Fewer Britons plan to ringfence money for holidays abroad next year, says travel industry

The UK’s cost of living squeeze means fewer people plan to ringfence money for holidays abroad next year, the travel industry has warned.

Despite war, wildfires and EES border checks, the numbers of Britons taking holidays climbed back to pre-pandemic levels this year – but rising costs may mean the numbers have peaked, according to an annual travel industry report on Tuesday.

Numbers taking holidays at home and abroad continued to rise, although late bookings and shorter city breaks have been an increasing feature of holidays through 2026.

Confidence in travel dropped slightly year on year but rebounded as fears over jet fuel shortages and flight disruption faded since the start of the US-Israel war with Iran in February, according to research from the industry body Abta.

Overall, 88% of Brits took a holiday this year, matching the 2019 pre-pandemic peak, with a new high of 74% in the UK and 62% abroad.

However, Abta’s report found that almost one in three people were planning to spend less on travelling abroad next year, suggesting that the annual holiday is no longer sacrosanct. Fewer people now say they are willing to reduce spending on phones or other gadgets than the holiday abroad.

Abta said the holiday business remained resilient, despite a dip in its travel confidence index to +50 – this measures the net proportion of people who felt secure in going abroad, compared with those who were worried. But it said that score had rebounded since disruption from the Middle East conflict and fears about fuel availability and the EU’s entry/exit system (EES).

The Abta chief executive, Mark Tanzer, said it had been a tough year for the travel industry. But he added: “Demand has held up well despite a range of challenges this year, and that looks set to continue, as does the willingness to prioritise spending on travel over other discretionary items.”

Speaking at the annual Abta travel convention in Madeira, Tanzer added: “It’s been a stop-start year but the market did come back in the summer.

“We saw people switching their holiday plans and booking later, waiting and seeing – maybe hoping for better deals but also managing the uncertainty.”

He said the industry would continue to lobby ministers hard to reduce aviation taxes and increase help in the switch to sustainable aviation fuels, to help cut costs and support an industry that contributed £57bn to the UK economy.

Tanzer said the investment in tourism continued but he admitted: “The pressures of the last few months are not going to go away in the next 18 months.”

Spain increased its dominance of the British outbound market. The number who said they visited Spain was up four percentage points to 36%, while Portugal moved up to sixth in popularity for holidays.

Polling next year’s travel intentions, only 26% said they were planning to visit Spain, with places such as Japan and Norway cited in the top 10. However, previous surveys have underlined that, despite dreams of somewhere more exotic, Britons head resolutely back to Spain.