Britons Plan to Spend Less on Overseas Holidays in 2027

Fewer people in Britain plan to set aside money for holidays abroad next year as the cost-of-living squeeze puts pressure on household budgets, according to an annual report from travel industry body Abta. Although holiday demand recovered to pre-pandemic levels in 2026, rising costs could limit further growth in international travel.

The report found that late bookings, shorter city breaks and changing travel plans became increasingly common this year as holidaymakers waited for better deals and tried to manage uncertainty. Despite challenges including geopolitical conflict, wildfires and new European Union border checks, travel remained a priority for many British households.

Rising Costs Put Pressure on Holiday Budgets

Almost one in three Britons said they planned to spend less on overseas travel next year, highlighting the growing pressure on holiday budgets. Abta’s findings suggest that some households are reconsidering how much they can afford to spend on international trips as everyday living expenses remain a concern.

The report also indicated that people were becoming less willing to cut spending on mobile phones and other gadgets to protect their holiday budgets. This suggests that overseas holidays, while still important to many consumers, may face greater competition from other household spending priorities.

Nevertheless, the travel industry has shown resilience. Abta said demand remained relatively strong despite a difficult year, with many people continuing to prioritise travel over other discretionary purchases.

Holiday Participation Returns to Pre-Pandemic Levels

Overall, 88% of Britons took a holiday in 2026, matching the previous peak recorded in 2019 before the COVID-19 pandemic. The proportion holidaying within the UK reached a new high of 74%, while 62% travelled abroad.

However, the recovery in holiday participation has coincided with changes in booking behaviour. Travellers increasingly booked later in the year, with some delaying decisions in the hope of securing better prices or waiting for uncertainty surrounding travel conditions to ease.

Mark Tanzer, Abta’s chief executive, said the industry had experienced a challenging year but that demand had held up despite the difficulties.

“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.”

Speaking at Abta’s annual travel convention in Madeira, Tanzer described the year as stop-start, noting that the market recovered during the summer. He said holidaymakers had adjusted their plans and delayed bookings while assessing the situation and looking for potentially better deals.

Travel Confidence Recovers After Earlier Disruptions

Confidence in travelling abroad declined slightly compared with the previous year, but it recovered as concerns about potential jet fuel shortages and flight disruption eased.

According to Abta, its travel confidence index stood at +50. The measure reflects the balance between people who feel confident about travelling abroad and those who are worried about doing so.

Travel concerns had increased amid disruption associated with the US-Israel war with Iran, which began in February, as well as fears about fuel availability and the European Union’s Entry/Exit System (EES). The border system introduced additional uncertainty for some travellers, while geopolitical developments raised concerns about possible disruption to flights.

Abta said confidence had since rebounded as some of those concerns diminished. However, the organisation warned that the financial pressures affecting consumers and the wider travel sector were unlikely to disappear in the near term.

Spain Strengthens Its Position as Britain’s Favourite Destination

Spain remained the leading overseas destination for British holidaymakers, increasing its share of the outbound travel market. The proportion of respondents who said they had visited Spain rose by four percentage points to 36%.

Portugal also gained ground, moving up to sixth place among the most popular holiday destinations. The findings underline the continued appeal of established European destinations for British travellers seeking familiar holiday options.

When asked about their travel plans for next year, 26% of respondents said they intended to visit Spain. Japan and Norway also featured among the top 10 destinations people were considering.

However, Abta’s findings indicate a difference between the destinations people hope to visit and the places they ultimately choose. Although travellers may express interest in more distant or unusual locations, previous surveys have shown that many Britons return to Spain for their holidays.

Travel Industry Calls for Government Support

Tanzer said the travel sector would continue pressing the UK government to reduce aviation taxes and provide greater assistance with the transition to sustainable aviation fuels. The industry believes such measures could help control costs and support investment in more sustainable air travel.

The UK Travel industry contributes approximately £57 billion to the national economy, according to Tanzer, making the sector an important part of the country’s wider economic activity.

Although investment in tourism has continued, Tanzer warned that the pressures experienced in recent months would remain a challenge for the industry over the next 18 months.

Outlook for Overseas Travel in 2027

The Abta report points to a travel market that remains resilient but is facing growing affordability concerns. High holiday participation rates show that travel continues to be important to British consumers, while the increasing number of people planning to reduce overseas travel spending suggests that household budgets could constrain demand.

Later bookings and greater price sensitivity may continue to shape holiday decisions as travellers balance their desire to take trips against the Cost of Living. For travel companies, maintaining demand could depend on offering competitive prices while responding to changing consumer expectations.

Abta’s findings suggest that overseas holidays remain a priority for many Britons, but rising costs may make travellers more selective about where they go, when they book and how much they spend in 2027.