Rise in ‘spending on experiences’ linked to increase in consumer confidence

Staycations and Home Improvements See Surge in Spending During Early May Bank Holiday

Recent data from Mastercard has highlighted a significant increase in consumer spending on staycations and home improvements over the Early May Bank Holiday weekend compared to the same period last year. This surge in spending indicates a shift towards investing in experiences and home enhancements.

According to SpendingPulse data, there was a notable uplift in spending on lodging across the UK, with popular holiday destinations like Dorset, Cornwall, and Devon experiencing year-over-year increases of 29%, 24%, and 13% respectively. Additionally, restaurant spending saw a 5.6% increase compared to the previous year, especially in areas where lodging spending was higher.

In London, spending on lodging rose by 11% year-over-year, with restaurant spend also showing a slight increase of 1.5%. This spending boost may have been driven by overseas visitors, as indicated by Mastercard’s Travel Trends 2024 report highlighting that a significant portion of tourism spending in the UK is on experiences.

Moreover, many people chose to use the bank holiday weekend to focus on home improvements, with a 3% overall rise in home improvement spending and a 10% increase in spending on home furniture and furnishings. Notable hotspots for spring makeovers included Devon with a 25% increase in spending on home furnishings and Cornwall with a 17% increase.

Natalia Lechmanova, Chief Economist Europe at Mastercard Economics Institute, commented on the trend, stating that as the weather warms up, people are taking advantage of the extra time off to explore different parts of the UK, dine out at restaurants, and refresh their homes ahead of summer. She noted a shift towards spending on experiences over material possessions, driven by increasing consumer confidence and purchasing power.

Overall, the rise in spending on staycations and home improvements during the Early May Bank Holiday reflects a positive trend towards experiential spending and suggests a boost in economic activity not only in the UK but also across Europe.