Table of Contents
Overview
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- What you need to know
- Products covered in this Report
Executive Summary
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- The market
- Total expenditure abroad grows by 11% in 2016
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- Figure 1: Forecast for annual expenditure on overseas trips by UK residents, 2011-21
- Majority arrange some form of travel money in the UK
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- Figure 2: Method of arranging travel money in the last 12 months, November 2016
- Visits increased by 7.2% in 2016
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- Figure 3: Number of overseas visits by UK residents, by purpose, 2010-16
- Reduced rates will limit spending power abroad
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- Figure 4: Spot exchange rates, monthly average, US Dollar-Sterling and euro-Sterling, January 2010-January 2017
- Companies and brands
- Adspend reaches £5.7 million in 2016
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- Figure 5: Total above-the-line, online display and direct mail advertising expenditure on travel money (including prepaid cards), 2012-16
- FinTech drives prepaid cards innovation
- Post Office stands out from other travel money providers
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- Figure 6: Attitudes towards and usage of selected brands in the travel money sector, December 2016
- The consumer
- Foreign currency remains the most popular payment method abroad
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- Figure 7: Method of spending money on holiday abroad, November 2015 and November 2016
- Travel money gives people reassurance when spending abroad
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- Figure 8: Attitudes towards travel money, November 2016
- Budgeting tools can help people understand how much travel money they need
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- Figure 9: Attitudes towards budgeting travel money, November 2016
- Two out of five use their card for larger costs
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- Figure 10: Credit and debit card usage abroad, November 2016
- Rates and no fees are most important
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- Figure 11: Factors of importance when arranging travel money, November 2016
- Shopping habits set to change following fall in the value of the Pound
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- Figure 12: Impact of the recent decline in the value of the Pound on arranging travel money, November 2016
- What we think
Issues and Insights
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- Falling Pound will affect consumers’ travel money shopping habits
- The facts
- The implications
- Foreign currency continues to be preferred due to convenience and familiarity
- The facts
- The implications
- Prepaid cards and apps could be the key to holiday budgeting
- The facts
- The implications
The Market – What You Need to Know
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- Total expenditure abroad grows by 11% in 2016
- Growth to slow going forward
- Majority arrange some form of travel money in the UK
- Overseas visits increased by 7.2% in 2016
- Europe continues to attract the majority of travellers
Market Size and Forecast
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- Total expenditure abroad grows by 11%
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- Figure 13: Total annual expenditure on overseas trips by UK residents, 2010-16
- Visiting friends or relatives sees biggest increase in spend
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- Figure 14: Annual expenditure on overseas trips by UK residents, by purpose of visit, 2010-16
- Majority of overseas spend in Europe
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- Figure 15: Annual expenditure on overseas trips by UK residents, by region of visit, 2010-16
- International card payments continue to grow
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- Figure 16: Value of overseas spend on debit and credit cards, 2015
- Growth to slow going forward
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- Figure 17: Forecast for annual expenditure on overseas trips by UK residents, 2011-21
- Forecast methodology
Channels to Market
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- Majority arrange some form of travel money in the UK
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- Figure 18: Method of arranging travel money in the last 12 months, November 2016
- Preference for in-store purchase
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- Figure 19: Method of ordering/ collecting travel money in the last 12 months, November 2016
Market Drivers
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- Visits increased by 7.2% in 2016
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- Figure 20: Number of overseas visits by UK residents, by purpose, 2010-16
- Biggest increase in visits to Europe
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- Figure 21: Number of overseas visits by UK residents, by region visited, 2010-16
- Outlook looks positive for holiday bookings despite Brexit
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- Figure 22: Booked holidays in the last three months and intentions to book a holiday in the next three months, June 2012-January 2017
- Reduced rates will limit spending power abroad
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- Figure 23: Spot exchange rates, monthly average, US Dollar-Sterling and euro-Sterling, January 2010-January 2017
- Home or abroad?
