The continued impacts of the cost-of-living crisis have seen consumers change their travel plans for the end of 2024. While a third of customers are spending less on holidays to cope with decreased household incomes, many are also plumping for cheaper trips to domestic locations.

While inflation has slowed in the UK, its impact over the last three years has not diminished. With the cost of living having rapidly outpaced wages, the average UK household saw a £2,300 collapse in income by 2023 – and with inflation having unexpectedly risen to 2.3% in the 12 months to October 2024, there has been little room for recovery on that front.

As a result, the UK economy’s projected growth has narrowed to 0.9%, as low consumer spending persists. This has also been reflected in the spending levels on holidays and recreational travel, going into the back-end of the year.

Source: Simon-Kucher

A new study from Simon-Kucher has surveyed over 7,200 consumers across France, Germany, Italy, Spain, the Netherlands, UAE, UK, and US – and has found that leisure spending growth has slowed across the board. In particular, Italy and France stand out, with shrinking spending of -0.8% and -1.7% respectively.

However, the UK was also below a global average of 1% growth – with British leisure spending rising by a mere 0.7% – far behind similar inflationary environments such as the US on 2.5%, and Spain on 2.9%.

Asked what factors were driving changes to their travel spending, those who were spending still chiefly cited price increases, rather than looking to boost the quality of their experience. UK respondents led here, with around 54% saying inflation had seen their budget rise. At the same time, of the consumers spending less, 30% of UK respondents said it was also because of inflation. With the UK’s total increase in leisure spending still being so low, despite that significant gap between those figures, it suggests that more UK residents are scaking back their plans than are simply looking to approach holidays as business as usual.

Bron: Simon-Kucher

This might also explain why the UK market bucks another average, when it comes to choosing more close-by desinations. To reduce travel expenses, the global average sees 25% of respondents, but that rises to 27% in the case of UK consumers – seven points higher than Italy and six higher than the Netherlands.

Speaking on the findings, Dimitris Hiotis, senior partner at Simon-Kucher, said, “Despite economic headwinds, travel remains a top priority. Consumers are adapting their spending habits while focusing on meaningful experiences and sustainability. The industry continues to evolve, presenting opportunities for those ready to innovate.”