'Stage set for real spending growth' as travel tops consumers' priorities
James ChappleGrowth in consumer spending with travel agents slowed a little in October despite an overall uptick in spending on travel, which consumers have ranked as their number one discretionary spending priority.
In its latest consumer spent report, issued on Tuesday (5 November), Barclays revealed spending with travel agents grew by 7.8% year-on-year in October, down from growth of 9.2% in September. Barclays suggested this was an indication holidaymakers may be taking "a more hands-on approach to travel next year".
Agents nonetheless saw spending growth outstrip travel as a whole, which increased by 6.7% in October having been held back by lower growth in spending on public transport (+1%). This compares with growth of 7% in September. Growth in spend was strongest with the airline sector, which went up by 9.3% in October.
The trade also saw a marked year-on-year increase in transactions in October, which went up by 16.5% – the highest increase of any of the sectors monitored by Barclays for the second month in succession after September’s 14.6% year-on-year spike.
Barclays’ accompanying research, a survey of 2,000 UK consumers by Opinium Research carried out over 18-22 October, saw travel come out on top in a ranking of discretionary spending priorities, chosen by 22% of respondents. Nearly three in 10 said they had already booked a 2025 getaway, while almost a quarter (23%) said they had booked early to save money. Around a third (31%) said they would be visiting a destination for the first time.
There were notable rebounds in spending growth in October for the entertainment sector (+13.5%), digital content and subscriptions (+9.7%) and general retail (+5.2%). Fuel spend was among the hardest hit, with growth down by 15.1% in October), followed by motoring (-5.2%) and household (-3.6%).
Barclays charted a 2.2% decrease in spending growth on essentials, and a 2.1% increase in spending growth on non-essentials. The latest spending report covered the period from 21 September 2024 to 18 October 2024 and compares with the period from 23 September 2023 to 20 October 2023.
Head of retail Karen Johnson said the latest spending data suggested consumers were prioritising their interests and passions, such as for live music, nights in streaming content and shopping online. "We’ll be keeping a close on whether consumer confidence holds in November and in the run up to Christmas," she added.
Barclays’ chief UK economist Jack Meaning added: "With price pressures continuing to ease and tentative signs consumer confidence is improving following what appears to have been a post-election dip, we think the stage is set for real spend growth as we move through the final quarter of the year and look ahead to 2025."
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