Stability and certainty needed to unlock consumer spending, says UKHospitality chair

The government must urgently set out a plan aimed at easing economic uncertainty as consumers continue to lack the confidence to spend, according to the head of UKHospitality.

Kate Nicholls, chair of the organisation, said household savings are twice the level they were during the pandemic, but people are reluctant to part with their money.

“Consumers clearly don’t feel confident enough to go out and spend, and you’ve seen successive decisions that have been unpredictable and uncertain with unforeseen consequences,” she told Abta’s Travel Matters conference in London.

She said it was “not surprising” people are opting to continue saving their money, going on to note the impact on the travel sector.

“You don’t feel that you can reliably put your money aside and put a deposit down for a holiday six or eight months in advance,” Nicholls added.

She called on the government to offer a “clear direction and vision” on how it would help consumers and businesses.

“What businesses need is stability and certainty in order to plan and that’s what our consumers need too,” she said.

“If [the government is] looking at tackling the cost of living, you can’t tackle the cost of living until you address the cost of doing business and making sure the pound in somebody’s pocket goes further.”

She said a “big reset” would be required in the winter regardless of who leads the government after next week’s by-election in Makerfield, Greater Manchester.

The seat is being fought by Andy Burnham, who has said he will enter any Labour leadership race if he wins.

Abta chief executive Mark Tanzer added: “My sense is there’s a sort of general disillusionment with politicians of all stripes at the moment in terms of their focus being on party issues internally rather than the issues that matter to households.

“So I’m not sure a new leader will change that. If there is going to be a leadership contest, I think the sooner the better for consumer confidence.

“But I don’t think that’s really what’s driving this. I think it’s more a general nervousness about the state of the economy, with international relevance as well. People are reticent about spending their money.”