Table of Contents
Executive Summary
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- The market
- Brits’ overseas spending forecast to reach £54 billion in 2024
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- Figure 1: Forecast for total annual expenditure on overseas trips by UK residents, fan chart, 2014-24
- Europe is the top destination for overseas spending
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- Figure 2: Annual expenditure on overseas trips by UK residents, by region of visit, 2010-19*
- Supermarkets, Post Office and specialists lead the market
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- Figure 3: Travel money arrangements, November 2019
- Rates neared record lows in August 2019
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- Figure 4: Spot exchange rates, monthly average, US Dollar-Sterling and euro-Sterling, January 2010-January 2020
- Companies and brands
- Travelex cyberattack highlights online vulnerabilities
- New card launches and greater customer protection
- Retailers benefit from heritage and associations with other categories
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- Figure 5: Attitudes towards and usage of selected brands, January 2020
- The consumer
- Cash is king in holiday spending
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- Figure 6: Methods used to spend money on holiday abroad, November 2019
- Debit cards are more commonly used for small amounts
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- Figure 7: Amount of money spent on most recent holiday abroad, by spending method, November 2019
- Seven in 10 arranged travel money in the two weeks before departure
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- Figure 8: Timing of most expensive transaction to arrange travel money, November 2019
- Concerns over local infrastructure keep cash in favour …
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- Figure 9: Prompts to choose cash or card to spend money on holiday abroad, November 2019
- … while cash is also seen as best for sticking to a budget
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- Figure 10: Attitudes towards travel money, November 2019
- What we think
Issues and Insights
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- Digital banks are key challengers, but they still have work to do
- The facts
- The implications
- Currency fluctuations could influence post-Brexit destination choices
- The facts
- The implications
- Changing travel trends offer travel money opportunities and challenges
- The facts
- The implications
The Market – What You Need to Know
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- Brits’ overseas spending forecast to reach £54 billion in 2024
- Europe is the top destination for overseas spending
- Supermarkets, Post Office and specialists lead the market
- Brexit uncertainty and historic-low rates dampen growth in holiday volumes
Market Size and Forecast
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- Overseas spending estimated to have reached £47.6 billion in 2019 …
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- Figure 11: Total annual expenditure on overseas trips by UK residents, 2010-19*
- …and forecast to rise to £54 billion by 2024
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- Figure 12: Forecast for total annual expenditure on overseas trips by UK residents, fan chart, 2014-24
- Figure 13: Forecast for total annual expenditure on overseas trips by UK residents, at current and constant prices, 2014-24
- Holidays account for 72% of total overseas spend
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- Figure 14: Annual expenditure on overseas trips by UK residents, by purpose of visit, 2010-19*
- Expenditure on holidays abroad forecast to reach £42 billion by 2024
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- Figure 15: Forecast for total annual expenditure on overseas holidays by UK residents, fan chart, 2014-24
- Figure 16: Forecast for total annual expenditure on overseas holidays by UK residents, at current and constant prices, 2014-24
- Forecast methodology
Market Segmentation
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- Europe accounts for two thirds of overseas expenditure
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- Figure 17: Annual expenditure on overseas trips by UK residents, by region of visit, 2010-19*
Channels to Market
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- The vast majority arranged travel money prior to departure
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- Figure 18: Travel money arrangements, November 2019
- Supermarkets, Post Office and currency specialists are equally popular
Market Drivers
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- Brits made 72 million overseas trips in 2019
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- Figure 19: Number of overseas trips by UK residents, by purpose of visit, 2015-19*
- Four fifths of trips were to Europe
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- Figure 20: Number of overseas trips by UK residents, by destination, 2015-19*
- Rates neared record lows in August 2019
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- Figure 21: Spot exchange rates, monthly average, US Dollar-Sterling and euro-Sterling, January 2010-January 2020
- Holiday booking activity remains high
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- Figure 22: Booked holidays in the last three months and intentions to book a holiday in the next three months, January 2015-December 2019
- Brexit will change travel conditions to destinations in the EU
Companies and Brands – What You Need to Know
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- Travelex cyberattack highlights online vulnerabilities
- New card launches and greater customer protection
