Foreign travel topping consumers' spending list – Barclays
Gary NoakesForeign holidays remain a major priority for discretionary purchasing, Barclays has said in its latest consumer spend report, with travel agents seeing more spend coming their way.
The card provider said February was a positive month for travel agents despite the rebound in consumer card spending slowing to its lowest level since 2022.
Barclays said travel agents recorded year-on-year growth in February of 10.1%, compared with 8% in January. It added this comes as 73% of Britons say they will be going on holiday in 2024.
Hotels, resorts and accommodation saw their lowest rate of growth (0.3%) since May last year, which Barclays suggests means “holidaymakers are opting for escapes abroad instead of staycations”.
Overall, February’s 1.9% growth in total consumer card spend represents the smallest increase since September 2022. Spending in bars, pubs and clubs was also at its lowest level since then.
Barclays also recorded a 2.2% fall in high street spending, excluding groceries, which it attributed to the recent exceptionally wet weather.
The Barclays Consumer Spend report combines hundreds of millions of customer transactions with consumer research to provide an overview of UK spending.
It notes that while total spending grew, the 1.9% year on year increase is “significantly lower” than inflation, adding that the drop in face-to-face retail “was a major contributor to this slowdown”.
However, it added: “Reassuringly, concerns about inflation, rising food prices and increasing household bills eased, while confidence in non-essential spending reached a two-year high.”
Another boost to discretionary spend was that food price inflation, at 7%, was the lowest since April 2022.
However, one cautionary note for the travel industry was the growing awareness of “drip pricing” where extras are added at checkout when shopping online.
Barclays found 32% of consumers were aware of these when booking airline tickets, while 37% named drip pricing as their biggest shopping frustration when paying online, with another 28% naming dynamic pricing as an irritation.
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Gary Noakes
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