ABTA Warns UK Cost of Living Squeeze Threatens Outbound Travel Intentions

UK Holiday Demand Holds Near Pre-Pandemic Peak Despite Cost Pressures

Eighty-eight percent of Britons took a holiday this year, matching the 2019 pre-pandemic peak, according to an annual travel industry report released on Tuesday by the industry body Abta. The total comprised a new high of 74% taking domestic UK trips and 62% heading abroad. Despite challenges including war, wildfires, and entry checks, overall holiday numbers climbed back to historical levels, The Guardian reported. Abta’s travel confidence index dropped slightly year-on-year to +50, measuring the net proportion of people feeling secure in going abroad compared to those who were worried.

Financial Squeeze Threatens Outbound Travel Intentions

Almost one in three people plan to spend less on travelling abroad next year, according to Abta’s findings. This shift suggests that taking an annual foreign holiday is no longer sacrosanct for UK households facing cost-of-living pressures. Fewer people are now willing to reduce spending on phones or other gadgets than on an international holiday. Abta chief executive Mark Tanzer noted at the annual travel convention in Madeira that while demand has held up, the pressures of recent months will persist over the next 18 months.

Shifting Booking Patterns and Destinational Preferences

Late bookings and shorter city breaks became an increasing feature of travel throughout 2026, as holidaymakers managed economic uncertainty. Spain increased its dominance of the British outbound market, with visitors up four percentage points to 36%, while Portugal moved up to sixth in popularity. When polling next year’s travel intentions, only 26% of respondents named Spain, alongside destinations like Japan and Norway in the top 10. Separately, TTG Media reported that nearly four in 10 respondents (38%) booked with a travel professional for holidays taken between August 2025 and July 2026, marking a four percentage point increase year-on-year.

Industry Challenges and Economic Contributions

The travel sector faced continuous disruption over the past year, ranging from the US-Israel conflict with Iran in February to jet fuel supply shifts and Europe’s new Entry/Exit System (EES). Mark Tanzer described the period as an interesting and challenging stop-start year, noting that climate-related events like wildfires also affected travel plans. Despite these hurdles, the organized travel sector contributes £57bn annually to the UK economy. Tanzer urged the government in his convention remarks not to add further costs in the forthcoming Budget, including additional air tax increases, while calling for more help in transitioning to sustainable aviation fuels.

Frequently Asked Questions

Why are more travellers booking with travel professionals?

According to TTG Media and Travel Gossip reports on Abta’s Holiday Habits findings, travellers turn to organized travel and travel agents during periods of disruption to secure package protections and good value. The data showed the proportion of 25-34-year-olds booking with travel professionals increased by five percentage points to 39%, while 18-24-year-olds saw a six percentage point rise to 35% for trips taken between August 2025 and July 2026.

How did geopolitical conflicts impact UK travel patterns?

The US-Israel conflict with Iran in February created initial disruptions to travel alongside ripple effects on jet fuel availability and pricing. Travel Gossip reported that these factors changed how people travel to and through the Middle East, contributing to a temporary dip in Abta’s travel confidence index before scores rebounded.

What economic contribution does the UK travel industry make?

Abta figures show that the organized travel sector contributes £57bn annually to the UK economy. Industry leaders have used this economic footprint to lobby ministers for reduced aviation taxes and increased support for sustainable aviation fuels.