Demand for travel set to continue as consumers prioritise holiday spending despite cost-of-living pressures14 November 2023
- 46 percent of Europeans have increased their travel budgets compared to pre-pandemic
- 30 per cent say they are holidaying closer to home while 19 per cent are going on fewer, but longer, trips in reaction to climate change
- 38 per cent are reconsidering future holiday making habits as a result of the wildfires in the Mediterranean
A major survey of over 3,050 British and European holidaymakers reveals that 46 per cent of Europeans have increased their travel budgets compared to pre pandemic, despite the ongoing cost of living crisis, according to a new report from leading global professional services firm Alvarez & Marsal (A&M). This rises to nearly half (48 per cent) of UK holidaymakers.
By contrast, only 21 per cent of those surveyed said that their budget had decreased over the last three years (19 per cent in the UK). Of those spending more on holidays compared to 2019, 31 per cent in both Europe and the UK were doing so due to an increased prioritisation of holidays and trips away in spending decisions.
This increased prioritisation comes despite excess savings from the pandemic era having been used up, the survey found that excess pandemic savings was not among the top factors.
The report also looked at the importance of sustainability for consumers in making decisions about travel. While more than half (55 per cent) of respondents said that they are willing to pay more for eco- and sustainability credentials, ESG does not show up in their top five considerations when choosing accommodation.
While intentions to spend more for sustainability credentials aren’t translating into respondents seeking out sustainability-focused accommodation, increasing sustainability awareness is driving behavioural changes elsewhere.
One important trend worth noting is that growing ESG awareness is prompting choices such as staycations. 30 per cent of those polled say they are holidaying closer to home, while 23 per cent are reducing the number of trips and 19 per cent are going on fewer, but longer, trips.
Alvarez & Marsal also found that the increasing intensity of summer wildfires in the Mediterranean are having an impact on European holidaymakers’ getaway plans. 38 per cent of holidaymakers are reconsidering future travel habits as a result of the wildfires in the Mediterranean earlier this year. Of those changing their holiday plans, 31 per cent said they planned to holiday in the same location just at different times of the year.
Ed Bignold, Managing Director at Alvarez & Marsal, said, “Despite tougher economic times, more and more people are prioritizing holidays, indicating that it’s one of the non-negotiables for household budgets, even if savings have dried up. What was initially seen as just a rush to spend pent-up savings post covid has solidified into a sustained behavioural change. This explains why the holiday industry has been so resilient to the wider slowdown in discretionary spending so far this year and suggests that the outlook for the industry is much brighter than perhaps expected.
“Investors and operators should take note of the changing demands of holidaymakers, while they are seemingly not willing to pay more for more ESG credentials, there is evidence to suggest they are changing their behaviour as they become increasingly climate-conscious with holidays closer to home or fewer, but longer, trips.”
A&M also looked at attitudes to holidays in Saudia Arabia, the United Arab Emirates and Qatar, where almost 80 per cent of adults reported putting more money into travel, and nearly half of those said their budgets have increased “considerably.”