Cost of Living Crisis and Changing Habits of Holidaying

By Kunal Sawhney, CEO of Kalkine (www.kalkine.co.uk)

Holidays or leisure travel are part of our life to rejuvenate and experience new things. Everybody at some point in time or rather on a frequent basis, needs a break from their usual routine, and holidays become a great way to get away from it, viz-a-viz providing an opportunity to spend quality time with the family and loved ones.

When the country is going through record-high inflation and households are struggling with the cost of living crisis, the one sector that is going to be most impacted is the holiday industry. It’s a fact that holidays do not tend to come cheap and are a matter of major expense for many even in the normal economic scenario, but now as the prices of everything are surging every day, people are controlling their essential expenses, not to talk about non-discretionary costs like travel and tourism.

What does the latest data suggest?
There is a fear of recession, and a growing number of people are concerned about the future, which has led to a major change in their spending habits. The latest survey report from Scottish Widows, a financial company helping people plan for their financial futures, stated that around 81 per cent of adults are concerned about making ends meet, while 76 per cent must take some action to cope with the financial pressures.

The most striking revelation from the survey was that almost 35 per cent of Britishers are planning to cut back on non-essential leisure activities and holiday spending, while nearly 24 per cent have already started using their savings for the future.

However, the situation had changed in just over a month, when the soaring cost of living had put a brake on different kinds of spending; April had marked the strongest month for foreign travel spending since the onset of the pandemic. Ease in Covid restrictions prompted people for international holidays. Airlines and travel agents had the best month, while accommodation at hotels and resorts witnessed a surge of around 17 per cent compared to the same month of 2019. Till 2019, there has been a constant rise in spending on foreign holiday visits by residents of the United Kingdom, which fell down to one-fifth in 2021 due to pandemic-induced restrictions as compared to the previous year.

A possible way out for a holiday trip despite the price rise
There are several factors that decide the holiday cost, and with inflation at its peak, the usual budget may not be sufficient to meet the average holiday cost. But there are several ways through which you can keep the cost of holidays within limit. First thing, before you embark on a holiday destination, get travel insurance and that too after comparing for the best and most appropriate ones. The next thing is looking for the best deal, which could help bring down the actual cost of a holiday trip. One must look for different hotel stay options and seek the best deal on offer as many hotels considering the prevalent conditions, are offering various lucrative options. Airlines and transport operators’ selection can also help in saving costs, depending on the destinations and offers they provide.

Leisure and spending quality time are important, so even if it comes at a cost, it should not let you defer your enjoyment. Paying for the holiday with a loan or any other form of credit is not a good idea, but if you have decided to go on a holiday, instead of spending in one go, monthly repayments will be a better idea to meet the expenses rather than the full one-off cost, here too some saving can be done in selecting the holiday loan providers for the best deal.