Spending on hotels, resorts and accommodation spend was down 7 pc versus last year says report
Last week, the International Monetary Fund (IMF) warned that many economies of the world’s bigger countries may be headed for a recession or at least a sharp slowdown, driving up the uncertainty about the fate of the global economy in 2023. In fact one sign of mounting uncertainty worrying consumers is that broadly consumer spending has fallen sharply, at least in terms of discretionary spending.
Yet, despite the latest warnings and high inflation that has ruled the world since the beginning of 2022, consumers seem to be continuing to splurge on tourism. According to latest UK consumer spending report by the British bank, Barclays, card spending on overseas travel in September continued to be ‘significantly up” on last year.
Barclays says that travel agents saw the largest spend growth per customer at almost 95 pc last month, followed by airlines at 60 pc. “People are more confident to holiday abroad than the same time last year when Covid-19 travel restrictions limited overseas trips,” says Barclays.
“Spend on overseas travel continues to be significantly up on last year’s level but overall growth in non-essential spending was only 1 pc compared to September 2021 and has slowed since July this year (3.6 pc in August, 8 pc in July),” Barclays said.
Spending in restaurants in September dipped by more than 12 pc year-on-year and more than half of those polled plan to have more nights at home to save money.
“Cost conscious consumers cut back on areas including clothing, restaurants and home improvements. But, overseas travel continues to be up on last year as consumers are more confident to holiday abroad,” adds the report.
“Spending on overseas travel remained in strong growth when compared to last year with travel agents and airlines seeing growth of 94.7 pc and 60.1 pc respectively,’’ says the bank.
According to the report, spending on hotels, resorts and accommodation spend was down 7 pc versus last year, in part due to the removal of international Covid-19 test costs and the British feeling more confident travelling abroad.
Overall consumer card spend growth of 1.8 pc in September compared to the same period last year was down from 4.7 pc in August and 7.7 pc in July as consumers spent less in retail and hospitality. The report says that rising energy prices and autumnal weather saw people spending 48 pc more on utilities compared to the same period last year, a higher uplift than the previous two months (45.2 pc in August and 43.9 pc in July).
The bank says that about 65 pc of the consumers surveyed looked for ways to save energy at home compared to 45 pc in August.
“The energy price increases in October are leading to 91 pc of Brits to feel concerned about rising household bills. Following the government announcement to help to reduce energy bills for UK households, just 31 pc say that the new measures have made them feel more secure about their personal finances,” adds the bank’s report.
“It is clear that consumers still want to enjoy many experiences that were curtailed during the pandemic,” says Mike Saul, head of hospitality and leisure at Barclays Corporate Banking.
