Fewer British holidaymakers are setting aside money for overseas trips next year, the travel industry has cautioned, as the cost of living crisis threatens to dampen demand that had recovered to pre-pandemic levels.
An annual report from the industry body Abta, released on Tuesday, found that while 88% of Britons took a holiday in the past 12 months—matching the 2019 pre-pandemic peak—nearly one in three people plan to reduce spending on international travel in the coming year. This shift suggests that the annual holiday abroad is losing its status as a protected expense, with fewer people now willing to cut back on phones and other gadgets instead.
The findings come despite geopolitical tensions, wildfires, and new EU border checks that have disrupted travel patterns throughout 2026. Holiday numbers at home and abroad have continued climbing, though late bookings and shorter city breaks have become increasingly common as travellers seek better value.
What is driving the pullback in holiday spending?
Cost of living pressures are the primary factor behind reduced travel budgets. According to Abta's research, 52% of those planning to spend less on travel cited the cost of living as their reason. The survey, which covered 2,082 UK adults interviewed from 21 July to 6 August, found that respondents took an average of 3.9 holidays in the previous 12 months, yet uncertainty about future spending remains high.
Confidence in travel dropped slightly year on year, though it rebounded as concerns over jet fuel shortages and flight disruption eased following the start of the US-Israel conflict with Iran in February. Abta's travel confidence index stood at +50, measuring the net proportion of people who felt secure travelling abroad compared with those worried about doing so.
How are Britons changing their booking behaviour?
Travellers are increasingly delaying their bookings and waiting to see if better deals emerge, according to Abta chief executive Mark Tanzer. Speaking at the annual Abta travel convention in Madeira, he described 2026 as a
stop-start year but the market did come back in the summer, with
people switching their holiday plans and booking later, waiting and seeing – maybe hoping for better deals but also managing the uncertainty.
A significant shift is occurring in how people book holidays. According to Abta's latest findings, 38% of overseas holidaymakers now book through a travel professional, up from 34% the previous year, with 63% booking a package holiday, an increase of two percentage points. Value for money has become a key driver, cited by 44% as a reason to use a travel professional, up five percentage points from the prior year.
Which destinations are leading the market?
Spain has strengthened its grip on the British outbound market, with 36% of respondents saying they visited the country in the past year, up from 32%. However, future intentions reveal a different picture: only 26% said they plan to visit Spain in the next 12 months, with Japan and Norway appearing in the top 10 of aspirational destinations. Portugal has climbed to sixth place in popularity for holidays.
This gap between dream destinations and actual bookings reflects a pattern Abta has observed before: despite fantasies of more exotic locations, British travellers consistently return to Spain. The shift in stated preferences may indicate growing interest in alternative destinations, though historical booking patterns suggest Spain will likely maintain its dominance.
What challenges does the industry face ahead?
Tanzer acknowledged that
the pressures of the last few months are not going to go away in the next 18 months, warning that the industry must navigate ongoing economic headwinds. He called on the government to reduce aviation taxes and increase support for the switch to sustainable aviation fuels to help cut costs and bolster an industry that contributed £57bn to the UK economy.
The travel sector's resilience has been tested throughout 2026. Earlier in the year, early-summer holiday bookings declined amid Middle East war concerns and new EU border checks, while major operators reported significant drops in summer holiday sales. Despite these headwinds, Tanzer maintained that
demand has held up well despite a range of challenges this year, and that looks set to continue, as does the willingness to prioritise spending on travel over other discretionary items.
Abta noted that the UK outbound travel industry supports approximately 865,000 jobs and contributed 9.6% more to the economy in 2026 than it did in 2019, demonstrating the sector's importance to the broader economy despite current pressures.
Key Facts
- 88% of Britons took a holiday in the past year, matching 2019 pre-pandemic levels, with 74% taking UK holidays and 62% travelling abroad
- Nearly one in three people plan to reduce spending on overseas travel next year, with cost of living cited by 52% as the primary reason
- Spain remains the most visited destination at 36%, though only 26% plan to visit next year, suggesting potential shifts to alternative locations
- 38% of overseas holidaymakers now book through travel professionals, up from 34%, with value for money cited as a key factor
- The UK travel industry contributes £57bn annually to the economy and supports around 865,000 jobs
