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Deloitte Holiday Spend Tracker Forecasts Positive Outlook

Net consumer spending on holidays rose in the second quarter of the year and is forecast to return to the positive as it increases further over the summer.

However, suggestions of summer over capacity and a lower number of bookings is flagged up in a report earlier this week.

A holiday spend index went up by three points to -1% from -4% in the second quarter of 2013, according to the latest Deloitte Consumer Tracker.

Similarly, net spending on short breaks and eating out rose five points from -13% to -8%.

Consumers plan to spend more on holidays over the next three months with net spending expected to rise to +1% from -6% for the same period last year.

People also expect their net spending on short breaks and eating out to rise over the current quarter to -8%, up from -16% over the same time last year.

Graham Pickett, head of travel, hospitality and leisure at Deloitte, said: “Low inflation, or in some cases deflation, means that consumers should be getting better value for their money.

“Combined with the rising confidence in household disposable income, consumers are edging away from the defensive spending habits they adopted during the recessionary years and spending more on the things they enjoy.

“Since we started the Tracker in 2011, holidays have consistently been one of the big ticket expenses consumers have been reluctant to cut back on. Many people view their annual holiday as a necessity and we are on the verge of consumers actively spending more on their holidays.

“However, whilst consumers have every intention in taking their holiday, we are noting concerns from the aviation and travel industry about softening prices, particularly this summer, caused largely by over capacity issues and a very much lower than expected number of bookings in the second quarter of the year.

“It appears consumers are delaying their booking decision with the expectation of picking up a late summer holiday bargain.”

The report shows UK consumer confidence in the second quarter being four points higher than the same period a year ago – from -10 to -6 – while sentiment about disposable income was up 11 points from -29 to -18.

The Tracker also shows more consumers started a job in the three month period and fewer reported a loss or reduction of income.

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