The latest Holiday Confidence Index for Spring 2016 from First Rate Exchange Services reveals an encouraging stability in consumers’ appetite for overseas travel in the year ahead, despite the impact of the weaker pound on their pockets, the ongoing threat posed by terrorist attacks and a sharp fall in confidence about the UK economy.
More than half of those questioned in the online survey of 5,155 people intend to holiday abroad in the coming 12 months, while fewer have yet to make a decision and this means that the overall index remains at 49, the same as in winter 2015 and a year ago.
Although resilient in their determination to press ahead with holiday plans, respondents to the latest survey feel less positive about the UK economy than at any time in the past three years. However, the 10% year-on-year fall in numbers expecting the economy to improve in the next 12 months is, perhaps, only to be expected, given mounting speculation about the possible negative consequences of a BREXIT vote in the forthcoming EU referendum.
Despite these misgivings, the six sub-indices that contribute to the overall Holiday Confidence Index score are either level pegging with a year ago or have increased since then.
The Cost of Booking Index, which measures spending on holiday bookings, has risen one point to 40 compared with last quarter and spring 2015, while the Travel Money and At Destination Spend indices have both moved up a point since last quarter. While giving some cause for optimism about holiday spending, the latest findings may have more to do with holidaymakers’ awareness that the weaker pound will require them to increase their budgets to cover costs than with an underlying desire to spend more on trips abroad.
Nonetheless, 56% of respondents to the spring survey - conducted in partnership with the Institute of Travel & Tourism, University of Wolverhampton and YouGov – intend to holiday abroad in the coming year and this is close to matching actual bookings. In fact, 52% of holidaymakers have already booked their first trip, while a third of those taking two or more trips have arranged a second holiday. This is a significant increase on spring 2015 when only 28% had committed to a second trip overseas.
The research also reveals that shorter trips abroad are continuing to gain ground. While seven-night holidays remain the most popular single option for first (26%) and second holidays (27%), there has been a marked 3% year-on-year decline for both. Despite the fall of sterling and concerns about the impact on prices of a BREXIT vote, this has not yet dampened demand for Eurozone holidays. Two-thirds of holidaymakers intend to travel there on their first trip abroad, while 62% of respondents taking two or more trips are planning Eurozone trips for their second holiday. In both cases this represents a rise since last quarter and also year-on-year. While confidence about the economy has fallen, there is an encouraging consistency in attitudes among holidaymakers about their trips overseas.
More than two-thirds (67%) rate holidays abroad as an important part of their lives and 43% are prepared to cut costs elsewhere to ensure they can afford to travel abroad. Almost three-quarters of respondents (72%) think ATOL protection is important and this figure would be higher were it not for the less-cautious attitude of 18-24 year-olds, only 55% of whom rate ATOL protection as important.
Meanwhile, although over three-in-five (62%) holidaymakers are concerned about the threat of terrorism, they have not let this dissuade them from travelling abroad. In fact, 46% say they have not made changes to their holiday destination because of terrorist acts. This ties in well with the 57% who say they are unlikely to change their holiday plans – a jump of 10% compared with winter 2015 and up 5% on spring 2015.
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