The UK Travel Sector has enjoyed excellent growth in Q2 2015 at the third highest rate the industry has seen in six years according to the latest IMRG Capgemini e-Retail Index. This is coupled with Barclaycard spend reports showing travel expenditure was up 8.4% for Q2 against 2014, with hotels growing by 6.9% and flights improving 4.1% for the same period. Travellers are also staying for longer with stays rising by 10.8% for January to March 2015 versus last year and on holiday expenditure increasing to £6.8 billion according to the ONS.
Introduction and Sector Overview
Like other sectors the travel industry was dominated by speculation about the effect of the EU Referendum in the run up to the vote in June. The subsequent decision to leave had an immediate impact on the industry with sterling dropping in value and the likes of Thomas Cook, EasyJet, On the Beach and Tui Group all suffering slumps in their share prices after the result. Prior to the result some UK travellers had sought to pre-empt the impact by panic-buying foreign currency in anticipation of an exit decision and many exchange retailers saw a spike in sales because of this. While the dramatic fall in the value of sterling against foreign currencies is expected to slow demand for holidays abroad this summer, inbound tourism from other countries (which was already strong) is expected to rise with the weak pound offering visitors to the UK better value for money. Many travel comparison sites are already reporting huge surges in holiday searches for the UK from global traffic.