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Selling holidays will still be a challenge, warns Deloitte
The job of selling holidays will continue to be "challenging" despite signs of a recovery in consumer confidence.
A report released today by Deloitte found that although the improving economy should help push up real incomes this year, consumers will still buy as though they are in the recession.
"Despite the emergence of signs of a recovery in the consumer economy, the job of selling to them will continue to be challenging as the ‘considered’ buying behaviours developed during the recession are here to stay," said Graham Pickett, Deloitte’s head of travel, hospitality and leisure.
But he said selective consumers will also be trading down in some areas in order to trade up in other areas, including holidays.
Deloitte’s study found consumer confidence suffered a dip last quarter for the first time in 12 months.
The net balance of sentiment fell slightly lower to minus 11% in October-December, compared to minus 8% in the previous three months.
But, said Deloitte, falling inflation has helped reduce downward pressure on discretionary spending despite no real income increase.
This means net spending on holidays year-on-year has stabilised at minus 8%, slightly up from minus 9% in quarter 2012.
Similarly, net spending on short breaks and eating out rose two points from minus 11% in the fourth quarter of 2012 to minus 9% in 2013.
"We think the dip in consumer confidence is a setback rather than a longer-term, underlying decline. Consumer sentiment is higher than it was a year ago and an accelerating economy and lower inflation should bolster consumer incomes in 2014," said Pickett.
During the first quarter of 2014, consumers plan to spend more on holidays with the net spending expected to rise to minus 4% (from minus 8% in Q1 2013).
Similarly, consumers anticipate their net spending on short breaks and eating out will rise from minus 22% from minus 19%.
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Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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