The latest Holiday Confidence Index from First Rate suggests a dip in the outlook for bookings. Ian Taylor reports
Consumer confidence to book holidays appears to have slipped since the spring, with First Rate’s Holiday Confidence Index showing a one point fall on March.
The decline is disappointing after the last index showed a two-point rise on September 2013, reflecting growing confidence in the UK economy.
The index, launched last year, is based on a survey of 5,000-plus UK consumers. The results go to produce indices on holiday-booking intentions, frequency, duration and spending and allow First Rate to compile an overall Confidence Index.
The summer index, based on research in June, shows a one-point fall on March to 43, reflecting a small decline in intention to book overseas holidays among those who travelled in the past 12 months. The index remains up on last September when it was 42.
First Rate Exchange Services head of insight, Alistair Rennie, described it as “a bit of a disappointment”. He said: “It’s a small fall after an increase and not what was expected.” But he added: “The index is largely stable.”
The index reflected a two-point fall (from 71% to 69%) in consumer intention to take a holiday abroad.
Rennie said: “Overall confidence at 69% is still higher than last year. We still see a more confident consumer.”
However, the First Rate report notes: “Despite continuing growth in survey respondents’ confidence about the UK economy, there has only been a marginal improvement to confidence in their own financial circumstances.”
Rennie said the findings “largely chime with other indicators of consumer confidence”. He told Travel Weekly: “People’s view of the macro-economic situation has improved but there is a lack of perceived improvement in people’s financial circumstances.
The economy is going great guns but the metrics that drive intention to book holidays – job security and personal finances – are largely flat.”
First Rate suggests concerns about the cost of holidays may also be part of the reason. It notes: “Almost a quarter of consumers expect the cost of booking a holiday to rise in the coming year.”
At the same time, slightly fewer people appear to believe trips abroad are good value for money – 52% in the latest survey against 54% in March.
However, First Rate notes: “Overall the holiday market looks stable . . . Over half of consumers (56%) intend to holiday abroad and 54% have booked their first trip. The number who said they will cut other spending to afford a trip abroad this year has risen.”
Among consumers who holidayed abroad in the past year and intend to travel in the coming 12 months “there have been small increases in those planning to take more holidays and those intending to take longer trips”, and almost one in five anticipate spending more while abroad.
First Rate will carry out its next Index survey in September when Rennie believes talk of rising interest rates could be reflected in confidence levels. He said: “We’ll ask about the impact on intention to travel on the threat to raise interest rates.”
*YouGov surveyed 5,052 adults in June 2014 on behalf of First Rate; 2,215 had taken an overseas holiday in the past 12 months.