Holiday and flight spending continues to rise despite financial worries

Spending on holidays continued to defy cost of living concerns with a 6% increase last month over July 2022.

Total expenditure on the sector – including hotels, travel agents, package holidays and cruises – rose to almost £393 million, according to latest calculations by Nationwide Building Society.

The total was 3% up on June, with total transactions rising by 6% to 2.5 million.

Spend on air travel was up by a third (33%) over July last year to hit £79.2 million, with a 2% month-on-month increase.

Total transactions on air fares grew by 34% year-on-year to more than 512,000 but remained static over the June level.

The monthly Nationwide spending report showed overall spending rising by 6% year-on-year, with transactions up by 5%.

But research found that more than six in ten (62%) people are worried about their personal finances and ability to cover essential costs, marking the first time it has risen since May. 

This was up from 57% the previous month – the lowest percentage recorded since sentiment started to be tracked at the start of the year.     

Nationwide said: “Money worries have risen for the first time since spring as households continue to grapple with rising household spend.”

The report, based on analysis of more than 242 million debit card, credit card and direct debit transactions, revealed that about £8.90 billion was spent overall in July, including essential and non-essential categories.

Nationwide said: “Airline travel spend continues to see significant increases compared to last year, likely due to more people travelling abroad for their summer holidays.”

Payments strategy and performance director Mark Nalder said: “Households are continuing to feel the pressure financially at a time of year when spending is traditionally higher due to the holiday season. 

“Our data is showing that while the nation is able to keep plates spinning, the ongoing rise of essential and non-essential costs are starting to dampen the national mood, much like the UK summer. Whether this translates into a reining in of spending in the coming months is something we will continue to monitor.

“Significant increases in rent costs, mortgages, insurances and credit card repayments mean households are more focussed on ensuring they have enough to pay the bills that matter most. 

“And with fuel and energy costs down, this is providing a bit of relief at a time of year many will be driving on their holidays and enjoying themselves.” 


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