Spending with agents continues to grow even as summer winds down
Will PayneConsumer spending with airlines and travel agents continued to grow last month despite the summer season starting to draw to a close, according to new data from Barclays.
Spending with airlines grew by 32.1%, while travel agents saw a further uptick of 3.7% in August – yet the uplift was lower than in July (39.1% and 7.8% respectively).
New data from OTA Lastminute.com, meanwhile, suggests the draw of late all-inclusive bookings was continuing to drive fresh summer sales, with bookings surpassing 2022 levels.
Esme Harwood, director at Barclays, said the rainy weather impacted high street and hospitality venues in August, but Brits were still keen to spend on memorable summer experiences. "Holidays abroad boosted international travel and pharmacy, health and beauty stores," she explained.
It comes after spending with travel agents rebounded in July after slowing significantly in June following multiple months of growth. Prior to this, spending on airfares and agencies took a big leap in May, outpacing all other areas of consumer spending.
Last month, consumer card spending grew 2.8% overall year-on-year, noticeably lower than the latest CPIH inflation rate of 6.4% and July’s growth figure of 4% as rainy weather cast a cloud on the high street.
Spending on essentials saw just 1% growth – the lowest uplift since April 2020 (-2.9%), largely due to a sharp decline in spend on fuel (-20.1%).
A fifth of Brits said despite the rising cost of living, spending on luxury items and/or experiences is still a priority to maintain their desired lifestyle, with holidays abroad (44%) and hotel stays (22%) cited as the top purchases among this group.
To ensure they can afford to spend on memorable moments, 27% of these shoppers are cutting back on takeaways and fast food, while a fifth (19%) are reducing costs associated with socialising.
Abbas Khan, UK economist at Barclays, added: "Muted spending growth in August is in line with other data sources, such as soft PMIs and stalling consumer confidence, suggesting that the bite from monetary tightening is starting to be felt more acutely."
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