Demand for foreign holidays is holding up better than for domestic breaks, new consumer card spending data reveals.
Pointing to a preference for making memories over buying physical goods, holidays abroad remain a priority, according to Barclays.
February was a positive month for travel agents, as they recorded higher growth (10.1%) than in January (8%), with a 15.3% rise in transactions.
This comes as almost three quarters (73%) of people say they will be going on holiday in 2024.
Spending with airlines was up by 9.6% last month with transaction growth of 20.3%.
However, the hotels, resorts and accommodation sector saw its lowest rate of growth (0.3%) since April last year with month-on-month transactions down by 0.8%, suggesting that holidaymakers are opting for escapes abroad instead of staycations, according to the bank.
Overall card spend on travel, including public transport, rose 9.3%, the Barclays monthly consumer spend tracking found.
The report disclosed that overall consumer card spending grew just 1.9% year-on-year last month – significantly lower than the latest consumer prices index inflation rate of 4.2% and the smallest growth since September 2022.
Barclays said: “Consumers’ confidence in their ability to spend on non-essential items reached its highest point since November 2021 last month, at 59%.
“Meanwhile, concerns about inflation, and rising household bills also softened to 84%, the most positive figures for more than two years – indicating that easing inflationary pressures are having a positive impact on household finances.”
Barclays head of retail Karen Johnson said: “February’s wet weather meant Brits chose to spend more time indoors, resulting in a slowdown in high street and hospitality spending. This shift in behaviour meant ‘insperiences’ enjoyed a boost, as consumers opted to enjoy cosy nights in with a TV show and a takeaway.
“At the supermarket, the majority of shoppers have noticed the impact of supply issues on stock, with tea shortages causing the most concern. Meanwhile, ‘drip pricing’ has topped the list of shopper bugbears, particularly when using food delivery services and buying airline tickets.
“With Brits having reined in discretionary spending during the winter months, and as inflationary pressures begin to ease, retailers will be hopeful that the onset of warmer weather lifts spending – particularly if consumer confidence improves in the summer.”
The bank’s chief UK economist Jack Meaning added: “We have continued to see encouraging signs of slowing price growth so far in 2024, particularly in the retail sector.
“Recent data shows shop price and grocery inflation decelerated significantly in February, as retailers offered shoppers discounts and promotional offers.
“This will be a welcome reprieve for consumers, and a probable explanation of last month’s subdued card spending growth: while many people will have taken advantage of recent price promotions, they look to have held back on spending at least some of what they saved elsewhere.”