The bank's latest Consumer Spend report, covering August, charted a 4.4% year-on-year increase in spend with travel agents, and a huge 17.9% uptick in transaction growth – outstripping all other sectors monitored by Barclays.
However, more than half of consumers (54%) told Barclays they are opting for off-peak holidays in 2025, rising to more than two-thirds (71%) among Gen Z travellers. Of those travelling off-peak, 38% prefer the shoulder season, while one-in-three are booking trips during quieter times to save money.
Figures for airlines showed a mixed picture with spend up by 2.1% but transactions down by 4.5%. Barclays said consumers were using AI tools to help cut costs. It found 27% were using tools such as ChatGPT to plan holidays.
The report added: “Among this group, the top uses are creating itineraries (35%), researching and choosing destinations (32%) and translation (30%), while 27% are finding and comparing prices, discounts and deals with these tools.”
Overall, the bank found consumer card spending grew by just 0.5% year-on-year in August, down from 1.4% in July and lower than the latest inflation rate of 4.2%. The report also concluded confidence in the strength of the UK economy improved by six percentage points month-on-month in August, rising to 28%.
One in five respondents to Barclays' accompanying research said the Bank of England base rate reduction had eased personal finance concerns.
Budget uncertainty a worry
Karen Johnson, Barclays' head of retail, said: “Encouragingly, confidence in household finances remained steady in August, suggesting that while the cost of living is still front of mind, consumers are learning to navigate the challenges and make the most of their budgets.”
However, the bank warned of unease ahead of the Budget on 26 November. Barclays chief economist Jack Meaning said: “It is great to see consumer confidence improve in August, and households feel the benefit of another Bank of England rate cut.
"However, the outlook for the rest of the year remains subdued, particularly as Budget speculation is likely to add to uncertainty for both households and businesses. In our view, it will take further interest rate cuts to provide the economy with a sustained boost.”
Barclays’ report follows an upbeat take from the Advantage Travel Partnership, which said sales were “thriving” despite consumers' concerns about their finances. Advantage said agent sales were up by 12% year-on-year so far.
In addition, a Barclays report in June – 10 Years of Spend – found the value of travel purchases had grown consistently since 2021, with spend and volume increasing despite economic shocks.
