54-year-olds.
More than half of consumers (55%) expressed confidence in meeting their financial obligations over the next 12 months, up from 52% in September. One in four (24%) believe their personal finances will improve against 21% in September, and 38% are more confident about their job security, up from 37%. However, the overall feeling on personal finances remains negative with 35% not expecting their cash position to improve.
The index uses three measures to assess holiday-spending plans: the cost of a holiday booking, the amount of spending money taken abroad and total spending in a destination. Each showed spending intentions down slightly on September. However, First Rate noted this as a sign of “relative stability”. More consumers appear to view a foreign holiday as good value than in September, up from 50% to 54%.
First Rate noted: “The latest Holiday Confidence Index provides some grounds for optimism about consumers’ confidence levels. [However] it suggests some disparity between the intention to take a holiday and the ability to afford it. Financial constraints continue to be the main reason for not travelling.”
Rennie said: “The confidence of those who plan to travel is much higher than those who don’t intend to travel. There is a threshold of confidence consumers have to reach before they allow themselves a holiday.”
*YouGov polled 5,194 consumers online in mid-February on behalf of First Rate.
To request a copy of the First Rate Holiday Confidence Index, email holidayconfidenceindex@firstrate.co.uk