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UK Consumers Save and Sacrifice to Afford to Travel

Discretionary food and drink spending the first to be cut

March 14, 2017

UK consumers will cut back on eating and drinking out before sacrificing on leisure travel, according to February 2017 research conducted by Toluna for HSBC Global Research that examined attitudes about discretionary spending.

Primary Discretionary Spending* Category in Which UK Consumers Decrease Spending When Money Is Tight, Feb 2017 (% of respondents)

Based on a survey of 2,000 consumers ages 18 and older across the UK—nearly two-thirds of whom had annual incomes of less than £30,000 ($40,491)—the “Anatomy of the Consumer” study found leisure travel was respondents’ most popular discretionary spending category, followed by eating out and buying clothing or footwear.

But when it came to cutting back, eating out was the category most likely to be cut, mentioned by 30.2% of respondents, followed by travel (19.2%) and drinking out (15.2%).

UK Digital Travel Sales, 2015-2020 (billions of £ and % change)

Despite currency changes following last year’s Brexit vote that have hurt the value of the pound compared with foreign currencies, the study found the percentage of respondents who would spend their main vacation for the year in Europe—still the most popular choice even with a stronger euro—rose to 34.2%, up from 33.8% who did so last year.

The share who planned to stay in the UK dipped to 23.5% from 26.9% a year ago, so currency concerns seem unlikely to drive up “staycations.” However, the percentage of respondents who said they had “no plan for holiday” at the time of the survey also rose, gaining 1.5 percentage points to 24.5%.

Respondents were clear in their travel preferences:

  • British Airways was their favored airline, followed by EasyJet and a host of other discount carriers.
  • More than half (51.4%) would expect to get the best deal from an online travel agent over an airline or hotel site or by visiting a travel agent in person.
  • Hilton and Marriott were their preferred upmarket hotels, while Premier Inn was their budget hotel of choice.
  • Approximately 62% said they hadn’t or wouldn’t consider using Airbnb. The report didn’t examine why respondents wouldn’t use Airbnb, but among those who had or would, price was the key reason for doing so, followed by location.

eMarketer’s most recent forecast of UK digital travel sales predicts spending on leisure and unmanaged business travel booked via the internet will rise 7.2% in 2017 to £26.24 billion ($35.42 billion).

While spending is expected to grow annually through 2020, the rate of that growth is forecast to slow from a high of 9.7% in 2016 to 4.5% four years later.

Cliff Annicelli

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