Tourism Alliance
The future of domestic tourism (Part 2)
L
ast time I wrote about how the
more careful with your discretionary
only real growth segment in
expenditure and you cannot roll
domestic tourism over the last 10
up your debt into the mortgage
years has been with people aged
in order to continue spending.
55+ and that the youth market (those
But there is an even greater problem.
aged 18-35) has been decreasing due
If you own a home, you aim to pay
■■Kurt janson is the director
to increasing student loans and young
off your mortgage by the time that
of the Tourism alliance
people having to save more to buy a
you retire. This means that a large
house than any previous generation.
proportion of the pension savings
This time I’m going to explain
that you accrue through your working
why the decreasing ability of young
career are available for discretionary
people to buy a house could have a
purchases such as holidays when you
dramatic impact on domestic tourism
retire. However, if you rent, then a large
in the future. First, a few figures. A
percentage of your pension savings
recently released ONs housing report
will be needed to continue paying your
shows that only half of people in their
rent when you retire, meaning that you
mid-30s to mid-40s had a mortgage
have very little left for discretionary
in 2017 compared with more than
expenditure in your retirement
two-thirds in the late 1990s. Instead,
and will take far fewer holidays.
people in this age group were three
so, unless we can reverse recent
times more likely to rent their home
trends in home ownership by removing
in 2017 compared with 20 years ago.
student loans or building more
Perfect storm The combination of high student debt,
Unless we can reverse recent trends in home ownership, the future of the domestic tourism industry could be considerably worse than it is today
affordable houses, the future of the domestic tourism industry could be considerably worse than it is today. ●
high house prices and wage stagnation means that an increasing number of young people are becoming renters for life rather than home owners. This will result in two considerable problems for the domestic tourism industry. First there is the issue of how consumer spending works differently depending on whether you own a home or not. If you own a property you are generally paying less for your mortgage than if you rented a comparable property – so you have greater discretionary spend. You also have the ability, if you spend too much on your credit card, to add that debt to your mortgage and keep on spending. If you are renting, you do not have this option so you have to be Issue 783
©Cybertrek Ltd 2020
■UK ■ tourism hot spots could see a decline in the number of domestic visitors in future
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