Pre-election worries may have accounted for the mood of uncertainty picked up by the latest Holiday Confidence Index (HCI) on whether or not to take an overseas holiday this year.
With falls across all six indices that create the overall score, the Spring 2015 HCI, produced by First Rate Exchange Services¹ in association with the University of Wolverhampton’s Business School, the Institute of Travel & Tourism, and YouGov, has dropped two points to 49 compared with the last quarter in 2014 and is one point below the position last spring.
The HCI University team is headed by Peter Robinson, Principal Lecturer and Head of Department for Marketing, Innovation, Leisure and Enterprise (MILE) with analysis of the research data from YouGov undertaken by Ade Oriade senior lecturer in Tourism Management and the report for First Rate is written by Nick Booker, a Visiting Lecturer in MILE.
In the online survey of 5,153 adults, used to collate the HCI, the most notable index fall relates to intentions to travel abroard. This index has dropped two points since last autumn and three points compared with a year ago.
However, the fall has more to do with a rise from 24% to 26% in the number of people who have decided not to travel than it does to the more positive attitudes expressed by those committed to taking an overseas holiday.
Consumers planning overseas holidays – 56% of the survey sample - are far more bullish about the state of the nation’s finances and their own financial position. Almost seven-in-ten are confident of being able to meet their financial obligations and 47% believe their job will be secure for the coming year. Furthermore, a third of them expect general economic improvement compared with only 22% of respondents who do not propose to travel abroad.
This positive level of confidence helps to explain why almost half (49%) of those people who said they plan to travel abroad in the coming year have already booked their first trip and 28% have gone further and booked a second holiday.
Peter Robinson, Head of Department for Marketing, Innovation, Leisure and Enterprise at the University of Wolverhampton said:
“The latest Holiday Confidence Index suggests while there is a mood of caution among those not intending to travel. It is encouraging for businesses in the West Midlands selling into the overseas travel market, that well over half of the consumers surveyed are intending to travel abroad and nearly half of this group have already booked holidays.
“With the election now out of the way, we look forward to see the results of the Summer HCI by which time consumers may feel more confident to plan trips abroad”
The analysis also reveals that independent holiday bookings are level pegging with packages. Two-in-five holidaymakers now take the independent route compared with the same proportion booking some form of package holiday. While this signals a healthy rise in independent bookings, it means that demand for package holidays has dropped.
For the majority of holidaymakers (69%) exchange rates are not a factor when planning an overseas trip. However, once a destination has been chosen there are a significant proportion of holidaymakers (48%) who will want to get a good deal on currency and will purchase before they need it if the rate is favourable.
So, in spite of the significant gains made by sterling against the euro, the latest Holiday Confidence Index reveals a drop in popularity for the eurozone – although it is still destination of choice for almost two-thirds of first holidays booked. This suggests that consumers may be rather slower to switch on to exchange rate movements than might have been expected, especially as there has been a corresponding rise in popularity for trips to North America at precisely the time when sterling has also fallen in value against the US dollar
The Spring 2015 report can be obtained by emailing HolidayConfidenceIndex@firstrate.co.uk
Pictured are Nick Booker (L) and Peter Robinson.
For more information, please contact: Nick Booker on 01926 864 900 or 07802 281168.