A study conducted by RSM UK suggests that increasing living costs may lead to reduced holiday bookings this year.
As financial pressures mount, families prioritise essential expenses, potentially impacting the travel sector’s performance.
Consumers are expressing concerns as increasing living costs heavily influence travel decisions. A recent survey by RSM UK reveals a significant drop in domestic holiday plans. Families are particularly affected, with only 28% planning UK city breaks and 27% considering longer trips. This is a notable decrease from last year’s figures, highlighting financial strain.
Despite the economic challenges, travel remains a priority for many. The survey shows that 33% of families still plan an overseas holiday this year, although this is a decline from 37% previously. Short trips are also still on the agenda for many, with only 10% cutting back on these, showcasing the enduring importance of holidays.
Notably, when compared to other leisure expenses such as dining out, holidays are less likely to be sacrificed. Over a third of respondents indicated a reduction in eating out, but maintained their holiday plans.
Chris Tate from RSM UK comments on the data, emphasising the sacred nature of holidays for families. He notes the combined pressure of living costs and high holiday prices during school breaks as barriers for potential travellers.
Robyn Duffy, another analyst, points to a year-on-year softening in bookings, especially for Sunshine Saturday. She associates this trend with high airfares: “Last summer, air travel prices exceeded pre-Covid levels by 60% and were 19% higher than in 2022.” Such cost dynamics could further deter bookings.
The survey highlights that, in proportion to dining and leisure activities, travel is less prone to budget cuts. More than 36% of participants plan to curtail dining out, whereas only a minority intend to reduce travel budgets.
This inclination underscores the prioritisation of travel over other luxuries, despite general cost constraints.
Airfare increases are expected to persist, with uncertainties surrounding fuel prices. Consumers might hesitate when planning trips, particularly larger families. The continuation of higher airfares could result in reduced travel bookings overall.
Tour operators are witnessing an environment of financial caution among consumers, which may affect future tourism demands.
In response, travel and tour operators may need to adjust strategies, offering greater value and flexible options to reassure and attract customers.
The industry’s adaptability in providing competitive pricing and enhanced customer experiences could prove crucial amid these economic challenges.
The evolving economic landscape presents both challenges and opportunities for the travel industry. Stakeholders must remain responsive to market conditions to sustain consumer interest.
The travel industry faces a pivotal moment as it navigates economic pressures, requiring strategic adaptations.
By understanding consumer priorities, stakeholders can align offerings with current market demands.
