UK Travel Spending Declines for First Time Since Covid Restrictions Lifted
Travel spending in the United Kingdom has fallen for the first time in five years, marking a significant shift in consumer behaviour since the easing of Covid border restrictions in March 2021. According to new data released by Barclays, travel spending dropped by 3.3 per cent in March, a decline attributed to rising holiday costs and disruptions caused by the ongoing US-Iran war.
Key Factors Driving the Decline
The majority of UK consumers, approximately 70 per cent, expressed concerns about escalating travel expenses amid the broader cost of living crisis. Additionally, around 57 per cent of those surveyed cited worries over travel disruption due to tensions in the Middle East, with 11 per cent opting to cancel their intended travel plans altogether.
This trend has led many holidaymakers to delay trips abroad or swap them for staycations, as reflected in the spending data. In March, consumers spent 4.6 per cent less at travel agents year-on-year, 4.1 per cent less with airlines, and 2.9 per cent less on public transport.
Broader Consumer Spending Patterns
While travel spending saw a notable decrease, overall consumer card spending in the UK increased by 0.9 per cent year-on-year. However, growth in non-essential spending slowed to 1.1 per cent in March, indicating a more cautious approach from shoppers.
Jack Meaning, chief UK economist at Barclays, commented on the findings, stating, “Shoppers delaying major purchases and building up a savings buffer in response to the shock from the Middle East reinforces our view that activity will be muted in the coming months.”
Insights from Barclays Research
The Barclays Consumer Spend research, which analyses millions of customer transactions alongside survey data from 2,000 UK respondents between 27 and 31 March, provides a comprehensive view of current spending habits. Karen Johnson, head of retail at Barclays, added, “March’s figures may highlight some differences between how consumers feel and how they actually spend. Cost-of-living concerns and economic uncertainty continue to weigh on confidence, prompting caution and a desire to cut back, but spending remains resilient across several categories, namely clothing, entertainment and digital content & subscriptions.”
This data underscores the complex interplay between consumer sentiment and actual expenditure, with travel being a notable casualty in the current economic and geopolitical climate.
