The cost of living squeeze means fewer people plan to ringfence money for a holiday abroad next year, the UK travel industry warned on Tuesday. Abta's annual travel industry report found almost one in three people plan to spend less on travelling abroad, suggesting the annual holiday is no longer sacrosanct.

Holiday numbers match pre-pandemic peak

The spending warning comes in the same year that holiday-taking climbed back to pre-pandemic levels. According to the report, war, wildfires and EES border checks did not stop Britons from travelling, but rising costs may mean the numbers have peaked.

• •88% of Brits took a holiday this year, matching the 2019 pre-pandemic peak
• •A record 74% holidayed in the UK and 62% went abroad
• •Late bookings and shorter city breaks were an increasing feature of holidays through 2026, even as holiday numbers at home and abroad continued to rise

Confidence dipped but rebounded

Abta's travel confidence index, which measures the net proportion of people who felt secure going abroad versus worried, dipped to +50. The score has rebounded since disruption tied to the Middle East conflict, fuel fears and the EU's entry/exit system.

Research from Abta found confidence in travel dropped slightly year on year but recovered as fears over jet fuel shortages and flight disruption faded since the US-Israel war with Iran began in February. Fewer people now say they are willing to reduce spending on phones or other gadgets than on the holiday abroad.

Tanzer: a tough but resilient year

Abta chief executive Mark Tanzer said it had been a tough year for the travel industry, but that demand has held up well despite a range of challenges and looks set to continue, as does the willingness to prioritise travel spending over other discretionary items.

Speaking at the annual Abta travel convention in Madeira, he said: "It's been a stop-start year but the market did come back in the summer." He noted that people switched holiday plans and booked later, waiting and seeing, perhaps hoping for better deals but also managing uncertainty.

Tanzer said the industry would keep lobbying ministers to reduce aviation taxes and increase help switching to sustainable aviation fuels, supporting an industry contributing £57bn to the UK economy.

Spain extends its lead

Spain increased its dominance of the British outbound market, with visitors up four percentage points to 36%, while Portugal moved up to sixth in popularity. Only 26% said they were planning to visit Spain next year, with Japan and Norway cited in the top 10, though previous surveys show Britons return to Spain despite dreams of somewhere more exotic.

Abta said it would keep pressing ministers on aviation taxes and support for switching to sustainable aviation fuels, while Tanzer warned that the pressures of recent months will persist through the next 18 months.