Card transaction data shows spending on travel rose 4.7% year-on-year during the four weeks between 20 April and 17 May, making it the third-highest spend growth area after digital content and subscription and ’other’ travel services. 

The overall growth in all consumer spending was just 1% – the smallest rise reported since February 2021. The industry felt the pinch of rising household bills as travel agent and airline spending growth was down compared to the previous month.

Travel agent spend grew by 4.3% in the four weeks to 17 May and airline spend was up 5.6%. Spend growth with travel agents in May dropped to its lowest level since August last year, while flight spend saw its lowest uplift since July 2021.

Transaction growth also dipped in both sectors compared to the previous month’s analysis, with travel agents reporting a 11.5% uplift (compared to a 14.4% rise in April). Airlines saw a 5.4% rise in transactions according to the latest figures.

Despite what looked to be a challenging month for consumer spend, Barclays maintained a positive outlook as inflation rates fell to their lowest in almost three years, easing consumers’ worries and giving them the confidence needed to increase discretionary spending throughout the summer.

Chief economist Jack Meaning said: “The economic strength we saw in the first three months of the year was always expected to ease as we moved into the second quarter, with GDP having seen the extra bounce needed to recover the ground lost in last year’s recession. 

“The underlying direction of travel remains though, with falling inflation, real income growth and low unemployment all pointing to a gradual acceleration in consumer spending over the next 12 months, especially as we begin to see the Bank of England reduce interest rates in H2.”