- Retailers benefit from heritage and associations with other categories
Competitive Strategies and Recent News
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- Travelex cyberattack highlights online vulnerabilities
- Eurochange rebranding as NM Money
- Above-the-line advertising plays a limited role in travel money
- Thomas Cook travel money cards to close in April
- New cards
- bunq
- Post Office
- Currensea
- WeSwap hits £250 million milestone and launches partnership with Jet2
- Mastercard blocks Dynamic Currency Conversion on prepaid cards
- Police crackdown on money laundering at bureaux de change
Brand Research
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- Brand map
- Retail brands attract greater levels of trust
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- Figure 23: Attitudes towards and usage of selected brands, January 2020
- Key brand metrics
- Half are aware of major currency specialists
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- Figure 24: Key metrics for selected brands, January 2020
- Brand attitudes: Post Office and M&S Bank lead on all metrics
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- Figure 25: Attitudes, by brand, January 2020
- Brand personality: Revolut is the most fun brand
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- Figure 26: Brand personality – macro image, January 2020
- Post Office’s reliability, helpfulness and competence are important for holidaymakers
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- Figure 27: Brand personality – micro image, January 2020
- Brand analysis
- Post Office and M&S Bank reap the benefits of a trusted brand with heritage
- Travelex and Eurochange: competent and reliable specialists
- Revolut and Starling Bank: distinct brands ready to push on
The Consumer – What You Need to Know
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- Cash is king in holiday spending
- Debit cards are more commonly used for small amounts
- Seven in 10 arranged travel money in the two weeks before departure
- Concerns over local infrastructure keep cash in favour …
- … while cash is also seen as best for sticking to a budget
Methods of Spending Abroad
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- Cash dominates holidaymakers’ overseas payments
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- Figure 28: Methods used to spend money on holiday abroad, November 2019
- Clear generational differences
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- Figure 29: Selected methods used to spend money on holiday abroad, by generation, November 2019
- Most travellers used more than one payment method on their last trip
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- Figure 30: Number of methods used to arrange travel money for most recent holiday abroad, November 2019
Value of Spending Money
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- Debit cards tend to be used for smaller amounts
- Credit cards lend themselves to higher value purchases
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- Figure 31: Amount of money spent on most recent holiday abroad, by spending method, November 2019
Timing of Arranging Travel Money
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- Seven in 10 arranged travel money in the two weeks before departure
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- Figure 32: Timing of most expensive transaction to arrange travel money, November 2019
- Under-35s are more likely to leave it to the last minute
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- Figure 33: Timing of most expensive transaction to arrange travel money, by age, November 2019
Influence of Holiday Types on Travel Money
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- Concerns over local infrastructure keep cash in favour …
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- Figure 34: Prompts to choose cash or card to spend money on holiday abroad, November 2019
- … while the rise of alternative accommodation could fuel card use
- Younger consumers more likely to be influenced by holiday type
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- Figure 35: Consumers responding “Neither” or “Don’t know” to prompts to choose cash or card to spend money on holiday abroad, by age, November 2019
- Previous use of methods is also a factor
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- Figure 36: Prompts to choose cash or card to spend money on holiday abroad, by methods used to spend money on holiday abroad, November 2019
Attitudes towards Travel Money
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- Half are worried about not being able to use their card abroad
- Overcoming fears about card acceptance
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- Figure 37: Attitudes towards travel money, November 2019
- Urban parents with young children are most sensitive to rates
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- Figure 38: Attitudes towards travel money, CHAID analysis, November 2019
- Security is less of an issue than might be expected
- Challenging the budgeting power of cash is a route to card use growth
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
- Methodology
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- Figure 39: Travel Money – CHAID – Table output, November 2019
Appendix – Market Size and Forecast
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- Market forecast best/worst case outcomes
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- Figure 40: Best and worst case forecasts for total annual expenditure on overseas trips by UK residents, 2019-24
- Figure 41: Best and worst case forecasts for total annual expenditure on overseas holidays by UK residents, 2019-24
- Forecast methodology
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