The first quarter of 2025 revealed cautious optimism for the UK leisure sector. Data from the Deloitte Consumer Tracker shows that total net spending in the leisure sector decreased from -10% in Q4 2024 to -10.8% in Q1 2025. This slight dip is in part due to seasonal trends, as spending typically softens in the first quarter after much socialising in the last three months of the year. 

Out of the 11 leisure categories measured in the survey, seven saw a quarter-on-quarter decline in net spending, with the most significant fall in spending on eating out (-5.1 percentage points) and on drinking in pubs and bars (-3.8 percentage points). The fall in spending on going out to eat and drink is in part seasonal with many consumers cutting back on non-essential spending post-Christmas, but also reflects health-conscious consumers’ new year’s resolutions including reducing alcohol consumption as part of ‘dry January’. Other leisure categories to see a significant drop in spending were in-home leisure activity and drinking in coffee and sandwich shops with both categories falling by -2.6 and -2.2 percentage points, respectively. There were also small quarterly falls in spending in three categories that tend to see higher spending during the Christmas season: culture and entertainment (-0.9 percentage points), betting and gaming (-0.8 percentage points) and other leisure activities (-0.7 percentage points). 

In addition to a post-Christmas seasonal dip, a fall in spending on socialising and leisure activities also points to consumers choosing to reduce some of their discretionary spending to prioritise other categories such as travel and wellness. Our data shows that the categories that saw an increase in spending in Q1 include long and short holidays up by 3 and 1.7 percentage points, respectively.  Categories associated with fitness and health also were up in Q1, including going to the gym or playing sport (+1.8 percentage points) and attending live sports events (+0.2 percentage points). 

Outlook for Q2 2025

With the arrival of warmer weather and multiple bank holidays, our data shows that consumers intend to spend more across all the 11 categories tracked by the survey in Q2 2025 when compared with spending intentions for Q1 2025. The uplift will be particularly encouraging for leisure and hospitality businesses, as our data suggests that consumers intend to spend more on eating out (+9.3 percentage points), drinking in pubs and bars (+9.2 percentage points) and drinking in coffee shops and sandwich shops (+ 5 percentage points) as they plan to socialise with friends and family and enjoy warmer weather. 

The travel sector is poised for a strong rebound in Q2, as evidenced by the increase in intended spending on long and short holidays up by +5.5 percentage points and +5.4 percentage points, respectively. Despite a cautious economic outlook, travel demand is forecast to remain robust in 2025. While businesses are prioritising cost reduction strategies and closely monitoring economic indicators, holidaymakers are showing a sustained appetite for travel, particularly for overseas trips. The latest Deloitte Travel Weekly Annual Insights Report reveals that 59% of UK adults are likely to book an overseas holiday this year, marking the strongest intention to travel since their survey began in 2011. Notably, 53% of these prospective travellers expect to spend more on their holidays than in previous years. As the year unfolds, the travel industry will need to strike a balance between capitalising on the current wave of consumer enthusiasm and making strategic decisions to ensure long-term resilience and profitability. The ability to adapt to changing consumer preferences, optimise operations for efficiency and accurately anticipate market shifts will be crucial for success in this dynamic environment.

With continued strong wage growth and the rate of inflation declining slightly to 2.8% in February, consumers are likely to have more disposable income to set aside for discretionary spending. As a result, we have seen a significant improvement in spending intentions in categories such as in-home leisure activity (+4.3 percentage points), culture and entertainment (+3.8 percentage points), betting and gaming (+2.9 percentage points), other leisure activities (+2.8 percentage points), attending live sports events (+2.1 percentage points) and going to the gym or playing sport (+0.6 percentage points).

Travel, hospitality and leisure businesses stand to benefit from consumers’ renewed enthusiasm for both out-of-home and in-home experiences. To capitalise on the momentum businesses should continue to focus on delivering value-driven but personalised and high-quality offerings that cater to ever evolving consumer preferences.