The value of the UK holiday market in 2023 will exceed 2019’s pre-Covid level, as consumers continue to prioritise spending on travel, according to new research by Mintel.
The research specialist forecasts the market this year will reach £63 billion, up 13% on 2022.
Mintel’s British Lifestyles report found that, despite the squeeze on people’s income, holidays are the nation’s top discretionary spending priority, as a third (32%) of Brits say they would most want to continue to spend on holidays even if they had to cut their overall expenditure.
Jennie Bryans, travel and leisure analyst at Mintel, said: “Despite ongoing inflationary pressures, holidays remain a priority for many.
“However, travellers continue to look to travel brands to help them make cost-saving decisions, with tools such as booking calendars, monthly payment options and low/no deposits, winning consumers over at the time of booking.
“With significant pent-up demand remaining following the Covid-19 pandemic, there continues to be a stronger interest in beach resort holidays and luxury experiences abroad compared to before the pandemic.
“Travel brands have responded to this increased demand for beach resort holidays by proactively promoting cheaper destinations with a favourable currency exchange rate, such as Turkey and Bulgaria.
“While many have adjusted their holiday behaviour to control costs, for example by choosing a shorter duration or lower-cost accommodation, it is inevitable that some will not be able to afford to travel as frequently as they did before the pandemic.
“As such, shorter breaks, which are often taken on top of consumers’ main holiday, will recover at a slower pace.”
The report also found that 45% of women feel financially worse off compared to a year ago, compared to just 35% of men.
And just over half (51%) of women expect to cut back on non-essential spending in response to rising prices compared to 39% of men.
Overall, Mintel estimates that total annual consumer expenditure will grow by 6.5% to reach £1.73 trillion in 2023 – however, much of the growth is driven by rising prices. This compares to 15% record growth between 2021-22.
Francesca Smith, Mintel’s senior consumer and lifestyles analyst, said: “While few have escaped the severe impact of the cost-of-living crisis, women appear to be paying a higher price.
“They are more likely to be in insecure or part-time employment, typically earn less money and bear a more significant burden of unpaid care work, leaving them more exposed to tougher economic conditions.
“The income squeeze has resulted in many savvy behaviours which we think will stick in the long-term.
“One category from this year’s British Lifestyles research that provides optimism is holidays, and we expect spending on this to continue to be prioritised.
“The value Brits place on holidays has only accelerated since the pandemic. During tough times, going on an extended break offers the ultimate escapism from everyday life and will be squeezed in wherever possible.”