Spending on holidays abroad continues to outpace demand for domestic breaks, according to new Barclays data.
Despite consumers continuing to prioritise overseas trips, the growth in spend at travel agents remained almost static at 0.1% in June, although transaction growth reached 3.4%.
However, consumer card outlay on airlines increased 33.5%, significantly greater than the growth of spending on international and domestic hotels, resorts and accommodation, which rose by 5.4% over the previous month.
The study found that spending in the transport sector is also being increasingly impacted by “drip pricing” – where companies add extra fees and charges during the online checkout process, meaning that the final price is higher than what was originally advertised.
More than four in 10 (43%) consumers report that they have noticed more examples of “drip pricing” when shopping online, especially on airline tickets (47%).
Overall consumer card spending grew 5.4% year-on-year in June – less than the latest CPIH inflation rate of 7.9%, yet noticeably higher than in May (3.6%), according to Barclays.
This came as more than two thirds (67%) of shoppers look for ways to reduce the cost of their weekly shop, with almost a third (32%) shopping at multiple supermarkets to source a range of deals.
Shopping at discount stores was up 8.8% – the largest growth since April 2021 – in a further sign that people are seeking out value-for-money wherever possible.
Meanwhile, research by accommodation site Trivago found that 28% of Britons view holidays as an essential as opposed to a luxury.
The poll of 2,000 people also revealed that almost half (48%) would stop buying new clothes, while 37% and 31% would give up takeaways and coffee respectively for a year to afford to go on holiday.
New chief executive Johannes Thomas said: “Holidays are very important to UK consumers, and they are unwilling to let the current economic situation get in the way of a much-needed getaway.
“While getting a break from work and every-day life is considered an essential for our mental health, perhaps even more so during such challenging times, we can’t ignore the impact of the ongoing price increases.”
Barclays director Esme Harwood said: “June saw Brits get into the swing of summer, bringing a welcome boost to several sun-starved categories.
“Pubs and bars benefitted from Brits soaking up the sunshine in beer gardens, while butchers and garden centres saw a jump thanks to the arrival of barbecue season.
“Even clothing retailers, which have struggled since the start of the cost-of-living crisis, returned to growth, as consumers took advantage of the heat to refresh their summer wardrobes.”
However, Barclays UK Wealth Management chief investment officer Will Hobbs warned that the UK economy “remains in a precarious spot”.
He added: “Inflation contagion is perhaps furthest advanced here on the evidence of incoming wage and core inflation data. There is more work for central bankers yet, even as the creaks and strains on the mortgage and other borrowings become increasingly audible.
“Difficult quarters lie ahead as the surge in interest rates continues to put pressure on household cash flows.
“However, there are mitigants. Much of that extra mortgage strain will fall on households more able to bear it, with significant excess savings still left over from the pandemic.”