Travel Money - UK - March 2018

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Total expenditure grew by 4% in 2017
Figure 1: Forecast for annual expenditure on overseas trips by UK residents, 2012-22
85% of people arrange travel money prior to travel
Figure 2: Arrangement of travel money for holidays abroad, November 2017
Annual increase in visits slows to 0.4%
Figure 3: Number of overseas visits by UK residents, by purpose, 2010-17
Sterling is still struggling against the euro
Figure 4: Spot exchange rates, monthly average, US Dollar-Sterling and euro-Sterling, January 2010-January 2018
Companies and brands
Adspend drops to £3.6 million in 2017
Figure 5: Total above-the-line, online display and direct mail advertising expenditure on travel money (including prepaid cards), 2013-17
Post Office is seen as the most trusted and differentiated brand
Figure 6: Attitudes towards and usage of selected brands, November 2017
The consumer
Three quarters of people used travel money abroad
Figure 7: Method of spending money on holiday abroad, 2015-17
Foreign currency is seen as the most convenient
Figure 8: Perceptions of travel money, November 2017
Getting the best exchange rate is key
Figure 9: Most important factors for travel money, November 2017
84% take more notice of exchange rates before travel
Figure 10: Exchange rate monitoring behaviour, November 2017
35% of people are interested in receiving notifications about exchange rate changes
Figure 11: Interest in travel money features, November 2017
Security is the biggest concern for consumers
Figure 12: Attitudes towards travel money, November 2017
What we think
ISSUES AND INSIGHTS
The Pound is struggling against the Dollar and euro
The facts
The implications
Convenience may be more influential than consumers let on
The facts
The implications
Security is an important consideration for people
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Total expenditure grew by 4% in 2017
85% of people arrange travel money prior to travel
Volume growth has slowed
MARKET SIZE AND FORECAST
Total expenditure grew by 4% in 2017
Figure 13: Total annual expenditure on overseas trips by UK residents, 2010-17
Expenditure on holidays rose by 4% in 2017
Expenditure abroad for business reasons decreased in 2017
Figure 14: Annual expenditure on overseas trips by UK residents, by purpose of visit, 2010-17
Europe accounts for the majority of overseas spending…
…while expenditure in North America fell by 4%
Figure 15: Annual expenditure on overseas trips by UK residents, by region of visit, 2010-17
Growth expected to be slow and steady
Figure 16: Forecast for annual expenditure on overseas trips by UK residents, 2012-22
Figure 17: Forecast for annual expenditure on overseas trips by UK residents, at current and constant prices, 2012-22
Forecast methodology
CHANNELS TO MARKET
85% of people arrange travel money prior to travel
Figure 18: Arrangement of travel money for holidays abroad, November 2017
Four fifths of consumers use one method to arrange travel money
Figure 19: Repertoire of methods of arranging travel money, November 2017
Two thirds collected travel money in-store
Figure 20: Collection of travel money, November 2017
Millennials are the most likely to use an ATM
Figure 21: Collection of travel money, by generation, November 2017
MARKET DRIVERS
Annual increase in visits slows to 0.4%
Figure 22: Number of overseas visits by UK residents, by purpose, 2010-17
Europe accounts for 80% of overseas visits
Figure 23: Number of overseas visits by UK residents, by region visited, 2010-17
Holiday bookings held up in 2017
Figure 24: Booked holidays in the last three months and intentions to book a holiday in the next three months, June 2013-November 2017
Sterling is still struggling against the euro…
…while the Dollar is its own worst enemy
Figure 25: Spot exchange rates, monthly average, US Dollar-Sterling and euro-Sterling, January 2010-January 2018
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Adspend drops to £3.6 million in 2017
Post Office is seen as the most trusted and differentiated brand
AI is revitalising travel money, while brands are split on ATM fees
COMPETITIVE STRATEGIES 
Strong demand for local collection of travel money
AI is revitalising travel money
Monzo introduces overseas ATM fees…
…while the Global ATM Alliance removes them
Monzo ends prepaid travel card
Prepaid multi-currency card/apps
Open Banking presents an opportunity
