Spending in the UK leisure sector remained largely resilient in the first quarter of 2017, although there are signs that consumers may start to rein in their purchasing of other leisure activities, according to findings from the Leisure Consumer Q1 2017 report by Deloitte.
The quarterly survey of 3,000 UK adults found that net spending on gym use and playing sport increased by two percentage points from Q4 2016, driven by fitness concerns that are typical for the post-Christmas months. Similarly, holiday net spending also increased as consumers sought to overcome the ‘January blues’. Long-haul holiday spending rose by four percentage points, while short-haul increased by five percentage points in Q1 from the previous quarter.
However, consumers curbed their spending on certain discretionary, habitual leisure activities in the first three months of 2017. Not only was there a quarterly decrease in net spending on eating out in restaurants (-3 percentage points), but coffee shops and pubs also experienced a reduction in net spending, decreasing by three and two percentage points respectively. In-home leisure, which includes film, TV and music streaming and video gaming, also saw a fall in net spending, decreasing by four percentage points from Q4 2016.
Simon Oaten, partner for hospitality and leisure at Deloitte, comments: “The focus on health and wellbeing is as expected for the start of the year, with spending falling for eating out and rising for gym and sport-related leisure activities. Overall, consumers are continuing to prioritise holidays, which is why spending has increased for both long and short-haul trips.
“The long-term change in consumer behaviour, whereby consumers have favoured spending on experiences over goods, was a key reason for the leisure sector’s continued resilience throughout 2016.
“However, with inflation rising, a weak pound and a slowdown in nominal wage growth, leisure consumers are starting to feel their pockets tighten, leading to a fall in spending on some habitual activities and small luxuries, such as buying the daily coffee. Whilst this has yet to result in an actual reduction of overall leisure spending, this trend will be monitored closely. The overall health of the sector will be an important economic indicator in the months to come.”
Millennials to prioritise dining out as older consumers pack their bags
According to the research, consumers aged 18-34 years old are seemingly cutting back their spending on certain leisure activities in order to protect their disposable income for going out. Compared to Q1 2016, spending intentions over the next three months have fallen for in-home leisure (-8 percentage points) and going to the gym (-7 percentage points). At the same time, millennial consumers reported a seven percentage point year-on-year rise in expected spending on pubs and bars, and a four percentage rise in net spending eating out in restaurants.
Over the next three months, consumers aged 35-54, who are most likely to have dependent families, expect their holiday spending to be markedly lower than last year for both long-haul (-7 percentage points) and short-haul holidays (-8 percentage points). Conversely older consumers (aged 55+) are expecting to increase their spending on holidays over the next three months, with long-haul holiday spending up five percentage points from last year.
Oaten added: “The habitual and prioritised nature of leisure spending continues to prevail, and for younger consumers, that means going out and socialising over some food and drinks. Millennials are favouring experience-led leisure activities and in doing so are challenging the perception that young people stay at home glued to their screens.
“Consumers with families, who may be feeling a squeeze on incomes, are showing signs of cutting back and have said that they are less likely to spend on holidays in Q2 2017. Older consumers are apparently less affected by the economic headwinds, and so are continuing to prioritise spending on holidays over the next three months.”
For additional information or to view “Passion for leisure - A view of the UK leisure consumer – Q1 2017” click on the link https://goo.gl/OUiZVe.
About the research
Deloitte’s Leisure Consumer Q1 2017 research aims to provide a view point on the key drivers of the UK leisure market, how consumer behaviour is changing and the impact the growth of the leisure sector is having on the broader economy. Spending figures are based on a consumer survey carried out by independent market research agency, YouGov, on Deloitte’s behalf. This survey was conducted online with a nationally representative sample of over 3,000 UK adults aged 18+ between 17 and 20 March 2017.