Holiday Bookings Spike Despite Cost of Living Crisis, Reports Nationwide

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Research from Nationwide - the UK building society - finds households are willing to look through a cost of living crisis and spend on foreign holidays in 2023.

Nationwide's Spending Report for January showed spending on non-essential items rose 11% year-on-year amidst increased spending on travel and holidays.

The increase comes despite 70% of respondents saying they are worried about finances and covering essential costs.

Driving the increase in non-essential spending was a boost in demand for airline tickets (+68%) and holidays (+43%).

Nationwide says the annual growth in spending on both categories demonstrates the rising cost of travelling and taking a holiday, accounting for nearly 14% of all non-essential spending.

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According to a separate poll conducted by Nationwide, 39% say they have already booked a holiday either in the UK or abroad for this year.

"It's not all doom and gloom. Despite worries, the nation is preparing for warmer weather and one area of non-essential spending where there has been a significant uptick in January is holidays and travel, as people look to plan ahead and book some time away from home during this year," says Mark Nalder, Payments Strategy & Performance Director at Nationwide Building Society.

Nationwide's poll meanwhile revealed that paying utility bills (energy, water) proved the most worrying essential expenditure for households.

65% of survey respondents reported being worried about these payments, with 33% concerned about credit card repayments.

"People look to start the New Year by reining in their discretionary spending. This is reinforced through our consumer research, which highlights ongoing concerns among consumers about their finances and their ability to cover essential costs at a time when the cost of living remains high," says Nalder.