Spending growth at travel agents hits lowest level since last August

Growth in card spending in travel agencies fell back during a “challenging” May compared to the previous month, but still outstripped most other sectors.

Barclays data out today (Tuesday) shows spend at agencies up by 4.3% in May against 7.1% the previous two months.

This came despite transition levels remaining high with growth of 11.5%

Barclays described travel, one of the UK’s typically more resilient sectors, as having had a “challenging” month.    

“Airlines saw their smallest uplift (5.6%) since July 2021, while spend growth at travel agents was as its lowest level (4.3%) since August 2023,” the bank said.

Hotels, resorts and accommodation suffered a second monthly drop in spend by 0.5% following their first decline of 0.7% the previous month since May 2023.  

People also reined in spending on takeaways and fast food last month, as 44% say they are reducing their discretionary spending, citing ordering takeaways (54%) as their number one cutback.

More than half (53%) of these consumers are also cutting back on eating out at restaurants, with spending in this category seeing an even greater decline in May than in April.

Barclays head of retail Karen Johnson said: “Retailers faced a challenging May, yet the few sunnier days in the month did bring a welcome uptick in footfall. 

“As consumers gear up to spend more with better weather, and with the Euros, Wimbledon, and Taylor Swift’s ‘Eras Tour’ on the horizon, there’s a brighter outlook for the coming months.”

The bank’s chief UK economist Jack Meaning added: ”The economic strength we saw in the first three months of the year was always expected to ease as we moved into the second quarter, with GDP having seen the extra bounce needed to recover the ground lost in last year’s recession. 

“The underlying direction of travel remains though, with falling inflation, real income growth and low unemployment all pointing to a gradual acceleration in consumer spending over the next 12 months, especially as we begin to see the Bank of England reduce interest rates in H2.”

Go to Source...