Summer travel bookings lift UK consumer spending

·3 min read
Travel agents and airlines saw significant improvements compared to last month’s contractions, Barclaycard said. Photo: Tejas Sandhu/SOPA Images/LightRocket via Getty Images
Travel agents and airlines saw significant improvements compared to last month’s contractions, Barclaycard said. Photo: Tejas Sandhu/SOPA Images/LightRocket via Getty

UK card spending grew last month as summer holiday bookings boosted the travel sector to its best month since the onset of the coronavirus pandemic.

New figures from Barclaycard found consumer card spending grew 18.1% in April compared to the same period in 2019, the highest uplift since October 2021.

According to the data, spending on hotels, resorts and accommodation rose 16.6% compared to three years ago, the category’s highest growth since September last year.

Travel agents and airlines saw significant improvements, declining just -3.5% and -9.9% respectively, compared to last month’s contractions of -10.7% and -12%.

"The improvements seen by airlines and travel agents are particularly positive, and hopefully point to a recovery in spending on international travel later this year," said José Carvalho, head of consumer products at Barclaycard.

However, experts warn inflation and rising living costs are starting to impact the retail and hospitality industries, with a number of categories seeing smaller uplifts.

"The impact of rising living costs on consumer spending is starting to show, with a number of categories — including subscriptions, takeaways, and bars, pubs & clubs — seeing less growth than in March as Brits begin to feel the pinch," he added.

Read more: UK retail sales slump in April as soaring prices dampen spending

Spending on essential items increased 17.4% from 18.1% in March. This was largely due to spend on fuel falling from a record 26.1% increase in March to 23% in April.

Barclaycard said this could be a possible sign that consumers are reducing car usage in a bid to save money.

Shopping at supermarkets and food and drink specialist stores grew 15.9% and 76% respectively compared to the same period three years ago. This is compared to 16.9% and 76.9% in March.

Over half (52%) of shoppers said they were cutting down on luxuries, while 47% said they are buying budget or own brand goods over branded items, and 38% are using vouchers or loyalty points to obtain discounts.

The proportion of respondents feeling concerned about the impact of higher household bills on their finances remained high at 90%.

Average spending on utilities per customer jumped 28.8% year-on-year as cost increases continued to hamper consumer confidence, with optimism about the future of the UK economy falling slightly from 27% in March to 25% in April.

This comes as 21% of Brits say they are making social or holiday plans for the long weekend in June to mark the Queen’s Platinum Jubilee, with 16% of this group opting for a staycation in the UK.

Read more: Cost of living squeeze hits 900,000 more households

"While concerns around rising household bills may continue to hamper spending on non-essential items, the upcoming Platinum Jubilee Weekend and summer months should provide opportunities for Brits to spend on celebrations and make the most of warmer weather," Carvalho added.

Despite the challenging economic backdrop, spending on non-essential items grew 18.4% compared to the same period in 2019, a small uplift from from 17.5% the month prior.

Clothing spending saw a 12.6% uplift, higher than March’s 10.1%, department stores returned to growth (1.3%) after seven months of decline, and pharmacy, health, and beauty stores improved to 20.2% in April versus 18.8% the month before.

Watch: The risks of buying now and paying later

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