UK spend on holidays ‘set to hit £41bn’ this year
- As the travel sector enters the busy summer trading period, the research reveals demand for hassle-free holidays remains strong
- Analysis shows continued demand for travel as package holiday spending reaches 94% of pre-pandemic levels, despite the cost-of-living crisis
- 1 in 10 UK holiday goers (10%) said they pay for their travel with BNPL or instalment options, rising to nearly 1 in 5 (18%) among millennials
- Demand is set to remain high as online searches for package holiday deals increased 31% month-on-month between May and June 2023
Edinburgh, Monday 10th July 2023: BR-DGE, the leading payment orchestration provider, has today revealed new research showing the strong demand for package holidays among UK consumers, despite a turbulent economic backdrop.
Post-pandemic recovery remains strong
An analysis of data from the Office for National Statistics by BR-DGE calculates that UK consumers are set to spend £40.9bn this year on package holidays both at home and abroad.1 This is 94% of pre-pandemic levels in 2019 when Brits spent a total of £43.5bn on package breaks, highlighting the continued recovery for the travel sector following the pandemic.
In June 2023, UK online searches for package holiday deals increased by 31% month-on-month, showing travel demand growing ahead of the busy summer trading period.2 Friday 9th June was the most popular day for package holiday searches during June, as UK temperatures hit 30C and the UK Health Security Agency issued an extreme weather warning.
Majority of Brits to spend over £1k on travel this year
A new survey of over 1,200 consumers, conducted on behalf of BR-DGE, highlights how this trend is set to continue with two-thirds (65%) of UK holiday goers reporting that they spend over £1,000 a year on travel holidays.3 More than a fifth (21%) of those who purchase travel use their credit and debit cards for transactions. Amid the cost-of-living crisis, more consumers are turning to alternative payment options to fund getaways and travel. 1 in 10 UK holiday goers (10%) said that they are paying for their travel and holidays with BNPL or instalment options, rising to nearly 1 in 5 (18%) among millennials. 42% of respondents said that they would be open to using alternative payment methods such as Buy Now Pay Later in order to buy holidays in the future.
Emily Whalley, Travel Specialist at BR-DGE, commented: “The UK travel industry is reaching a tipping point as travel demand is soon set to bounce back to pre-pandemic levels. Travel firms are seeing positive momentum as consumer demand for hassle-free holidays remains robust, despite disposable incomes being hit by the increased cost-of-living. We continue to see holiday goers looking for value and flexibility, seeking out discounts and deals for quick getaways and greater personalisation at the checkout via new payment methods.
“This data further shows the value of creating bespoke payment workflows and checkout experiences that align with different consumer habits so that holiday goers are supported throughout the customer journey. For travel providers, this highlights the importance of delivering an end-to-end frictionless customer experience in order to drive loyalty, protect margins, and deliver a first-class holiday for all.
Payment challenges persist for travel firms
With figures showing consumers are eager to go on holiday this year, airlines and online travel agents (OTAs) are under increasing pressure to meet demand for their services, especially during peak periods and school holidays. Fragmented payments systems across the travel sector, put under increasing pressure by the massive growth in digital payments, present a considerable challenge to airlines and travel agents. As a result of this, 13.4% of consumer payment transactions across the travel sector fail. Whilst most UK consumers will contact airlines and agents directly via phone following failed transactions, this complex process erodes travel providers’ profit margins and creates friction across the customer experience.
Through dynamic routing and connections to the entire payments ecosystem, BR-DGE’s platform reduces failed payments, builds personalisation into the customer journey, and supports the evolving payment needs of travel providers and their customers. Payment orchestration via BR-DGE empowers merchants with the ability to test, trial, track, and choose payment workflows which align with the purchasing behaviours of different consumers. BR-DGE has worked with partners, including Kenwood Travel and Travel Counsellors, to enhance the payment journey of customers, ensuring that they receive a frictionless end-to-end experience and greater choice through a range of alternative payment methods.
-ENDS-
Notes to Editors
1 By analysing the Office for National Statistics “Family spending in the UK” report series, BR-DGE has been able to calculate the total yearly UK consumer spending on domestic and international package holiday. Using forward predictions and payment industry data from Barclaycard, BR-DGE has been able to predict total spending on package holidays for 2023.
2 Analysis of Google Trends data for UK searches of “package holiday deals” in 2023
3 This was a survey of 1,252 UK adults, conducted by ImpactSense on behalf of BR-DGE.
Press contacts
George Rogers / George.Rogers@mhpgroup.com / 07954 241105