Spending with travel agents continues to defy slowdown – Barclays
Gary NoakesSpending in travel agencies remained resilient in July as holidaymakers paid their balances, the latest Barclays Consumer Spend report shows.
The number of transactions with travel agents increased by 10.5% year-on-year, while spend rose by 6.6%, far outstripping most other categories. However, airline performance was much weaker, with transactions up by 0.6% and spend by 0.8%.
In June, travel agents saw a 13.3% leap in transactions and a 5.5% increase in spend, while airline spend was up by 3.2% and transactions by 5.7%.
The July figures are set against a background of a wider 0.3% year-on-year drop in consumer card spend, which has been blamed on the mixed July weather and “selective discretionary spending”. Barclays said these factors “continued to pose challenges for retailers”.
Four in 10 of those surveyed as part of Barclays’ accompanying consumer research said they spent less due to the poor weather, with July proving the second consecutive month of declining non-essential spending. The proportion of consumers saying they cut discretionary spending – 48% – increased by two percentage points compared with June.
July saw spend in pubs, bars and clubs increase by almost 5% due to Euro 2024, while spending on essential items returned to growth, increasing by 0.6% after declining by 0.9% last month.
Barclays said confidence in the UK economy improved by five percentage points in July, rising to 32%, the highest level since February 2022. However, confidence in household finances decreased by two percentage points to 65% and respondents’ faith in their ability to live within their means declined by three percentage points to 70%.
The report added: “Following news in July that water bills will rise by almost £100 over the next five years, a third of Brits (32%) said they were very concerned about the negative impact that this would have.”
Despite this, Barclays chief UK economist Jack Meaning was upbeat. He said: “While weather, sports events and concerts all look to have resulted in seasonal fluctuations, the bigger picture is that consumers are seeing their incomes and spending power rise and are becoming more confident in the overall economic outlook.
“This, coupled with the fact that the Bank of England has begun to reduce interest rates, should translate into stronger underlying spending growth as we move through the second half of this year and into 2025.”
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Gary Noakes
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