Table of Contents
Issues in the Market
-
- Mintel asks…
- Market definitions
- Abbreviations
Insights and Opportunities
-
- Adjust to changing customer behaviours
- Maximise prepaid potential
- Challenge assumptions
- Scope to develop the ‘travel-specific’ credit card market
Market in Brief
-
- Overseas spending in 2007 up by a quarter on 2003
- Factors behind the growth
- Will this trend continue?
- Leading brands active in the foreign currency market
- Product innovation: prepaid cards
- Plastic card usage
- What sources of travel money do people tend to use?
-
- Figure 1: Source(s) of travel money typically used when abroad, February 2008
- Buying behaviour
- Attitudes towards plastic versus cash and cheques
- People’s travel plans for 2008
Fast Forward Trends
-
- Trend 1: One world harmony
- Growth in immigration
- Mobile money transfer for migrant workers
- The future is mobile
- Trend 2: Instant gratification
- Time-poor, cash-rich
- Counter trend
- Save for holiday spending
Broader Market Environment
-
- Key points
- Technology opens up new sales channels
- Demand for travel underpinned by a wealthier older market
- Economic slowdown could lead to a downturn in holiday sales
- Spending growth set to slow rapidly
-
- Figure 2: UK population aged 16+, total PDI and consumer expenditure, at constant 2003 prices, 2003-12
Internal Market Environment
-
- Key points
- Brits take growing number of overseas trips
-
- Figure 3: Number of overseas visits by UK residents, by purpose of visit, 2000-07
- Most foreign trips are to other European countries
-
- Figure 4: Number of overseas visits by UK residents, by region of visit, 2003-07
- Other travel trends
- Growth in holiday homes abroad
-
- Figure 5: Number of English households with a second home abroad (three-year moving averages), 1997/98- 2007/08
- Spain and France are the top destinations for a holiday home abroad
-
- Figure 6: Country of second home, 2003/04-2005/06 (average)
- The adoption of the euro
- Pound weakens as the economy wilts
-
- Figure 7: Sterling to euro and US dollar exchange rates, December 2003-March 2008
Competitive Context
-
- Key points
- Most people like to take foreign currency with them when they go abroad
-
- Figure 8: Source(s) of travel money typically used when abroad by UK visitors overseas in the past year, February 2008
- Declining demand for travellers cheques
- Raising the profile of prepaid cards via targeted marketing
- Size of the travel money target market
-
- Figure 9: Estimated size of the travel money customer base, February 2008
- Price comparison: debit cards versus prepaid cards
-
- Figure 10: Cost of using debit cards and prepaid travel cards abroad, by selected card issuers, April 2008
- Credit card charges
- Key facts about debit and credit card ownership and usage
- Using a debit card abroad is becoming more popular
-
- Figure 11: Volume of debit, credit and charge card transactions outside the UK, 2000-06
- Overseas credit card protection strengthened
- Overseas debit card transactions grow strongly in value
-
- Figure 12: Value of debit, credit and charge card transactions outside the UK, 2000-06
Strengths and Weaknesses in the Market
-
- A more difficult trading environment ahead
-
- Figure 13: UK travel money market: Strengths, weaknesses, opportunities and threats, April 2008
Who’s Innovating?
-
- Key points
- Prepaid cards offer an alternative to travellers cheques
- Card comparison
-
- Figure 14: Price comparison of prepaid travel cards, by selected issuers, April 2008
Trade Perspective
-
- About the respondents
- From paper to plastic
- Prepaid becoming progressively more popular
- Public pressure could bring down overseas card fees
- What will be the impact of a weak pound to euro?
- Customers look for convenience above all
Market Size and Forecast
-
- Key points
- Overseas spending outpaces inflation
-
- Figure 15: Annual spending abroad by UK residents, at current and constant prices, 2003-13
- Factors incorporated
Segment Performance
-
- Key points
- Holiday spending accounts for around two thirds of all spending abroad
-
- Figure 16: Annual spending abroad by UK residents, by purpose of visit, 2003-07
- The Eurozone accounts for half of all spending…
-
- Figure 17: Annual spending abroad by UK residents, by region of visit, 2003-07
- … but has seen its share fall over the past five years
-
- Figure 18: Distribution of annual spending abroad by UK residents, by region of visit, 2003, 2006 and 2007
- Spending patterns vary depending on the region and purpose of visit
-
- Figure 19: Average length of stay, average spend per visit and per day, by region and purpose of visit, 2006
Market Share
-
- Key points
- The Post Office is the largest provider of foreign currency in the UK…
- … while American Express dominates the travellers cheques market
- Barclays holds the number one spot in the credit card market…
-
- Figure 20: The largest credit card issuers, by share of customers, 2004-07
- … while Lloyds TSB is the largest issuer of debit cards
-
- Figure 21: The largest debit card issuers, by share of (main) current account customers, 2003 and 2007
Companies and Products
-
- American Express
- Barclays
- CAXTONfx
- M&S Money
- Post Office Travel Services
- Thomas Cook
- Travelex
Brand Communication and Promotion
-
- Key points
- Foreign currency providers spend £3-5 million annually on advertising
-
- Figure 22: Top 15 advertisers of foreign currency services, 2005/06-2007/08
- The press typically accounts for the largest proportion of adspend
-
- Figure 23: Distribution of adspend on foreign currency services, by media type, 2005/06-2007/08
- Travelex sponsors events to raise its brand profile
Channels to Market
-
- Key points
- A branch network is key to selling currency
-
- Figure 24: Source used to buy foreign currency pre-departure, February 2008
- Ordering online
-
