The latest Holiday Confidence Index paints a mixed picture for the industry. By Ian Taylor

UK consumers remain cautious about spending on holidays despite average living standards rising this year for the first time since 2008.

That is the conclusion of the latest Holiday Confidence Index from First Rate Exchange Services which predicts “a challenging time for the travel industry” in the next 12 months.

The Winter 2015 Index, published this week, is based on a survey of more than 5,300 consumers. It reports “a prevailing mood of caution both in taking holidays abroad and the UK economic climate”, with one in five consumer respondents (19%) undecided on whether to book an overseas holiday in the next year – a rise of three percentage points on the last survey in May.

However, the index also gives grounds for optimism. It shows an improvement in confidence since the previous survey which suggested a two-year low in consumers’ holiday expectations, with a two-point improvement in the intention to travel abroad and a three-point increase in the number of overseas trips planned by those who will take a holiday.

There was also a four-point increase on a year ago to 46% in the proportion of consumers who have already booked a trip between now and September 2016 – with half of these (52%) due to travel before the end of this year.

First Rate suggests families are “feeling the pinch”, but says demand among 25-34-year-olds – “the age group most likely to be in full employment and without the commitments of a young family” – remains strong.

Three out of five respondents (62%) aged 25-34 intend to have at least one overseas holiday in the next year and 59% more than one.

The Holiday Confidence Index (HCI) is a composite of six indices which measure consumer holiday intentions, the likely frequency and duration of holidays, the expected costs of booking, amount of money to be taken abroad and spending in destination.

The previous index, published in July, found a fall in overall confidence amid a deepening divide between the holiday ‘haves’ and ‘have-nots’.

Abta found a similar division among households in its Holiday Habits Report published at this month’s Travel Convention, with the proportion of UK adults taking any kind of holiday over the previous 12 months falling (Travel Weekly, October 22).

First Rate says families are cutting back, with its report noting: “The greater the number of children, the fewer holidays people will take.”

Three quarters (74%) of those not intending to have an overseas holiday in the next year saying other financial priorities were more important.

Alistair Rennie, First Rate Exchange Services head of strategy and innovation, said: “Successive Holiday Confidence Index reports have shown there is a hard core of people intent on travelling, and those numbers remain pretty consistent.”

Referring to the one in five undecided on whether to have a holiday, Rennie said: “The challenge will be to convince the growing numbers unsure whether to holiday abroad to make bookings.”

The First Rate Winter 2015 Holiday Confidence Index is based on an online survey of 5,319 UK adults conducted by YouGov. The index is published three times a year and is available from