Irish consumers "do not plan to go wild" in their holiday spending in 2021, with one in four planning to spend roughly the same that they did in 2020, pointing to a "solid rather than spectacular" season for domestic tourism, according to a survey by KBC Bank Ireland.
The bank asked about holiday plans in a question added to its consumer sentiment index in May, and found 19 per cent of people plan to cut back on holiday spending this year, slightly more than the 12 per cent who said they were cutting their outlay last year.
Some 11 per cent of consumers plan to increase their spending on holidays this year, the survey found, reflecting “likely major differences” in individual circumstances.
Some 54 per cent of Irish consumers now plan to have a summer holiday in 2021, while a further 12 per cent have yet to make up their minds.
But some 19 per cent said they were unable to afford a holiday this year, which KBC Bank Ireland chief economist Austin Hughes noted was broadly consistent with the 22.4 per cent Covid-adjusted unemployment for May and captured "a cohort facing significant financial uncertainty at present".
A further 15 per cent said they would not go on holiday for other reasons, which mostly related to Covid-19 concerns.
Some 12 per cent of the 1,000 people questioned by Core Research on behalf of KBC mentioned the pandemic and related health worries as the reason they would not take a holiday this year.
‘Fluid situation’
“Some portion of these responses may reflect uncertainty about the extent and timing of any easing of foreign travel restrictions or a more general difficulty in assessing what is a fluid situation in terms of the pace at which a more general normalisation of tourism, both domestic and international, may occur,” Mr Hughes said.
Holiday plans were strongly related to financial circumstances, with 32 per cent of those who report they are making ends meet with difficulty saying they could not afford a holiday compared to only 5 per cent who class themselves as comfortable. Affordability constraints were most pronounced in the 45-54 and 35-44 age groups.
Irish consumer confidence rose to a 23-month high in the May consumer sentiment index, driven in large part by optimism relating to the reopening of the economy.
Mr Hughes said despite this brighter outlook a “significant element of caution” persisted, and that holidays remained out of reach for a “substantial number”.
