46 per cent of Europeans have increased their travel budgets despite cost-of-living pressures, a report from Alvarez & Marsal has revealed.
The survey of over 3,050 holiday makers found that that 46 per cent of Europeans have increased their travel budgets compared to pre pandemic, with the number rising to 48 per cent for UK holidaymakers. By contrast, only 21 per cent of those surveyed said that their budget had decreased over the last three years, with this number standing at 19 per cent in the UK.
Separately, while 55 per cent of respondents said they are willing to pay more for eco and sustainability credentials, ESG does not show up in their top five considerations when choosing accommodation. However, 30 per cent of those polled say they are holidaying closer to home, 23 per cent are reducing the number of trips taken, and 19 per cent are going on fewer but longer trips. Additionally, 38 per cent of holidaymakers are reconsidering future travel habits as a result of the wildfires in the Mediterranean earlier this year.
Why it matters
Despite popular belief that consumers’ discretionary spending will soon reduce and level out as pandemic-era savings dry up, it seems holidaymakers have continued to place increased priority on leisure holidays, apparently not being affected by the cost-of-living crisis. While this seems like a positive for the hospitality/hotel sector, it may have far-reaching consequences as figures show consumers are making more and more credit purchases.
What they said
Ed Bignold, managing director at Alvarez & Marsal said: “Despite tougher economic times, more and more people are prioritising 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.”