ADVERTISING AND MARKETING ACTIVITY
Adspend drops to £3.6 million in 2017
Figure 26: Total above-the-line, online display and direct mail advertising expenditure on travel money (including prepaid cards), 2013-17
Post Office accounted for 44% of adspend on travel money
Figure 27: Top 10 advertisers on above-the-line, online display and direct mail advertising expenditure on travel money (including prepaid cards), 2015-17
Adspend on digital accounts for 54%
Figure 28: Total above-the-line, online display and direct mail advertising expenditure on travel money (including prepaid cards), by media type, 2017
Nielsen Ad Intel coverage
BRAND RESEARCH
What you need to know
The Post Office is seen as the most trusted and differentiated brand
Brand map
Figure 29: Attitudes towards and usage of selected brands, November 2017
Key brand metrics
Figure 30: Key metrics for selected brands, November 2017
Brand attitudes: Tesco Bank rewards loyalty
Figure 31: Attitudes, by brand, November 2017
Brand personality: Thomas Cook is the most fun
Figure 32: Brand personality – macro image, November 2017
Post Office is the most reliable
Figure 33: Brand personality – micro image, November 2017
Brand analysis
Post Office is seen as the most reliable and helpful provider
Thomas Cook is seen as the most fun brand
Tesco Bank rewards loyalty
THE CONSUMER – WHAT YOU NEED TO KNOW
Three quarters of people used travel money abroad
Foreign currency is seen as the most convenient
Getting the best exchange rate is key
84% take more notice of exchange rates before travel
19% of people are interested in a mobile app that tracks spending
Security is the biggest concern for consumers
METHODS OF SPENDING ABROAD
Three quarters of people used travel money abroad
Figure 34: Method of spending money on holiday abroad, 2015-17
Under-45s are more likely to use prepaid cards
25-34s are most likely to use a debit card abroad
Figure 35: Method of spending money on holiday abroad, by age, November 2017
Half of consumers use one method of spending money abroad
Figure 36: Repertoire of ways of spending money abroad, November 2017
PERCEPTIONS OF TRAVEL MONEY
Foreign currency is seen as the most convenient way to spend money
A third of people consider prepaid cards convenient
Figure 37: Perceptions of travel money, November 2017
Under-45s are most likely to see prepaid travel/currency cards as innovative
Figure 38: Association with innovation for prepaid travel or currency cards, by age, November 2017
Figure 39: Correspondence analysis, November 2017
FACTORS AFFECTING CHOICE OF TRAVEL MONEY
Getting the best exchange rate is key
Convenience is important
Figure 40: Most important factors for travel money, November 2017
A well-known brand is more important to Millennials…
…while Generation X and Baby Boomers seek value for money
Figure 41: Most important factors for travel money, by generation, November 2017
MONITORING OF EXCHANGE RATES
84% take more notice of exchange rates before travel…
…while 47% regularly monitor rates
Figure 42: Exchange rate monitoring behaviour, November 2017
Millennials are much more likely to find exchange rates confusing
Figure 43: Exchange rate monitoring behaviour, by generation, November 2017
INTEREST IN FEATURES
19% of people are interested in a mobile app that tracks spending
Figure 44: Interest in travel money features, November 2017
35% are interested in notifications about exchange rate changes
Millennials are the key demographic for exchange rate notifications
Figure 45: Key demographic target group for exchange rate notifications – CHAID – Tree output, December 2017
ATTITUDES TOWARDS TRAVEL MONEY 
Security is the biggest concern for consumers
Figure 46: Attitudes towards travel money, November 2017
Older Millennials are more likely to worry about having all their money in cash
Figure 47: Attitudes towards the security of travel money in cash and debit/credit card, by generation, November 2017
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
Correspondence analysis methodology
Figure 48: Correspondence analysis for perceptions of travel money, November 2017
CHAID analysis methodology
Figure 49: Key demographic target group for exchange rate notifications – CHAID – Table output, November 2017
APPENDIX – MARKET SIZE AND FORECAST
Figure 50: Best- and worst-case forecast of annual expenditure on overseas trips by UK residents, at current and constant prices, 2017-22
Forecast methodology