- Figure 25: Agreement with statements about buying travel money, February 2008
- Less than a third shop around for the best deal
- Travellers cheques mainly sold via retail distributors
-
- Figure 26: Source used to buy travellers cheques, 2006-2007
The Consumer – Holidays Abroad
-
- Key points
- About Mintel’s consumer survey
- A huge target market
-
- Figure 27: Holidays taken abroad in the past 12 months, by gender, February 2008
- The 55-64 age group represents a lucrative market
-
- Figure 28: Holidays taken abroad in the past 12 months, by age group, February 2008
- Those without dependents are more likely to venture overseas
-
- Figure 29: Holidays taken abroad in the past 12 months, by lifestage, February 2008
- ABs are a major target group for the independent sector
-
- Figure 30: Holidays taken abroad in the past 12 months, by socio-economic group, February 2008
- Holiday trends show regional variation
-
- Figure 31: Holidays taken abroad in the past 12 months, by region, February 2008
The Consumer – Travel Money Usage and Preference
-
- Key points
- People are showing greater preference for plastic
-
- Figure 32: Source(s) of travel money typically used when abroad, ranked in order of significance, February 2008
- Credit cards are most used by those aged 45-64 when abroad
-
- Figure 33: Source(s) of travel money typically used when abroad, by age group, February 2008
- ABs are a key target group for foreign currency and travel card providers
-
- Figure 34: Target groups identified for the travel money market, February 2008
- Most use just one or two sources of money when abroad
-
- Figure 35: Number of travel-money types used when abroad (repertoire analysis), February 2008
- Independent travellers make greater use of plastic…
-
- Figure 36: Source(s) of travel money typically used when abroad, by type and destination of holiday taken in past 12 months, February 2008
- …as do those travelling to destinations further afield
-
- Figure 37: Usage of plastic cards when abroad, February 2008
The Consumer – Attitudes and Behaviours
-
- Key points
- Most fail to shop around for the best deal
-
- Figure 38: Agreement with statements about arranging and using travel money, February 2008
- ‘Commission free’ wins over a competitive exchange rate
-
- Figure 39: Agreement with statements about arranging and using travel money, by source(s) typically used when abroad, February 2008
- One in four of those aged 45-54 prefers the security of credit cards
-
- Figure 40: Agreement with statements about arranging and using travel money, by age group, February 2008
- Travel-related credit cards appeal most to third agers…
-
- Figure 41: Agreement with statements about arranging and using travel money, by gender and lifestage, February 2008
- … and to ABC1s
-
- Figure 42: Agreement with statements about arranging and using travel money, by socio-economic group, February 2008
The Consumer – Future Travel Plans
-
- Key points
- More than half of all UK adults expect to travel abroad in the coming year
-
- Figure 43: Overseas trips overseas planned in the next 12 months, February 2008
- Plastic fantastic
-
- Figure 44: Overseas trips planned in the next 12 months, by source(s) of travel money typically used, February 2008
- A quarter of those aged 45-54 plan to venture outside Europe
-
- Figure 45: Overseas trips planned in the next 12 months, by age group, February 2008
- One in eight will visit family or friends overseas this year
-
- Figure 46: Overseas trips planned in the next 12 months, by gender and lifestage, February 2008
- ABC1s are most likely to travel abroad
-
- Figure 47: Overseas trips planned in the next 12 months, by socio-economic group, February 2008
- Scots and Southerners are keenest on escaping to foreign shores
-
- Figure 48: Overseas trips planned in the next 12 months, by region, February 2008
The Consumer – Prepaid Cards and Targeting Opportunities
-
- Key points
- Most people haven’t heard of prepaid cards
-
- Figure 49: Awareness of/interest in prepaid cards, February 2008
- Prepaid cards appeal most to users of travellers cheques
-
- Figure 50: Awareness of/interest in prepaid cards, by source(s) of travel money typically used, February 2008
- Prepaid cards could have a potential target customer base of 15 million
-
- Figure 51: Total sample segmented by prepaid card target groups, February 2008
-
- Figure 52: Awareness of/interest in prepaid cards, by prepaid card target groups, February 2008
- Prepaid card providers should target female, pre-/no family ABC1s
-
- Figure 53: Target groups identified for prepaid cards, February 2008
- Hot Prospects are heavy card users
-
- Figure 54: Source(s) of travel money typically used when abroad, prepaid card target groups, February 2008
- One in four Hot Prospects believes cards are safer than cash
-
- Figure 55: Agreement with statements about arranging and using travel money, by prepaid card target groups, February 2008
- Hot Prospects are most likely to travel abroad
-
- Figure 56: Overseas trips planned in the next 12 months, by prepaid card target groups, February 2008
- Further analysis
Appendix – Travel Money Usage by Demographic
-
-
- Figure 57: Sources of money used when abroad, by gender, age, socio-economic group, marital status, lifestage, region and tenure, February 2008
- Figure 58: Sources of money used when abroad, by working status, household income, ACORN category, new technology usage, newspaper readership, commercial TV viewing and supermarket usage, February 2008
-
Appendix – Prepaid Card Target Groups by Demographics
-
-
- Figure 59: Prepaid card target groups, by gender, age, socio-economic group, marital status, lifestage, region and tenure, February 2008
- Figure 60: Prepaid card target groups, by working status, household income, ACORN category, new technology usage, newspaper readership, commercial TV viewing and supermarket usage, February 2008
-
Back to top