Concern about personal finances and the result of the election is making people less likely to travel abroad than in 2014. But the latest Holiday Confidence Index also gives cause for optimism. Ian Taylor reports
There is “a growing mood of uncertainty” among potential UK holidaymakers despite the improving economy, according to the latest First Rate Holiday Confidence Index.
The spring index, which measures people’s propensity to take a holiday, is one point down on a year ago and two points down on last September.
First Rate attributed the decline to uncertainty around the election and “increasing uncertainty…about the economic situation”.
The decline is chiefly due to a three-point fall in consumers’ intention to take overseas holidays, compared with a year ago.
All six index scores used to produce the overall confidence index are down on October and there are two down year on year – ‘Intention’ and ‘Cost of Booking’.
However, those who plan to take an overseas holiday appear more confident in the economy and more willing to spend on travel than a year ago.
The index is based on a survey of more than 5,000 UK consumers.
Alistair Rennie, head of innovation and insight at First Rate Exchange Services, described the findings as “a bit of a reality check”.
Falling confidence
“Consumer confidence has had a shot in the arm, but holiday confidence has fallen,” he said.
“What dragged the index down is people saying they are not going to travel. But those who plan to travel are more confident, plan to spend a little more and plan to take longer trips. I suspect what we are seeing is a little pre-election uncertainty.”
First Rate noted “a quarter of consumers [26%] have decided against holidaying abroad” in the next 12 months and called the two-point decline on the last survey, in September, “statistically significant”.
However, more than half (56%) of respondents still intend to travel abroad in the next year.
Almost half (49%) had already booked a trip and 28% had booked a second overseas holiday.
First Rate said this was “a significant advance” on the September 2014 survey, when 42% had a trip booked in the next 12 months and 22% a second holiday.
However, the figures are down on a year ago, when 51% had booked a first holiday and 30% a second.
Range of drivers
Rennie suggested there was more than one driver of the downturn in the index.
“It’s the most uncertain election in decades. It has also been the longest recovery from recession. If the Conservatives get back in, and you work in the public sector, you might fear more for your job.”
But he added: “We do expect more confidence in booking once the election is over.”
First Rate reported: “Consumers planning overseas holidays are much more bullish about the state of the nation’s finances and their own financial position.”
About half (47%) of holidaymakers regard their job as secure, compared with 31% of those not planning a holiday.
The confidence of those intending to travel is reflected in increased intention to travel to North America, despite the euro exchange rate making Europe cheaper than last year.Rennie said: “The exchange rate does not necessarily dictate where people go. But once a choice is made, there are people who will look at the currency rate.”
Effect of children
Having children can also be a factor, First Rate suggested, noting: “Of people planning overseas holidays who don’t have children, 61% expect to take two or more holidays. This falls to 42% of those with children.
“Social grade also has an impact, but not to the degree that might be expected. Nearly two-fifths (39%) of ABC1s plan to take only one holiday.”
The First Rate Spring Holiday Confidence Index is based on a survey of 5,000-plus UK consumers. It is produced in association with the Institute of Travel and Tourism, YouGov and the University of Wolverhampton, and published three times a year.