19 / Apr
Surge in Travel Spending in the UK and NZ
As travel spending continues to recover in New Zealand and the United Kingdom, consumers are pour more money into domestic and international travel, indicating improving consumer demand for larger purchases.
United Kingdom
According to Barclay data, travel sector spending grew by 6.9% in the UK within 2024. Holiday makers spent an average £1,117, with significant uplifts seen in travel agent bookings (7.9%) and airline tickets (7.5%).[1]
The key driver isleisure travel and visits to family abroad, while business travel is still proving slow to catc up. However, the sector faces challenges from fuel price volatility and capacity issues, which have led to delays and disruptions, particularly during peak summer seasons. [2]
Airlines in the UK have been upgrading their service offerings in a bid to attract consumers. At the start of 2024, British Airways announced a £7 billion transformation project, which should complete by then end of 2025.
This will include a new website, mobile app, free onboard social media messaging and a short haul seat refit, and operational technology upgrades (including AI and machine learning) to help flights depart on time. [3] In comparison, Ryanair has chosen to focus on promote their on cost reduction, and their ability to offer ultra-low cost fares to passengers. [4]
New Zealand
Kiwis have also recovered their passion for travel, as they embrace both local adventures and overseas trips. According to Stats NZ, annual spending per-persion on domestic travel nearly doubled to $505.80 from 2019-2023. [5] With international travel costs persistently high, Kiwis are favouring local experiences, presenting tourism businesses with exciting opportunities to innovate and cater to this growing demand.
Demand for overseas travel continues to climb, and Stats NZ noted that the New Zealand-resident traveller arrivals for the year to September were 2.96 million, with an increase of 480,000 from the previous year. This is around 15% lower than the 2019 average, so there is still some recovery to be made on outbound international travel. [6]
Distance and cost are still making it hard for New Zealand to attract internatonal arrivals, which are still down around 15% from pre-pandemic levels, while air travel to New Zealsnd is now more than 40% more expensive than in 2019 [7]
In 2024, Air New Zealand has increased its capacity by introducing new aircraft into its fleet, which has resulted in an 11% increase in passenger revenue for the year. [7] The airline has had a heavy focus on sustainability in 2024, with their net zero carbon emissions by 2050 program in full swing, driving passengers who value sustainability highly to travel with them. [8] Although Air New Zealand had stated that they expected their overall passenger revenue for the year to be higher, this was offset due to increased competition. [9]
Like the UK with Ryan Air, New Zealand also faces low-cost airline competition in the form of Jetstar. Although Jetstar is an Australian airline, they operate domestically and internationally within New Zealand and are Air NZ’s biggest competitor within the domestic market. The competiton is boosting accessibility and affordability, driving increased travel within New Zealand and offering a variety of options for both domestic and international travellers.
Increased travel spending in the UK and New Zealand presents a prime opportunity for marketers and airlines to tap into a growing market. Understanding this shift going into 2025 allows businesses to tailor their offerings, enhance consumer experiences and meet this rising demand. With more consumers prioritising travel, airlines can focus on optimising their services to get ahead of competitors, while marketers can craft targeted campaigns that resonate with eager travellers, driving both loyalty and revenue within the travel industry.
Make sure to check out the other Top Consumer Trends in 2025 for New Zealand and the United Kingdom.
[1] Barclays reveals 2024’s top 10 consumer spending trends, Barclays, December 2024
[2] The longer term impacts of the Covid-19 pandemic on transport and land use in Britian, Independent Transport Commission UK, March 2024
[3] British Airways unveils new website and app as part of its £7bn transformation plan, British Airways, March 2024
https://mediacentre.britishairways.com/pressrelease/details/19166
[4] Growth Strategy and future prospects of Ryan Air, CBM, December 2024
https://canvasbusinessmodel.com/blogs/growth-strategy/ryanair-growth-strategy
[5] Changes in household expenditure see domestic travel take off, StatsNZ, March 2024
https://www.stats.govt.nz/news/changes-in-household-expenditure-see-domestic-travel-take-off/
[6] International Travel September 2024, StatsNZ, November 2024
[7] Why are flights so expensive and will they get cheaper? Newstalk ZB, May 2024
[7] Air New Zealand announces 2024 annual results and declares final dividend, Air New Zealand, August 2024
[8] Sustainability, Air New Zealand, 2024
https://www.airnewzealand.co.nz/sustainability
[9] Air New Zealand announces 2024 annual results and declares final dividend, Air New Zealand, August 2024
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