A release of lockdown savings built up by UK households over the past 12 months is set to lead to an increase of more than £50bn in consumer spending this year, with a majority of consumers planning to spend more on travel.
According to a study by financial mutual Scottish Friendly and the Centre for Economics and Business Research (CEBR), nearly half (46%) of Brits have seen their cash savings increase over the past year and collectively they are estimated to be holding an extra £192bn.
The research found that households plan to spend more than a quarter (26%) – £50bn in total – of their lockdown savings over the course of 2021.
Scottish Friendly and CEBR studied 50 years’ worth of household’s saving data and interviewed 4,000 UK adults as part of their study. Over a third (34%) of those who plan to spend more money this year say their cash will go towards travel and accommodation for overseas holidays.
Meanwhile, 29% of Brits with extra savings from the last year plan to spend more on domestic holidays in 2021. This is in-line with recent research released by Flywire, which found that over 70% of leisure travellers plan to spend at the same levels or higher when travel opens up again following the COVID-19 enforced lockdowns.
The government’s Eat Out to Help Out scheme helped to boost retail spending last year, but irrespective of whether this initiative is reintroduced, 28% of people anticipate increasing their spending in restaurants and cafes this year.
In contrast, less than one in five (19%) said they had pent-up demand to increase spending in pubs and bars.
Maria Hamilton, Account Director: “The confidence of the UK population in the ability to take domestic trips is definitely rising. We are seeing trends that indicate that direct bookings are growing, and lead times are polarised, so it is important to man the phones and ensure you have updated all your booking channels to make it as easy as possible for your guests to book. People are looking for longer stays, too, so it is worth reviewing packages for 3, 5 and 7 day stays to capitalise on this trend.”
As specialists in hospitality marketing and PR, we have extensive experience in deciphering and adapting marketing strategies to changing consumer behaviours. To find out more about how we can support you in engaging with your target audience and increasing your market position, please contact a member of our team.