Travel spending falls for first time since Covid due to Iran war and cost of living

Consumers in the UK are spending less on travel for the first time in five years, following rising holiday costs and disruption cased by the US-Iran war.

According to new data from Barclays, travel spending dropped for the first time since Covid border restrictions were lifted in March 2021.

Travel spending declined by 3.3 per cent last month, with trips abroad being delayed or swapped for staycations, said the British bank.

The majority of people (70 per cent) cited concerns about rising travel costs amid the cost of living crisis.

Generally, consumer card spending increased 0.9 per cent year-on-year, while non‑essential spending growth slowed to 1.1 per cent in March.

Around 57 per cent of consumers surveyed also had concerns surrounding travel disruption amid tensions in the Middle East, with 11 per cent cancelling intended travel plans.

In March, holidaymakers also spent 4.6 per cent less at travel agents year-on-year, 4.1 per cent less with airlines, and 2.9 per cent less on public transport.

Jack Meaning, chief UK economist at Barclays, said: “Shoppers delaying major purchases and building up a savings buffer in response to the shock from the Middle East reinforces our view that activity will be muted in the coming months.”

The Barclays Consumer Spend research combines millions of customer transactions with consumer research from 2,000 UK respondents between 27 and 31 March.

Karen Johnson, head of retail at Barclays, added: “March’s figures may highlight some differences between how consumers feel and how they actually spend. Cost-of-living concerns and economic uncertainty continue to weigh on confidence, prompting caution and a desire to cut back, but spending remains resilient across several categories, namely clothing, entertainment and digital content & subscriptions.”

Read more: How to save money on your summer travel this year, according to experts