Companies and Brands – What You Need to Know
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- Adspend reaches £5.7 million in 2016
- FinTech drives prepaid cards innovation
- Brand building through added-value services
- Post Office is a brand leader
Competitive Strategies
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- Travel money providers remain committed to high street presence
- eurochange
- No1 Currency
- Thomas Cook
- FinTech drives prepaid cards innovation
- Revolut continues to make waves
- Soldo travel card targeted at families
- Monzo gains traction among students
- Payment Cloud Technologies and FEXCO launch No1 Currency card
- Brand building through added-value services
- Post Office launches travel money game
- Travelex launches holiday planning tool
- FairFX
- Travel money ‘sales’
Advertising and Marketing Activity
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- Adspend reaches £5.7 million in 2016
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- Figure 24: Total above-the-line, online display and direct mail advertising expenditure on travel money (including prepaid cards), 2012-16
- Post Office accounts for 46% of all spend
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- Figure 25: Top 10 advertisers on above-the-line, online display and direct mail advertising expenditure on travel money (including prepaid cards), 2012-16
- Digital trumps TV spend
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- Figure 26: Total above-the-line, online display and direct mail advertising expenditure on travel money (including prepaid cards), by media type, 2012-16
- Nielsen Ad Intel coverage
Brand Research
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- What you need to know
- Brand map
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- Figure 27: Attitudes towards and usage of selected brands, December 2016
- Key brand metrics
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- Figure 28: Key metrics for selected brands, December 2016
- Brand attitudes: Currency specialists are considered to be worth paying more for
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- Figure 29: Attitudes, by brand, December 2016
- Brand personality: Bank brands are more likely to be viewed as boring
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- Figure 30: Brand personality – Macro image, December 2016
- Most brands viewed as competent and helpful
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- Figure 31: Brand personality – Micro image, December 2016
- Brand analysis
- Post Office stands out from other travel money providers
- Travel money specialists viewed as exactly that
- Supermarket and retail banks fail to engage
- Consumers confused over Virgin Money
- Holiday specialist Thomas Cook benefits from brand reputation
The Consumer – What You Need to Know
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- Foreign currency remains the most popular payment method abroad
- Travel money gives people reassurance when spending abroad
- Frequent credit card use for back-ups/emergencies
- Rates and no fees are most important
- Fall in the value of the Pound means more will shop around
Methods of Spending Abroad
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- Four in five use travel money abroad
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- Figure 32: Method of spending money on holiday abroad, 2015 and 2016
- Over-55s are more reliant on foreign currency
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- Figure 33: Method of spending money on holiday abroad, by age, November 2016
- Nearly half use only one method of spending
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- Figure 34: Number of different ways of spending money on holiday abroad, November 2016
Attitudes towards Travel Money
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- Comfort in taking travel money
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- Figure 35: Attitudes towards travel money, November 2016
- Frequent credit card use for back-ups/emergencies
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- Figure 36: Method of spending abroad, by agreement with the statement ‘I only use my credit card on holiday abroad as a back-up or for emergencies’, November 2016
- Half of holidaymakers use PCWs for their travel money
- Specialist foreign exchange providers benefit from comparison websites
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- Figure 37: Method of arranging travel money in the last 12 months, by agreement with the statement ‘I use a price comparison website to find the best deal on travel money’, November 2016
- Changing money at the destination
Holiday Budgeting Behaviour
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- Four in five save for their holiday money
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- Figure 38: Attitudes towards budgeting travel money, November 2016
- Budgeting tools can help people understand how much they need to take away
- Element of fun in getting the best deal
Credit and Debit Card Usage Abroad
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- Two out of five use their card for larger costs
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- Figure 39: Credit and debit card usage abroad, November 2016
- Credit cards offer protection for larger purchases
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- Figure 40: Credit and debit card usage abroad, by method of spending abroad, November 2016
- Higher-income households more likely to have dedicated overseas cards
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- Figure 41: Credit and debit card usage abroad, by household income, November 2016
Important Factors When Arranging Travel Money
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- Rates and no fees are most important
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- Figure 42: Factors of importance when arranging travel money, November 2016
- Convenience is key
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- Figure 43: Factors of importance when arranging travel money, by age, October 2016
- Over-45s much more focused on rates
- Pre-ordering can mean better rates
- People using currency specialists prioritise costs
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- Figure 44: Factors of importance when arranging travel money, by method of arranging travel money in the last 12 months, November 2016
Impact of Brexit on Arranging Travel Money
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- Majority plan to arrange travel money
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- Figure 45: Intentions to arrange travel money in the next 12 months, November 2016
- Four in five will compare providers
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- Figure 46: Impact of the recent decline in the value of the Pound on arranging travel money, November 2016
- Two in five concerned about future rate drops
- Card users find it difficult to understand impact of falling value of the Pound
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- Figure 47: Impact of the recent decline in the value of the Pound on arranging travel money, by method of spending abroad, November 2016
- Online shoppers more engaged
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- Figure 48: Impact of the recent decline in the value of the Pound on arranging travel money, by method of arranging/ collecting travel money, November 2016
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Forecast Methodology
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- Figure 49: Additional best- and worst-case forecast for annual expenditure on overseas trips by UK residents, 2016-21
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