market outlook Travel’s recovery exceeded all expectations
the squeeze on disposable incomes is weaker than previously forecast. Having said that, even the weaker squeeze would be the biggest since the 1950s.” He explained: “Higher tax receipts
as a result of inflation meant the government had some additional headroom for spending and it spent that on a significant cut to taxes for business and undoing some of the rises in income tax planned for future years. But despite the rhetoric on tax cuts, the UK will continue to run a much bigger state than before the pandemic. “We forecast a modest recession
a year ago, but what seems to have materialised was a far milder ‘technical’ recession in the second half of 2023. The labour market proved more resilient than expected, supporting jobs, wage growth and demand. “We’re going to see a slow start to the
year. The impact of interest rate rises lags significantly, but we’re seeing some of that feed through. We expect growth to be flat in the first quarter and turn positive after spring, picking up in the second half of the year as price pressures ease further and rates begin to move downwards. “That is broadly a positive outcome
given inflation peaked above 11% and interest rates have risen from 0.1%
FIGURE 8: UK CONSUMER CONFIDENCE % point difference between ‘confident’/‘not confident’
-100 -80 -60 -40 -20 0
-9 -9
-18 -16 -28
-55 -61 -71 -82 -88
Q3 Q4 2019
Q1 2020
Confidence overall In disposable income In UK economy
Q2 Q3
Q4 Q1 2021
Q2
Q3 Q4 Q1 2022
Q2 Q3 Q4 Q1 2023 Q2 Q3 -73 -73 -83 -80 -18 -17 -16 -17 -27 -16 -18 -17 -11 -9 -10 -12 -38 -45 -53 -49 -55 -54
-47 -45 -56
-76
-10 -21
-11 -17 -19 -20 -26 -40 -35 -58 -67 -20 -18 -16 -14
Source: Deloitte Consumer Tracker
UK CONSUMER confidence has been lower but could not be described as strong
(Figure 8). Our Insight consumer survey suggests an increase in holidaymakers planning shorter breaks (Figure 9). Yet
demand and spending intentions remain strong (Figures 10 & 11), although living costs and
climate concerns could influence behaviour (Figures 12 & 13)
to 5.25%, without the financial or economic stress usual with monetary tightening. In the medium term, a lot will depend on how stubborn underlying inflationary pressures prove to be. Persistent pricing strength will mean higher rates dampen growth for longer.” De said: “Our central forecast has
inflation continuing to fall this year, albeit at a slower pace. Underlying price pressures – core inflation or
% of UK adults planning a holiday abroad in 2024
1-3 nights: 13%
Don’t know 3%
+2 -1
4-6 nights: 24%
+7 -2 -1
15+ nights: 6%
-4
14 nights: 11%
10 Travel Weekly Insight Report 2024
8-13 nights: 14%
% point change YoY
7 nights: 29%
FIGURE 9: DURATION OF NEXT OVERSEAS HOLIDAY By age, child status
%
10 20 30 40 50 60 70
0 62% 54% 37% 40% 53% 56% 48%49% 37% 27% 20% Excludes ‘don’t knows’.
Base: UK adults likely to take an overseas
All 16-24 25-34 35-44 45-54 55+ Child
holiday in 2024. Source: Service Science/Kantar
47%47%
1-6 nights 7-14 nights
65%
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