A well-known North East business leader has played down reports of a downturn in the UK economy after strong sales in recent weeks.
Dame Irene Hays, owner and chair of Sunderland’s Hays Travel, said the national travel chain had seen a big surge in business at the end of 2024 and the first few days of this year, with people willing to spend more on their holidays than in previous years. Her comments came on Radio 4’s Today programme after research was published by the British Chambers of Commerce which said that business confidence has slumped since the Budget.
A survey of more than 4,800 firms found that 55% of them expect prices to increase in the next three months, up from 39% in a similar poll in the second half of 2024. The research comes after Labour announced an increase in taxes related to employing people in the October Budget.
But questioned on falling confidence in her market, Dame Irene said: “I don’t see less confidence in the sector, in fact. I know it’s early days in January, but we were up in 2024 by 18.4% and just looking at the early start we’ve had to January, we’re up by 22%. So there’s general confidence in the sector.
“There’s an acknowledgement that there are additional payments to be made in terms of National Insurance and National Living Wage but we’ve been around for 45 years now and we’ve managed the business through lots of different administrations. All we do is understand the rules of the game and try to play it better than anyone else.”
Dame Irene said that Hays was seeing a small increase in average spend by each customer, with popular destinations in the Mediterranean, Egypt and the US. She said increasing disposable income meant people were prioritising holidays, with many choosing all-inclusive trips and longer-haul destinations.
Hays Travel saw profits increase 43% in its most recent accounts, while the company made two significant acquisitions last year to expand its operations. The company published accounts in October for the year ended April 30, 2024 showing total transaction value rise 17% to £2.5bn, while turnover was £457m, an increase of 8%. Group pre-tax profits increased 43% to top £73m and operating profit rose 31% to £60.4m.
Labour has made boosting the economy its main priority since winning the election last summer. But official data showed the economy had zero growth between July and September, and that it contracted during October. The British Chambers of Commerce’s director-general, Shevaun Haviland, called the situation “a pressure cooker of rising costs and taxes”.