A recent NatWest report reveals significant changes in UK holiday spending habits for 2024. Highlighting the importance of travel, the survey shows a shift towards viewing holidays as essential rather than luxury, even amidst financial challenges.
- Nearly 20% of UK consumers plan to spend more on holidays in 2024 compared to 2023, according to the report.
- Despite weaker expected finances, a third of those affected still intend to increase their holiday budgets.
- Younger generations, such as Gen Z and Millennials, face higher pressure to reduce spending but are still prioritising travel.
- Dynamic pricing is becoming more accepted in travel for accommodation and flights among consumers.
A recent report by NatWest highlights a notable trend in the spending habits of UK consumers, indicating a shift in the perception of holidays from luxuries to necessities. According to the Retail and Leisure Outlook Report 2024, conducted by NatWest, 17.3% of UK consumers intend to spend more on vacations this year, a testament to the enduring value placed on travel and exploration even amidst financial constraints.
Notably, even among individuals who are anticipating financial pressures, a significant portion—33.5%—still plans to increase their holiday spending. David Scott, head of consumer industries at NatWest, commented, “The travel industry will be heartened to hear that a fifth of consumers are planning to increase their holiday spending this year. This shows just how much Britons value travel and exploration, even at times of high financial pressure.”
The report finds that nearly half the consumers foresee a weakening of their financial situations compared to 2023. However, only about 27.1% of these individuals intend to cut down on holiday expenses. Richard Lim, chief executive of Retail Economics, stated that holidays have become a “critical, almost non-negotiable area of spending for households,” particularly in light of past disruptions during the pandemic.
The data also reveals a generational divide, with Gen Z and Millennials facing greater pressures compared to those over 60 to reduce holiday spending. Cost-saving measures considered include shorter trips, opting for domestic travel instead of international flights, and seeking shorter flights to minimise expenses.
Furthermore, the report reveals a growing acceptance of dynamic pricing strategies in the travel sector, specifically for hotel and airline bookings, marking a shift in consumer expectations and behaviours.
Such financial adjustments by households, while prioritising holiday expenditure, inevitably result in reduced spending in other sectors. Lim notes that non-essential categories and home-related expenses become lesser priorities as budgets tighten due to elevated borrowing costs, particularly impacting those with recent mortgage or rental renewals.
The NatWest report reflects an enduring commitment to travel among UK consumers, even amidst financial pressures, reshaping spending priorities.
