Economy

Double-digit spending growth for hotels in August

Hotels, restaurants and pubs all saw double-digit spending growth in August, as consumer spending reached a 13-month high.

According to the latest figures from Barclaycard, total consumer spending was up 4.2% compared with the same month last year, up from the 2.6% increase recorded in July.

Travel spend grew 3.2% to a three-month high, driven by a 14.9% increase in hotel spend – the categories highest year-on-year increase in 24 months.

The spending on hotels, which includes overseas hotels, is believed to be, in part, because consumers remained “firmly” committed to overseas travel plans made earlier in the year and therefore had to pay the rising cost of overseas accommodation in line with the depreciation of the pound.

Meanwhile, warmer weather encouraged consumers to spend more on leisure time in the sun, with both restaurants and pubs reporting spending increases of 12.7% and 13.3%, respectively.

Despite the rise in spending, Barclaycard said caution still lingers for many consumers. Only 58% of consumers expressed confidence in their household finances, significantly lower than the average of 71% recorded in 2015.

The report said long-term forecasts for rising prices and subdued wage growth may be responsible, as just four in 10 (38%) consumers said they are confident in the UK economy.

Paul Lockstone, managing director at Barclaycard, said: “Consumer spending has continued to grow after the EU referendum, with August being a particular stand-out month considering confidence in household finances remains low compared to levels seen last year.

“Spending peaks in travel and hotels indicate that most consumers were firmly committed to their summer plans, and spent on trips and excursions they booked months in advance.

“Yet confidence continues to be shaky as the wider economic picture remains uncertain, suggesting it’s too soon to tell if this lift in spending will last once everyone’s holiday tans have faded.”

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